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

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.