H.F.C BANK LTD vs CHARLES OBENG BAWUAH
2015
HIGH COURT
GHANA
CORAM
- HER LADYSHIP NOVISI AFUA ARYENE (MRS.) JUSTICE OF THE HIGH COURT
Areas of Law
- Banking and Finance Law
- Contract Law
2015
HIGH COURT
GHANA
CORAM
AI Generated Summary
The plaintiff, a bank, sought to recover Ghc23,272.88 from the defendant for honoring cheques despite insufficient funds in the defendant's account. The defendant contested the claim, denying any agreement to overdraw the account. The court examined the existence and enforceability of an overdraft agreement and whether the plaintiff acted justifiably in granting the facility. It was determined that there was no express or implied agreement and isolated instances of overdrawing do not establish a course of business. The plaintiff is entitled to recover the amount drawn, and further financial details were to be ascertained by the Director of Finance.
Plaintiff’s claim is for the recovery of the sum of Ghc23, 272. 88 plus interest thereon at the prevailing bank rate from 30th December 2011 to date of final payment.
The brief facts are that defendant, a businessman dealing in home appliances and trading under the name JTE Enterprises, was a customer at the Tema Branch of Plaintiff Bank.
The thrust of plaintiff’s plaint is that even though defendant did not have sufficient funds in his account, he drew several cheques on his account which plaintiff honoured.
Plaintiff further contended that other cheques issued by the defendant were returned unpaid because he failed to regularize the account and that the said cheques attracted the bank’s 10% penal charge.
Plaintiff averred that defendant has refused to settle his indebtedness despite repeated demands made on him and that as at 30th December 2011, his indebtedness stood at Ghc23, 272. 88. Defendant denied the claim and contended that he did not make any prior arrangement with plaintiff to overdraw his account.
He also denied that demand notice was served on him and put plaintiff to strict proof of her claim.
The main issue for determination by the court is whether or not plaintiff was entitled to her claim.
Plaintiff instituted the instant action per her lawful attorney Experts Consult ltd, a debt recovery company registered under the laws of Ghana.
The position of the law as stated in Paget’s Law of Banking 12th Edition, at page 176 is that the drawing of a cheque or the accepting of a bill payable at the bank, when the drawer knows that there are not sufficient funds in the account to meet it, may be taken as a request for an overdraft.
However a bank is obliged to let a customer overdraw only if he has agreed to do so or such agreement can be inferred from a course of business between the parties because borrowing and lending are a matter of contract, express or implied.
In view of defendant’s assertions that there was no agreement to overdraw the account, this court would address the issue whether or not there was an enforceable overdraft agreement either express or implied between the parties.
The court would also consider whether plaintiff was justified on the basis of a course of business between the parties, in granting the defendant the overdraft facility.
Eric Appiah, the Finance Manager of Expert Consult, plaintiff’s lawful attorney, tendered into evidence power of attorney dated 2nd November 2009 as exhibit A. His testimony is that