Bank Customers Know Your Right You Can Sue Your Bank When It Wrongfully Dishonours Your Cheque

By Olaniyi Timothy Olamide

1. ‘Customer is king’ is an old notorious business cliché which can hardly be faulted in any business including banking business.That is, business cannot survive without customers.
2. The legal relationship of Banker – customer has undergone several stages and which was not until Lord Atkin’s dictum in the case of Joachimson v Swiss Bank Corporation (1921) 3KB 110. When it was settled that the banker- customer relationship is that of debtor-creditor- relationship. Lord Atkin held lucidly that ‘the bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them…
3. The above English case was a leading authority in the banking industry at the time it was decided in England, especially in the area of banker – customer relationship and has formed the fulcrum upon which Common law jurisdictions based their decisions. Though not binding but persuasive in nature. See also the Nigerian case of G.T.B. v. Ekemezie [2016] 2 NWLR Pt 1497 pg 579 @583
4. Cheque as one of the negotiable instruments, is a bill of exchange drawn on a banker payable on demand… see section 73 of the Bill Of Exchange Act. In a loose language it means one of the mediums through which a banker’s customers demand their money. It can be presented to the bank by the customer itself or through its representative.
5. It is the fundamental duty of banker to honour its customer cheque properly drawn and presented before it during the banking hours. The court of Appeal, aptly held in the case of Nwozu v. Zenith Bank PLC (2015) 9 NWLR Pt 1464 pg 314 that ‘the most fundamental of the banker’s duty is to honour, without delay, its customer’s cheques to the extent of the balance standing to his credit or if the cheque is within the limits of an agreed overdraft and it is presented for payment in proper form during banking hours at the branch at which the current account is kept, provided there is no legal cause making such fund though sufficient not available for the purpose.
6. From the above case, the following conditions must be strictly fulfilled. a. cheque must be drawn and presented before the bank, b the account to which cheque is drawn must be sufficient or within the limit of an agreed overdraft, c. presented during banking hours, d. the signature on the cheque must tally with the signature on record.
7. Absence of any justification by banker for dishonouring its customer’s cheque makes it liable in damages to the customer. Failure to honour customer’s cheque amounts to breach of contract by the Banker. See the following cases of Nwosu v. Zenith Bank plc supra, Zenith Bank plc v. Igbokwe(2018) LPELR-44777 CA.
8. It can be swiftly concluded that dishonouring customer’s cheque wrongfully by most of the time leads to the customer’s annoyance. It tends to lower the integrity and reputation of the customer. Damages payable if found liable vary and depend on the nature of the customer. In fact a customer who is a trader needs not prove actual damage and damages payable does not depend on the actual amounts endorsed on the cheque.see Zenith Bank v. Igbokwe supra.

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Olaniyi Timothy Olamide, Faculty of Law ABU, Zaria. Olaniyitimothyolamide@gmail.com, 08144856315