A Chief Magistrate Court in Zuba, FCT, 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 met all requirements.
Magistrates Abdullahi Illelah entered the judgment in the case filed by Ceco CC Investment against Atlas Micro Finance Bank Limited.
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The court ordered the bank to return the document belonging to Ceco CC Investment in its possession which was used to process the loan application and a further N200, 000 as special damages and N20,000 as a cost were awarded.
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 N3 million as damages and N500, 000 as cost of prosecuting the case.
The company approached the bank sometimes in Sept. 2016 to obtain a loan to enable it clear its goods which arrived from China.
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Part of the requirements for the loan was that the company must open an account with the Bank, provides collateral and guarantors. After the company met the entire requirements, the Bank couldn’t provide the loan after several promises.
However, the company through its Managing Director Mr Charles Orji disclosed that the Bank had returned the title document to the company in the course of the court proceedings.
Similarly, the Managing Director of the Bank told the court he did not know the Plaintiff (the Company).
He said that in one the Bank’s management meeting it realized that it had businesses around Suleja, Zuba and Dei-Dei which led to opening the Dei-Dei branch of the Bank.
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He said shortly after opening the branch in Dei-Dei, many people went to the Bank’s headquarters with claims that they had applied for loans and their accounts were not credited with the loan facility.
He added that after checks on their systems, such applications were not in the banks’ system and subsequently the branch was closed.
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The court in its judgment finds out 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.
