A Chief Magistrates’ Court in Zuba, Federal Capital Territory, on Tuesday ordered a microfinance bank to pay N500,000 as “exemplary damages” over its failure to grant a loan facility to Ceco CC Investment after it had met all requirements.
Magistrate Abdullahi Illelah entered the judgment in the case filed by Ceco CC Investment against Atlas Microfinance Bank Limited.
The court ordered the bank to return the documents belonging to Ceco in its possession, which were used to process the loan application.
It also ordered the bank to pay a further N200,000 as special damages, while another N20,000 as a cost was also awarded.
The News Agency of Nigeria recalls that Ceco CC Investment approached the court seeking recovery of title document used as collateral for obtaining a loan from the bank.
The company also claimed N3m as damages and N500,000 as cost of prosecuting the case.
The company had approached the bank sometime in September 2016 to obtain a loan to enable it clear its goods which had arrived from China.
Part of the requirements for the loan was that the company must open an account with the bank, provide collateral and guarantors.
After the company had met all the requirements, the bank couldn’t provide the loan despite several promises.
However, the company, through its Managing Director, Mr. Charles Orji, said the bank had returned the title document to the company in the course of the court proceedings.
Orji also told the court that he did not know the Plaintiff (Ceco CC Investment).
He said that in one the bank’s management meeting, it realized that Ceco CC Investment had businesses around Suleja, Zuba and Dei-Dei, which led to the opening of the Dei-Dei branch of the bank.
He said shortly after opening of the branch in Dei-Dei, many people went to the bank’s headquarters with claims that they had applied for loans and that their accounts were not credited with the loan facility.
He added that after checks on their systems, such applications were not seen in the bank’s system and subsequently, the branch was closed.
The court in its judgment noted that there was no contention to the fact that the bank was in possession of the title document and other documents presented to process the loan application.
It also held that the refusal or negligence of the bank to return the document to the company was wrong.