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From Jude Chinedu, Enugu
The High Court of Enugu State has ordered Guaranty Trust Holding Company (GTCO), formerly Guaranty Trust Bank Plc, to pay N50 million in damages to a businessman, Samson Adindu, after finding the bank liable for what it described as unethical and questionable banking practices.
In a strongly worded judgment delivered by Justice C. O. Ajah, the court held that the bank created unauthorised loan facilities and accounts in the plaintiff’s name without his consent or knowledge.
The case, filed under Suit No: E/205/2023, was instituted by Adindu, who trades as S. C. Adindu & Sons, after the bank allegedly denied him access to funds in his account and failed to provide statements of account covering certain periods between 2008 and 2023.
According to the plaintiff, although he had an overdraft agreement of N85 million with the bank, it refused to honour a cheque issued for that amount and subsequently seized the instrument.
During the trial, the bank failed to produce the cheque despite being formally notified to do so. Justice Ajah noted that under the provisions of the Evidence Act, the failure to produce such evidence created a presumption that it would have been unfavourable to the party withholding it.
The court also observed that the plaintiff had clearly set out allegations of fraud against the bank, which the defendant failed to counter through an amended statement of defence, leaving much of the testimony unchallenged.
Justice Ajah criticised the bank’s handling of the plaintiff’s accounts, describing the loan facilities allegedly granted to him as questionable constructs.
He referred to them as “fraudulent edifices” and “sham accounts” allegedly used by the bank to manipulate transactions within the plaintiff’s account.
The court said it was difficult to understand how a loan said to be worth N150 million could later drop to an outstanding balance of just N1.5 million when there was no evidence that the plaintiff had repaid any portion of the principal.
Evidence presented before the court also showed that additional loan facilities, including sums of N40.5 million and N2.49 million, were created in the plaintiff’s name without authorisation.
According to the court, those facilities appeared to have been used internally by the bank to offset earlier irregularities connected to the account.
Justice Ajah said the system revealed during the trial created a “monument of rancid stench” that was “suffocating to the nostril of modern banking,” stressing that the bank had failed in its duty to exercise reasonable care in managing a customer’s account.
The bank had filed a counterclaim alleging that the plaintiff was indebted to it. However, the court dismissed the claim, describing it as a “sham” and a “deceptive edifice” intended to evade responsibility.
The judge held that merely presenting statements of account was not enough to establish indebtedness, particularly as the bank failed to call any official who could explain how the alleged debit balance was calculated.
Consequently, the court ordered GTCO to provide the plaintiff with statements of account covering the periods between 2008 and 2011, as well as late 2022 to early 2023.
The bank was also directed to grant the plaintiff full access to funds in his account, amounting to no less than N50 million, which had been restricted as a result of the disputed transactions.
In awarding damages of N50 million, Justice Ajah said the compensation was meant to address the “hardship, economic and financial embarrassment” the plaintiff suffered as a result of the bank’s actions.
The court emphasised that the relationship between a bank and its customer is built on trust and that the conduct of the defendant fell far below the standard expected of a financial institution.
Counsel to the plaintiff, Dr. E. E. J. Okereke and Victor A. Iheme, had urged the court to impose significant costs as a deterrent to similar conduct by financial institutions.
