Without Court Order, EFCC Lacks Power to Instruct Bank to Freeze Customer’s Account

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President, Court of Appeal, Justice Zainab Bulkachuwa
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Without Court Order, EFCC Lacks Power to Instruct Bank to Freeze Customer’s Account

President, Court of Appeal, Justice Zainab Bulkachuwa

Court: Court of Appeal, Lagos Division

Appeal Number: CA/L/1285/15

Judgement date: March 1, 2019

Judgment delivered by: Justice Tijani Abubabakar

Supporter by: Justice Abimbola O. Obaseki-Adejumo and Justice Jamilu Yammama Tukur

Appellant – Guaranty Trust Bank

1st respondent – Mr Akinsiku Adedamola

2nd respondent – Economic and Financial Crimes Commission

3rd respondent – Baba Muhammed Azari

Background

This appeal is against the judgment of the Federal High Court in Lagos delivered by Abang J, on the 13th day of November 2015 in Suit No. FHC/L/CS/862/2015, wherein the learned trial judge gave judgment in favour of the 1st respondent against the appellant, the 2nd and 3rd respondents.

The 1st respondent in this appeal commenced an action against the appellant, 2nd and 3rd respondents by way of an application for the enforcement of his fundamental rights. The reliefs sought by the applicant at the court below read as follows:

  1. An order of court restraining the 1st respondent and 2nd respondent from intimidating, threatening and arresting the applicant under the guise of investigating an offence committed by one Akinshiku Roy.
  2. A declaration that the constant barrage of telephone calls from the 3rd respondent threatening to arrest the applicant is unlawful and breach the applicant’s fundamental rights as guaranteed and protected by Section 44 of the 1999 Constitution of the Federal Republic of Nigeria.
  3. An order of court directing the respondent to release the restriction placed on the applicant’s bank account numbers 0014455802 and 0014455819, account name: Akinshiku Ademola, with Guaranty Trust Bank Plc.
  4. N100,000,000 (one hundred million naira) as compensation for the illegal and unlawful freezing of account of the applicant.
  5. An order of perpetual injunction restraining the respondents, whether by themselves, their agents, privies/or servants from harassing, arresting and threatening the applicant in any manner whatsoever in connection with a crime allegedly committed by one Akinshiku Roy.

Parties filed all relevant processes at the court below and upon hearing the application by the 1st respondent in this appeal, the lower court found in favour of the applicant and awarded damages for the breach of the applicant’s fundamental rights in the sum of N4,000,000 (four million naira) for freezing the applicant’s bank accounts and N20,000 (twenty thousand naira) cost.

The judgment did not go down well with the appellant, who now filed several notices of appeal but eventually withdrew some and settled for an amended notice of appeal filed on the 22nd day of March 2016, containing nine grounds of appeal.

Resolution

The issue that is central to the determination of this appeal is narrow; it is just whether the appellant, as a banker, committed a breach of the fundamental right of the 1st respondent by freezing his bank account.

Before I proceed to deal with the narrow issue central to the determination of this appeal, I need to clear a point on the challenge to the jurisdiction of the lower court to hear and determine the 1st respondent’s application for the enforcement of fundamental right. The issue of jurisdiction of our courts to hear and determine applications for the enforcement of fundamental rights came under focus in FRANCIS IGWE vs. GODOY EZEANOCHIE & ORS (2009) LPELR-11885 (CA) Pg. 26-29, Paras. G-A, where this court pronounced on the application of the Fundamental Rights (Enforcement Procedure) Rules and the jurisdiction of the courts. This court held that:

“Whenever the court is confronted with an application brought under the Fundamental Rights (Enforcement Procedure) Rules, it is imperative that the court should critically examine the reliefs sought by the applicant, the grounds for seeking the reliefs and the facts contained in the statement accompanying the application and relied on for the reliefs sought.

“Where the facts relied on disclose infringement of the fundamental right of the applicant as the main basis of the claim, then it is a clear case for the enforcement of such rights through the Fundamental Rights (Enforcement) Rules…

“However, where the main or principal claim is not the enforcement or securing the enforcement of a fundamental right, the jurisdiction of the court cannot be properly invoked or exercised as the court will be incompetent to do so…”

See: also ADEKUNLE vs. A.G., OGUN STATE (2014) LPELR-22569 (CA) Pg.42-43, Paras. E-G; JIMOH vs. JIMOH (2018) LPELR-43793 (CA) Pg. 21-24. Paras. C-F and PRINCESS vs. GOVERNOR OF OGUN STATE & ORS (2018) LPELR-44986 (CA) Pg. 49-57, Paras. D-D, where this court reiterated the settled position of the law that: “…for an application for the enforcement of any of the fundamental rights entrenched in Chapter IV of the 1999 Constitution of the Federal Republic of Nigeria (as amended) to be grounded, it must be shown by the applicant that the breach of the fundamental right is the main claim…”

The reliefs sought by the applicant/1st respondent in this appeal are set out at pages 3-4 of the records of appeal. They are again reproduced as follows:

  1. An order of court restraining the 1st respondent and 2nd respondent from intimidating, threatening and arresting the applicant under the guise of investigating an offence committed by one Akinshiku Roy.
  2. A declaration that the constant barrage of telephone calls from the 3rd respondent threatening to arrest the applicant is unlawful and breach the applicant’s fundamental rights as guaranteed and protected by Section 44 of the 1999 Constitution of the Federal Republic of Nigeria.
  3. An order of court directing the respondent to release the restriction placed on the applicant’s bank account numbers 0014455802 and 0014455819, account name: Akinshiku Ademola, with Guaranty Trust Bank Plc.
  4. N100,000,000 (one hundred million naira) as compensation for the illegal and unlawful freezing of account of the applicant.
  5. An order of perpetual injunction restraining the respondents, whether by themselves, their agents, privies/or servents from harassing, arresting and threatening the applicant in any manner whatsoever in connection with a crime allegedly committed by one Akinshiku Roy.

The affidavit in support and the statement are found at pages 5-12 of the records. In summary, the applicant said the sum of N300,000 was paid into his account by Akinshiku Roy; the Economic and Financial Crimes Commission trailed some lodgement to the account and therefore placed restrictions on the account. The account of the 1st respondent, having been restricted for the purpose of investigation, the 1st respondent then applied for the enforcement of his fundamental rights to secure the release of his account and restrain the Economic and Financial Crimes Commission from arresting and threatening him. The applicant asked for damages for the restraint.

I am very sure this is not a matter bordering on banker/customer relationship; the submission by the appellant that the lower court lacks jurisdiction to hear and determine that application is a gross misconception of the law; it is therefore discountenanced. I hold that the lower court acted rightly in the exercise of its jurisdiction to hear and determine the application.

Let me go back to the narrow issue to resolve in this appeal. The compressed facts constituting the basis for placing restriction on the account of the 1st respondent by the applicant show that following an instruction from the Economic and Financial Crimes Commission, the account of the 1st respondent was placed under restrictions. In fact, the 1st respondent said so expressly in his affidavit and the statement in support of his application for enforcement of fundamental rights. At paragraph 20 of the affidavit, the applicant/1st respondent said as follows: “That the order freezing my bank account was done as a result of a crime allegedly committed by another person, which I am not privy to.”

Again at page 46 of the record of appeal, the applicant said he was informed by his bank that his account was placed under restriction by the Economic and Financial Crimes Commission –  paragraphs 7-14 of the affidavit in support. The 1st respondent stated that the appellant bank acted on instructions by the Economic and Financial Crimes Commission to freeze his account because there were allegations of laundering proceeds of crimes surrounding the operations of his account.

Where there is an allegation of commission of a crime against a customer of a bank in relation to the funds in his account, the commission is empowered by law to set in motion the process of investigating any such funds perceived to be derived from proceeds of crime. In conducting the investigation, the commission is required to observe due process and satisfy the requirements of the law. The commission or its officers must, first, go to court and obtain an ex parte order before freezing the account. Any failure to follow due process will render the action taken by the commission a violation of the rights of the customer.

The lower court found that the action of the appellant, 2nd and 3rd respondents violated the fundamental rights of the 1st respondent. In so finding, the learned trial judge, at page 51 of the records of appeal, said as follows:

“…in this case, there is no evidence that the applicant committed any criminal offence, or was even reasonably suspected to have committed any offence. The EFCC has not come up with anything suggestive that Akinshiku Roy mentioned the applicant as having conspired to commit the alleged offence he was accused of.

“Even if the applicant was alleged to have committed a criminal offence, the EFCC cannot, on its own, direct the bank to place a restriction on his accounts in the bank without an order of court. The law allows the EFCC to come to court even with an ex parte application to obtain an order freezing the account of any suspect that has lodgements suspected to be proceeds of crime. No law imposes a unilateral power on the EFCC to deal with the applicant this way.

“Again, Guaranty Trust Bank has no obligation to act on EFCC’s instructions or directives without an order of court…”

The above is the reasoning of the learned trial judge. I decided to check the provisions of the law relating to the powers of the Economic and Financial Crimes Commission to issue instructions to banks to freeze bank accounts of customers; I read the provisions of Section 34(1) of the Economic and Financial Crimes Commission (Establishment) Act 2004. The section provides as follows:

Notwithstanding anything contained in any other enactment or law, the chairman of the commission or any officer authorised by him may, if satisfied that the money in the account of a person is made through the commission of an offence under this Act or any enactments specified under Section 6(2)(a)-(f) of this Act, apply to the court ex parte for power to issue or instruct a bank examiner or such other appropriate regulatory authority to issue an order as specified in Form B of the Schedule to this Act, addressed to the manager of the bank or any person in control of the financial institution where the account is believed by him to be or the head office of the bank or other financial institution to freeze the account. (Underlining mine).

The above provisions are in accord with the decision of the lower court. Before freezing customers accounts or placing any form of restrain on any bank account, the bank must be satisfied that there is an order of court. By the provisions of Section 34(1) of the Economic and Financial Crimes Commission Act 2004, the Economic and Financial Crimes Commission has no power to give direct instructions to banks to freeze the account of a customer without an order of court. So doing constitutes a flagrant disregard and violation of the rights of a customer.

I must add that the judiciary has the onerous duty of preserving and protecting the rule of law. The principles of the rule of law are that both the governor and the governed are subject to the rule of law; no one is above the law. Whenever there is a brazen violation of the rights of a citizen, the courts, in the discharge of their responsibility to the society, must rise to the occasion, speak, frown upon and condemn arrogant display of powers by an arm of government. It is in the interest of both government and citizens that laws are respected, as respect for the rule of law promotes order, peace and decency in all societies, and we are not an exception.

Our financial institutions must not be complacent, reticent or toothless in the face of brazen and reckless violence to the rights of their customers. Whenever there is a specific provision regulating the procedure of doing a particular act, that procedure must be followed.

I resolve this issue in favour of the 1st respondent. Having said this much, I think I must go back to the appeal. The appellant’s appeal is obviously bereft of a scintilla of merit and therefore deserves to be dismissed. I affirm the judgment of the lower court delivered by Abang J, on the 13th day of November 2015 in Suit No. FHC/L/CS/862/2015.

Cost of N500,000 is awarded to the 1st respondent against the appellant.


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