FIRST ATLANTIC BANK LIMITED v. LOGWOOD INDUSTRIES LIMITED & ANOR
2016
HIGH COURT
GHANA
CORAM
- ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
Areas of Law
- Banking and Finance Law
- Contract Law
- Corporate Law
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
First Atlantic Bank Limited sued Logwood Industries Ltd and its Managing Director to recover a loan of GH¢313,096.83, claiming default on an overdraft facility. The Defendants admitted the loan but claimed it was settled and statute-barred, counterclaiming for a fixed deposit. The court held that the acknowledgment of the debt reset the limitation period, rejected the argument that the debt was statute-barred, and ruled that the Plaintiff was entitled to recover the loan amount from Logwood Industries Ltd. The court also ruled that the 2nd Defendant was not personally liable for the debt and dismissed his counterclaim.
JUDGMENT
First Atlantic Bank Limited, formerly known as First Atlantic Merchant Bank Limited, instituted the instant action against Logwood Industries Ltd and K.N. Poku, its Managing Director, claiming an amount of three hundred and thirteen thousand, ninety-six Ghana Cedis and eighty -three pesewas ( GH¢ 313, 096.83). Per the endorsement on its amended writ of summons and statement of claim filed on 18/11/2014, the Plaintiff sought to recover this amount plus interest at the bank's prevailing lending rate from 2nd February, 2013 to the date of full and final payment. It is the Plaintiff's case that it granted an overdraft facility in the sum of Seventy thousand Ghana Cedis (GH¢70,000.00) ,previously seven hundred million Cedis (¢700,000,000.00), to the 1st Defendant by a facility letter dated 31st May, 2005. The 1st Defendant run into excesses which the Plaintiff agreed to operate as additional facilities on the same terms as the principal facility. The facility was to be repaid in May, 2006 and was secured by a Negotiable Certificate of Deposit of GH¢ 50,000.00 standing in the name of the 2nd Defendant as well as fixed charge over a caterpillar 528 Skidder worth GH¢ 80,000.00. The 1st Defendant defaulted in repayment and after a demand notice had been served on the Company, it agreed to settle its indebtedness in monthly installment payments but again defaulted after making three payments. The accumulated interests have swelled up the Defendants indebtedness as claimed.
The Defendants case is encapsulated in a 11-paragraphed amended statement of defence filed on 09/12/12 wherein they admitted that the 1st Defendant took an overdraft facility of GH¢70,000.00 as claimed by the Plaintiff and which the 2nd Defendant Secured with a 90 day fixed deposit investment of GH¢50,000.00. The Defendants' alleged that there were negotiations with the 1st Defendant to settle the matter, but the Plaintiff rejected the same. Nevertheless, the 1st Defendant cleared the outstanding sum by sending cheques to the Plaintiff for payment. The Defendants further denied the additional facilities said to have been taken by the 1st Defendant and alleged that the 90 day fixed deposit which attracted interest of 28% is still with the Plaintiff. Since the Debt arose over six years ago, the Defendants averred that the same is statute barred.
Therefore, the 2nd Defendant counterclaimed against the Plaintiff for the sum of GH¢693,300.91 and interest thereon at the Bank's prevailing len