IFYSCO FURNITURE CO. & ANOR v. AMCON (2022)

IFYSCO FURNITURE CO. & ANOR v. AMCON

(2022)LCN/16840(CA)

In The Court Of Appeal

(KADUNA JUDICIAL DIVISION)

On Monday, November 21, 2022

CA/K/185/2021

Before Our Lordships:

Amina Audi Wambai Justice of the Court of Appeal

Abubakar Mahmud Talba Justice of the Court of Appeal

Mohammed Baba Idris Justice of the Court of Appeal

Between

1. IFYSCO FURNITURE COMPANY 2. IFEANYI OKAFOR APPELANT(S)

And

ASSET MANAGEMENT CORPORATION OF NIGERIA RESPONDENT(S)

RATIO

THE POSITION OF LAW ON THE TWO TYPES OF MOTION

In other words, it was a declaration of the rights vested in the Corporation that the Respondent was seeking for.
In the case of LEEDO PRESIDENTIAL MOTEL LTD VS. BANK OF THE NORTH LTD & ANOR (1998) LPELR – 1775 (SC) with regard to the circumstances under which an ex-parte motion should be brought, the Supreme Court held:
“Motions generally are of two types; Motion on Notice and Ex-parte Motion. A motion is on notice where the applicant has put on notice or awareness the attention of the other party or parties involved of the existence of the motion an ex-parte motion is one in which the applicant for some cogent reasons, cannot put the other party or parties on notice or awareness of its existence. Both are acceptable in law. The general practice, however is that motions are filed in Court on notice. Ex-parte motions are filed but sparingly considered by the Court in extreme or special circumstances. The decision whether an application should be brought ex-parte or on notice is one to be considered in the light of the prevailing circumstances and not to be based on the dictates of the applicant’s or the judge’s whims. An application ex-parte could be made in two circumstances; (i) When from the nature of the application, the interest of the adverse party will not be affected. (ii) When time is the essence of the application and in these two situations a Court will be right in exercising its discretion in granting a motion ex-parte.” PER IDRIS, J.C.A.

THE POSITION OF LAW ON LOCUS STANDI

In the case of TILLEY GYADO & CO. (NIG) LTD VS. ACCESS BANK & ORS (2019) LPELR – 47081 (CA), the Court, in giving the meaning of locus standi and what a party must show to establish locus standi, held that:
“Now, locus standi in general parlance means a recognized position or standing. In law, it means a place of standing in Court or right to appear in Court. Locus standi or standing to sue is defined as the legal right of a party to an action to be heard in litigation before a Court of law or Tribunal. The term entails the legal capacity of instituting, initiating or commencing an action in a competent Court of law or Tribunal without any inhibition, obstruction or hindrance from any person or body whatsoever. In other words, locus standi is the right of appearance in a Court of justice or before a legislative body on a given question Dada Vs Ogunsanya (1992) 3 NWLR (Pt 232) 754, United Bank of Africa Plc Vs BTL Industries Ltd (2004) 18 NWLR (Pt 904) 180… The Courts have stated that a party seeking to establish locus standi must show (a) a legal or justifiable right; (b) sufficient or special interest adversely affected; and (c) a justifiable cause of action Attorney General, Kaduna State Vs Hassan (1985) 2 NWLR (Pt 8) 483, Taiwo Vs Adegboro (2011) 11 NWLR (Pt 1259) 562, Adekunle Vs Adelugba (2011) 16 NWLR (Pt 1272) 154, Charles Vs Governor of Ondo State (2013) 2 NWLR (Pt 1338) 294. In other words, for a person to have locus standi, he must show that his civil rights and obligations have been or are in danger of being infringed and that he has sufficient legal interest in seeking redress in a Court of law. In other words, there must be a nexus between the party and the disclosed cause of action concerning his rights or obligations.” PER IDRIS, J.C.A.

WHETHER OR NOT A LOAN PURCHASE AGREEMENT MUST BE IN EVIDENCE TO SHOW THERE WAS AN ACTUAL ACQUISITION OF THE LOAN

On the issue of whether a loan purchase agreement must be in evidence to show that there was an actual acquisition of the loan by AMCON was brought up in the case of ABLEEM PETROLEUM CO. (NIG) LTD VS. AMCON (SUPRA). In the ABLEEM PETROLEUM case, learned counsel submitted that the failure of the claimant to adduce or tender in evidence, the purchase agreement it entered into with Keystone Bank in respect of the Eligible Bank Asset over the Defendants’ indebtedness, was fatal to the very institution of the suit as the claimant lacks the locus standi to invoke the judicial power having failed to show sufficient interest in the suit. Counsel has also referred to the case of UNITED BANK FOR AFRICA PLC VS. BTL INDUSTRIES LIMITED (2004) 18 NWLR (PT. 904) and has further argued that locus standi being a jurisdictional issue, can be raised for the first time on appeal. Reliance was placed on the case of MADUKOLU VS. NKEMDILIM (1962). PER IDRIS, J.C.A.

MOHAMMED BABA IDRIS, J.C.A. (Delivering the Leading Judgment): The Appellant herein, appealed against the decision of the Federal High Court of Nigeria, Kaduna Division delivered by Honourable Justice P. H. Mallong on the 14th day January, 2021.

The facts of the case leading to this appeal as adduced from the pleadings before the Court below are to the effect that the Respondent brought an Originating Motion Ex-parte dated the 26th day of November, 2020 praying for the following reliefs:
“1. AN ORDER of this Honourable Court entering judgment affirming, pursuant to Section 34(1)(A) of the Asset Management Corporation Act, 2010 (As Amended), that the Applicant has become vested with and acquired legal title to the Eligible Bank Asset and all assets by which the Eligible Bank Asset is secured.
2. AN ORDER of this Honourable Court entering judgment affirming, pursuant to Section 34(1)(A) of the Asset Management Corporation Act, 2010 (As Amended), that the Applicant has become vested with power (to the exclusion of all other creditors) to take possession of, manage foreclose or sell, transfer, assign or otherwise dispose of the schedule hereto.
3. AN ORDER of this Honorable Court directing that a certificate of judgment be issued to the Applicant pursuant to Section 45 (2) of the Asset Management Corporation of Nigeria Act, 2010 (As Amended);
4. AND SUCH FURTHER NOTICE ORDERS as the Court may deem fit to make in the circumstantial of this application.
TAKE FURTHER NOTICE THAT the grounds upon which this application is brought are as follows:
1. The Applicant acquired the following Eligible Bank Asset (EBA) from an Eligible Financial Institution (ECO BANK)
a. 71/72 Kuyanbana Crescent off Mayar Road, Narayi High Cost Kaduna South Kaduna State Nigeria.
b. A1 and 3, Kuyanbana Road Barnawa Phase II, Kaduna.
2. Pursuant to the acquisition of the EBA, Section 34(1)(A) of the Asset Management Corporation Act, 2010 (As Amended), vests the Applicant with the legal title to the EBA and all assets or property, tangible or intangible by which the EBA is secured.
3. The Applicant acquires an instrument evidencing the vesting of legal title to the assets in it, to enable the Applicant to exercise its proprietary rights in such assets.
4. It is in the interest of justice that this application to granted to enable the Applicant achieve its statutory mandate under the AMCON Act.”

The Respondent in the lower Court, in their originating processes alleged that the 2nd Appellant personally guaranteed and indemnified all the credit facilities granted to him by Ecobank. That the loans were an inventory finance facility of N10,000,000 (Ten Million Naira only) which was accepted by the Appellant by her board resolution dated the 11th day of February, 2008 and an overdraft of N20,000,000 (Twenty Million Naira). It was alleged that the total indebtedness of the Appellants stand at N69,188,893 (Sixty-Nine Million, One Hundred and Eighty-Eight Thousand, Eight Hundred and Ninety-Three Naira only) and that the Appellant refused to honour the demand notices sent to him. The Respondent attached Exhibits A – L to its affidavit in support.

After hearing the application, the learned trial judge granted the reliefs sought therein. Dissatisfied with the decision of the Court below, the Appellant filed an Amended Notice of Appeal dated the 31st day of March, 2021 raising 3 (three) grounds of appeal.
The parties filed their respective briefs of argument and adopted same.

In the Appellants’ brief of argument dated the 31st day of August, 2021 and settled by their counsel S. A. Oshodi Esq., the following 3 (three) issues for determination were distilled from the grounds of appeal:
1. Whether the learned trial judge was right when he entered summary judgment granting all the reliefs claimed against the Appellants when it was obvious that the originating Court process which was a motion ex-parte which adversely affected the Appellants was never served on the Appellants thereby denying the Appellants a fair hearing contrary to Section 36(1) of the 1999 Constitution of the Federal Republic of Nigeria (As amended).
2. Whether the learned trial judge was not in error when he entered judgment in favour of the Respondent in this suit when the said Respondent failed to establish its locus standi in this action.
3. Whether the learned trial judge was not in error when he entered judgment in favour of the Respondent, against the Appellants when the provisions of Section 49 of the Asset Management Corporation of Nigeria (AMCON) Act 2010 as amended, were not complied with.

Under issue one, learned counsel for the Appellants after outlining the method the Respondent filed all the originating processes in the lower Court and the date the Ex-parte Motion was moved and granted by the trial judge, submitted that reading of the Affidavit in support of the Motion Ex-parte shows that there are matters that affect the rights of the Appellants and his response, either negative or positive ought to have been required by the Court. Counsel then argued that in a matter of this nature where there is a claim against the Appellants which adversely affects their rights and obligation they ought to be put on notice as there is a feature in the case which prevents the Court from exercising its jurisdiction. The cases of GABRIEL MADUKOLU & ORS VS. JOHNSON NKEMDILIM (1962) ALL NLR (PT. 2) P. 581 AT 589 – 590 and N. B. N. LTD VS. GUTHRIE (NIG) LTD (1993) NWLR (PT. 284) 643 AT 659 were cited in support.

It was then submitted that the right to fair hearing is a fundamental and constitutional right guaranteed by the 1999 Constitution of the Federal Republic of Nigeria. The case of AIYEDUN VS. REGISTRAR, UPPER AREA COURT ILORIN (2018) ALL FWLR (PT. 970) 964 AT 986 – 987 was relied on. Additionally, Counsel also relied on the case of ALHAJI ABDULLAHI BABA VS. NIGERIAN CIVIL AVIATION & ANOR (1991) 5 NWLR (PT. 192) 388 to submit that the factors of fair trial was never complied with by the Respondent in this appeal. Finally, Counsel then argued that a breach of the right to fair hearing particularly in trials, vitiates such proceedings rendering same null and void.

On issue two, it was submitted that when it is alleged that a Claimant such as the Respondent has no locus standi, the onus is on the Claimant to show his locus standi as the Claimant’s process alone is the first port of call in the consideration of whether or not he has disclosed his locus standi. The case of DANIYAN VS. IYAGIN (2002) FWLR (PT. 120) 1805 AT 1875 PARA was relied on.

Counsel then submitted that it is necessary and essential to examine both the motion, supporting Affidavit and the documents attached to see if they disclose that the Respondent’s interest is sufficient enough to clothe it with the exquisite locus standi to sue. It was then argued that the Respondent did not state the mode and way they acquired interest in the landed properties from Ecobank Nigeria Plc. Furthermore, it was submitted that there was no Loan Purchase and Limited Servicing Agreement or any other agreement between the Respondent and Ecobank Nigeria Plc that was mentioned or exhibited in the affidavit supporting the Motion Ex-parte dated the 26th day of November, 2020 in connection with this suit. Counsel then urged the Court to hold that the Respondent lacked the locus standi to initiate and institute the suit that gave birth to this appeal.

On issue three which relates to the non-compliance by the Respondent with the provisions of Section 49 of the Asset Management Corporation of Nigeria (AMCON) Act, 2010 in relation to the way and manner the suit leading to this appeal was filed, prosecuted and judgment delivered, counsel cited Section 49 of the Asset Management Corporation of Nigeria (AMCON) Act, 2010 and submitted that the section of the Act is clear and unambiguous which means it must be given its clear and ordinary meaning. The cases of OJUKWU VS. OBASANJO (2004) ALL FWLR (PT. 222) 1666 AT 1702 PARA B and OSUNDE VS. ECO BANK NIG. PLC (2019) ALL FWLR (981) 742 AT PARAS D – E were cited in support.

It was then submitted that the said section of the Act has prescribed some procedural steps to be taken by the corporation where it has reasonable cause to belief that a debtor is the bona fide owner of any movable or immovable property and that the two steps are:
a) Apply by Motion Ex-parte for the taking of possession of the Debtor property pending the determination of the debt recovery action.
b) Filing an originating debt recovery action for the recovery of debt.

It was argued further that these two conditions were never fulfilled by the Respondent who instead of complying with the conditions, filed a Motion Ex-parte for judgment in respect of the reliefs claimed against the Appellants. In conclusion, Counsel argued that jurisdiction is a radical and most fundamental issue in any adjudication and that any act purportedly done by a Court that lacks jurisdiction is tantamount to a futile exercise. Counsel then contended that the Court below lacked the jurisdiction to entertain this suit on the 14th day of January, 2021.

The Court was urged to allow the appeal.

The Respondent on the other hand filed its brief of argument dated the 29th day of December, 2021 and settled by its counsel M. B. Usman Esq. wherein the following 3 (three) issues for determination were distilled from the grounds of appeal thus:
a) Whether by the combined effects of Sections 4, 32, 33, 35, 34(1) of Asset Management Corporation Act 2010 and paragraphs 5 of the guidelines on the operation of the Asset Management Corporation Act 2010, Asset Management Corporation of Nigeria is statutorily empowered or has the locus standi to takeover non-performing loans.
b) Whether Sections 34(1)(a)(4)(5) of Asset Management Corporation Act 2010, is unconstitutional on the basis of lack of fair hearing to empower the Corporation to statutorily and summarily exercise her power of possession, foreclosure or sale and takeover of eligible bank assets.
c) Whether or not Section 49 of Asset Management Corporation Act 2010 is the only method prescribed by which to institute AMCON recovery actions in the Court.

On issue one, learned counsel for the Respondent submitted that the core mandate of the Asset Management Corporation of Nigeria (AMCON) is the recovery of non-performing loans and enforcement and realization of collateral. Counsel cited Section 4 of the AMCON Act and paragraph 5 of the Guidelines on the Operation of the Asset Management Corporation of Nigeria, 2010. It was contended that Exhibits A – G found in paragraph 5 of the affidavit shows a full drawdown that the Appellants were granted an inventory finance facility of N10,000,000 for a tenor of 180 days since 2008, and that it is common knowledge that the present year is 2021 and the loan is well over 3000 days. It was submitted that the Appellants were also granted another credit facility of N20,000,000 in 2010 for 60 months, and that the two loans above fall within paragraph 5 of the Guidelines on the Operation of the Asset Management Corporation of Nigeria, 2010.

Counsel then argued that by paragraph 2 of the affidavit in support of the ex-parte motion, the Respondent has succinctly stated their capacity. The cases of VAN VILET TRUCKS (NIG) LTD VS. AMCON & ANOR (2018) LPELR – 46789 (CA) and ABLEEM PETROLEUM CO (NIG) LTD VS. AMCON (2020) LPELR – 50334 (CA) were relied on to show the powers of the Respondent which are statutory in nature.

It was argued further that the combine effects of Section 34(1) and 35 of the Asset Management Corporation of Nigeria Act 2010 is that the Respondent has the statutory powers of ownership once it has fulfilled the purpose of its creation which is to acquire eligible bank assets, and it becomes the owner of the loan instead of the initial banks that advanced the loan facility to the debtor. Counsel thereafter submitted that the step above confers locus standi on the corporation as the bank. Sections 32 and 33 of the Asset Management Corporation of Nigeria Act 2010 were cited and relied on.

On issue 2, learned counsel for the Respondent cited Section 34(1)(a)(4)(5) of Asset Management Corporation of Nigeria Act 2010 and argued that the only requirement is that the loan or facility be categorized as non-performing loan which the Corporation has taken over and then it becomes entitled to the collateral used in securing the loan. The case of ABLEEM PETROLEUM CO (NIG) LTD VS. AMCON (SUPRA) was relied on. It was argued further that the Corporation can exercise its powers summarily in as much as there is a take-over of the non-performing loan of the Appellant. It was then submitted that the Appellants’ properties situate at 71/72 Kuyanbana Crescent off Mayar Road, Narayi High-Cost Kaduna South Kaduna State Nigeria and No. A1 and 3, Kuyanbana Road Barnawa Phase II, Kaduna were assets used to secure the various facilities advanced to the Appellants which can be disposed of summarily by the Corporation in satisfaction of the debt, whether the interest is equitable or not and even where there is dispute as to the amount. It was also argued that the Respondent merely asked the Court to confirm the statutory power to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible assets of the Appellants’ properties.

On issue three, it was submitted that the wordings of Rule 3 of the Federal High Court Asset Management Corporation of Nigeria proceedings Rules 2018 shows the methods the Corporation can commence actions in the Court against any debtor. It was then argued that the originating motion can either be on notice or ex-parte and that the method prescribed under Section 49 of the Asset Management Corporation of Nigeria Act 2010 is one of the methods which falls under Rule 3 of the Federal High Court Asset Management Corporation of Nigeria Proceedings Rules 2018. The case of ISAH VS. STATE (2017) LPELR – 43472 (SC) was cited in support.

RESOLUTION OF THE ISSUES
I have read and summarized the arguments of the counsel for the parties herein, and I shall now proceed to determine the appeal and in doing so I shall adopt the issues for determination distilled by the Appellants herein because in my opinion, they reflect all the issues that have arisen for the determination of this appeal.

ISSUE ONE
Whether the learned trial judge was right when he entered summary judgment granting all the reliefs claimed against the Appellants when it was obvious that the originating Court process which was a motion ex-parte which adversely affected the Appellants was never served on the Appellants thereby denying the Appellants a fair hearing contrary to Section 36(1) of the 1999 Constitution of the Federal Republic of Nigeria (As amended).

The Appellant has argued that in a matter of this nature where there is a claim against the Appellants which adversely affects their rights and obligations, they ought to be put on notice as there is a feature in the case which prevents the Court from exercising its jurisdiction, and that the matter leading to this appeal was initiated and prosecuted in total breach of the principle of fair hearing as provided for in Section 36(1) of the Constitution of the Federal Republic of Nigeria 1999.

The Respondent on the other hand has argued that they can exercise powers summarily and that the only requirement under Section 34(1)(a), (4) and (5) of the Asset Management Corporation of Nigeria Act 2010 (as amended) (AMCON Act 2010 as amended) is that the loan or facility be categorized as a non-performing loan which the Corporation has taken over, and that Section 34(5) of the AMCON Act 2010 (as amended) empowers the Corporation to dispose off the collateralized asset of the Appellants which is acquired under Section 34(1)(a) of the AMCON Act 2010 (as amended) summarily, either by private treaty or other disposal method as may be approved by the board of the Corporation. It has been argued that once the Corporation acquires a non-performing loan which is collateralize in nature, it creates a relationship of a mortgagee and mortgagor between the Corporation and the Appellants, and that from the face of the motion paper all the Respondent merely asked the Court to do is to confirm their statutory power to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible asset of the Appellants’ properties.

In order to resolve this issue, recourse must be had to Section 34(1)(A) of AMCON Act 2010 (as amended) which the Respondent relied on in the lower Court. Section 34(1)(A) of AMCON Act 2010 (as amended) provides as follows:
“Subject to the provisions of the Land Use Act and Section 36 of this Act, upon the acquisition of an eligible bank asset by the Corporation, without any other assurance other than the provisions of this section, the Corporation shall immediately:
(A) Subject to paragraphs (c) (i) and (d), become vested with and acquire legal title to the eligible bank asset and all assets or property tangible or intangible by which such eligible bank asset is secured and be vested with power, to the exclusion of all other creditors, to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible bank asset any tangible or intangible asset or property by which such eligible bank asset is secured in full or partial satisfaction of the debt owed to the Corporation by reason of the acquisition of the eligible bank asset notwithstanding that the security interest in such asset or property is equitable only.”
The law is well settled that where the provisions of a statute are clear, the duty of the Court is to interpret such clear provisions by giving the plain wordings their natural and ordinary interpretation without more. See the case of KRAUS THOMPSON ORGANISATION VS. N. I. P. S. S. (2004) LPELR – 1714 (SC). The provision of Section 34(1) of AMCON Act is clear and unambiguous and the purport of the provision is that by operation of law, where the Respondent acquires an eligible bank asset, same shall be vested in it and it shall then have full possession and exercise all rights and powers and perform all obligations relating thereto.
Simply put, the section vests the eligible bank asset, such as a non-performing loan, on the Corporation when it acquires such eligible asset. The Corporation or the Respondent in this case, shall have the power to exercise all the rights and obligations of the eligible financial institution from which the asset was acquired. It can therefore sell off any collateral offered in respect of the loan to the eligible financial institution. It may also institute any action in Court, to realize the eligible asset acquired. In essence, upon the sale of the debt all the rights and powers pertaining to or attached thereto as well as the obligations thereon become vested in the Corporation. See the case of ABLEEM PETROLEUM CO. (NIG) LTD VS. AMCON (2020) LPELR – 50334 (CA).

From my understanding, the Appellants’ argument is that the method with which this case originated (Motion Ex-parte) is unconstitutional as it breached their right to fair hearing as enshrined in Section 36(1) of the 1999 Constitution (as amended). The reliefs contained in the Motion Ex-parte filed before the Court below are reproduced hereunder as follows:
1. AN ORDER of this Honourable Court entering judgment affirming, pursuant to Section 34(1) (A) of the Asset Management Corporation Act, 2010 (As Amended), that the Applicant has become vested with and acquired legal title to the Eligible Bank Asset and all assets by which the Eligible Bank Asset is secured.
2. AN ORDER of this Honourable Court entering judgment affirming, pursuant to Section 34(1) (A) of the Asset Management Corporation Act, 2010 (As Amended), that the Applicant has become vested with power (to the exclusion of all other creditors) to take possession of, manage foreclose or sell, transfer, assign or otherwise dispose of the schedule hereto.
3. AN ORDER of this Honorable Court directing that a certificate of judgment be issued to the Applicant pursuant to Section 45 (2) of the Asset Management Corporation of Nigeria Act, 2010 (As Amended).
4. AND SUCH FURTHER NOTICE ORDERS as the Court may deem fit to make in the circumstantial of this application.

Looking at the motion ex-parte reproduced above, I cannot help but agree with the learned counsel for the Respondent that the Respondent merely asked the Court to confirm the statutory power of the Respondent (AMCON) to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible assets of the Appellants’ properties. In other words, it was a declaration of the rights vested in the Corporation that the Respondent was seeking for.
In the case of LEEDO PRESIDENTIAL MOTEL LTD VS. BANK OF THE NORTH LTD & ANOR (1998) LPELR – 1775 (SC) with regard to the circumstances under which an ex-parte motion should be brought, the Supreme Court held:
“Motions generally are of two types; Motion on Notice and Ex-parte Motion. A motion is on notice where the applicant has put on notice or awareness the attention of the other party or parties involved of the existence of the motion an ex-parte motion is one in which the applicant for some cogent reasons, cannot put the other party or parties on notice or awareness of its existence. Both are acceptable in law. The general practice, however is that motions are filed in Court on notice. Ex-parte motions are filed but sparingly considered by the Court in extreme or special circumstances. The decision whether an application should be brought ex-parte or on notice is one to be considered in the light of the prevailing circumstances and not to be based on the dictates of the applicant’s or the judge’s whims. An application ex-parte could be made in two circumstances; (i) When from the nature of the application, the interest of the adverse party will not be affected. (ii) When time is the essence of the application and in these two situations a Court will be right in exercising its discretion in granting a motion ex-parte.”
Flowing from the foregoing, it is my belief that the Appellants’ rights were not adversely affected given that Section 34(1)(A) reproduced above, automatically vests power in the Respondent to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible bank asset.

This issue is therefore resolved in favour of the Respondent against the Appellant.

ISSUE TWO
Whether the learned trial judge was not in error when he entered judgment in favour of the Respondent in this suit when the said Respondent failed to establish its locus standi in this action.

The Appellants have argued that the Respondent has no locus standi to institute this action. The Appellant has also contended that the Respondent did not state in the motion how they came to be vested with the power to take possession of the Appellants’ properties. Additionally, the Appellants have argued further that the lack of loan agreement and Limited Servicing Agreement between the Respondent and Eco Bank Nigeria means that there is no evidence of acquisition of the loan by the Respondent. While the Respondent on its own part has argued that the combined effect of Sections 4, 32, 33, 35 of the AMCON Act and paragraph 5 of the guidelines on the operation of the AMCON Act shows that it has the locus standi to take over non-performing loans.

In the case of TILLEY GYADO & CO. (NIG) LTD VS. ACCESS BANK & ORS (2019) LPELR – 47081 (CA), the Court, in giving the meaning of locus standi and what a party must show to establish locus standi, held that:
“Now, locus standi in general parlance means a recognized position or standing. In law, it means a place of standing in Court or right to appear in Court. Locus standi or standing to sue is defined as the legal right of a party to an action to be heard in litigation before a Court of law or Tribunal. The term entails the legal capacity of instituting, initiating or commencing an action in a competent Court of law or Tribunal without any inhibition, obstruction or hindrance from any person or body whatsoever. In other words, locus standi is the right of appearance in a Court of justice or before a legislative body on a given question Dada Vs Ogunsanya (1992) 3 NWLR (Pt 232) 754, United Bank of Africa Plc Vs BTL Industries Ltd (2004) 18 NWLR (Pt 904) 180… The Courts have stated that a party seeking to establish locus standi must show (a) a legal or justifiable right; (b) sufficient or special interest adversely affected; and (c) a justifiable cause of action Attorney General, Kaduna State Vs Hassan (1985) 2 NWLR (Pt 8) 483, Taiwo Vs Adegboro (2011) 11 NWLR (Pt 1259) 562, Adekunle Vs Adelugba (2011) 16 NWLR (Pt 1272) 154, Charles Vs Governor of Ondo State (2013) 2 NWLR (Pt 1338) 294. In other words, for a person to have locus standi, he must show that his civil rights and obligations have been or are in danger of being infringed and that he has sufficient legal interest in seeking redress in a Court of law. In other words, there must be a nexus between the party and the disclosed cause of action concerning his rights or obligations.”

In the same TILLEY GYADO & CO. (NIG) LTD VS. ACCESS BANK & ORS (SUPRA) as it relates to what the Court considers in determining when the plaintiff has locus standi, it was held thus:
“It has been settled by a long line of cases that in determining the locus standi of a party, a trial Court must have regard to, and only to, the originating processes by which the action was commenced or the claim was made by that party, that is the writ of summons and the statement of claim or counter-claim, in an action commenced by a writ of summons, or originating summons or originating motion Global Trans Oceanico SA Vs Free Enterprises Nigeria Ltd (2001) 5 NWLR (Pt 706) 426, United Bank of Africa Plc Vs BTL Industries Ltd supra, Amah Vs Nwankwo (2007) 12 NWLR (Pt 1049) 552, Anozia Vs Attorney General, Lagos State (2010) 15 NWLR (Pt 1216) 207… Where documents are pleaded in the statement of claim and are frontloaded as documents to be relied upon at trial, as part of the originating processes, then such documents might also be looked at, as suggested by the Supreme Court in JFS Investment Ltd Vs Brawal Line Ltd supra.

A trial Court cannot go outside the originating processes in determining the issue of locus standi of a claimant Ntung Vs Longkwang (2018) LPELR 45624(CA)… In Eze Vs Peoples Democratic Party (2018) LPELR 44907(SC), the Supreme Court reiterated this position recently when it stated: Again, where a plaintiffs locus standi to maintain an action is challenged, it is the plaintiffs claim that determines the objection. If, however, the action is commenced by an originating summons, it is the averments in the affidavit in support alone that is examined in determining whether or not the Court is competent to proceed.”

Flowing from the case above, the originating processes of the Respondent must be scrutinized to see if locus standi has been established. In the Respondent’s affidavit in support of the Motion Ex-parte, the Respondent deposed to the following facts in paragraphs 5 – 10:
“5. That the 2nd Respondent personally guaranteed and indemnified all the credit facilities granted to them by the Applicant. Letter of guarantee and indemnity and promissory notes is attached and marked Exhibit A, B and C.

6. That the Respondent on the 21st of January, 2008 applied for an inventory finance facility of 10,000,000 (Ten Million Naira only) from Eco Bank. The letter is attached and marked as Exhibit D.

7. That the application was granted by Eco Bank, through an offer letter dated 11th of February, 2008. The letter is attached and marked as Exhibit E.
8. That the Respondents by her board resolution dated 11th February, 2008 accepted the offer of 10,000,000 (Ten Million Naira only) from Ecobank. The Resolution is attached and marked exhibit.
9. That the Respondents on the 17th of May, 2010 applied for an overdraft of 20,000,000 (Twenty Million Naira only) from Ecobank.
10. That the application was granted by Ecobank for 20,000,000 (Twenty Million Naira only), the credit summary dated 17th May, 2010. The credit summary is attached and marked as Exhibit G.”

Looking at this deposition, it is obvious that the Respondent have indeed proven that the Appellants did in fact take two loans that have matured and become non-performing. However, the Appellants had gone a step further to submit that the Respondent has not shown the loan agreement between it and Eco Bank Nigeria and as such that there is no proof that the Respondent acquired the loan. The Appellants has maintained that the loan purchase agreement is what proves that the Respondent acquired the Eligible Bank Asset which in turn gives it the locus standi to institute this action.

On the issue of whether a loan purchase agreement must be in evidence to show that there was an actual acquisition of the loan by AMCON was brought up in the case of ABLEEM PETROLEUM CO. (NIG) LTD VS. AMCON (SUPRA). In the ABLEEM PETROLEUM case, learned counsel submitted that the failure of the claimant to adduce or tender in evidence, the purchase agreement it entered into with Keystone Bank in respect of the Eligible Bank Asset over the Defendants’ indebtedness, was fatal to the very institution of the suit as the claimant lacks the locus standi to invoke the judicial power having failed to show sufficient interest in the suit. Counsel has also referred to the case of UNITED BANK FOR AFRICA PLC VS. BTL INDUSTRIES LIMITED (2004) 18 NWLR (PT. 904) and has further argued that locus standi being a jurisdictional issue, can be raised for the first time on appeal. Reliance was placed on the case of MADUKOLU VS. NKEMDILIM (1962).
The Court of Appeal in the ABLEEM’s case while answering the contentions of the learned counsel above held that:
“The corporation was established by Section 1 of the AMCON Act as a body corporate and may sue and be sued in its corporate name. By Section 5(a) of the AMCON Act, part of the functions of the Corporation, includes the acquisition of eligible bank assets from eligible financial institutions in accordance with the provision of this Act. By Section 5(f), the corporation may take all steps necessary or expedient to protect, enhance or realize the value of the eligible bank assets that the Corporation has acquired. Sections 32 and 33 of the AMCON Act provide: –
32. An eligible financial institution from which the Corporation has acquired an eligible bank asset shall enter into a purchase agreement with the Corporation in connection with the eligible bank asset acquired…
33. (1) as soon as possible, after the acquisition of an eligible bank asset from an eligible financial institution, the eligible financial institution shall notify the relevant debtor of the acquisition of the eligible bank asset by the Corporation.
(2) The Corporation shall not be liable for any failure or delay in notifying any person under Subsection (1) of this Section and such failure or delay shall not invalidate the eligible bank asset concerned.
Clearly therefore, the Respondent is clothed with the power to acquire eligible bank assets (which includes a non-performing loan) from an eligible financial institution, and then realize its value. This is reinforced by the provision in Section 34(1) of the AMCON Act (as amended) which vests the eligible bank asset, such as a non-performing loan, on the Corporation, when it acquires such eligible asset. It shall exercise all the rights and obligation of the eligible financial institution from which the asset was acquired. It can therefore sell off any collateral offered in respect of the loan to the eligible financial institution. It may institute any action in Court, to realize the eligible asset acquired (Sections 35(1) and(4)(a) of the AMCON Act, (as amended) … With all these, it is fallacious for the Appellant to argue that the Respondent did not prove the fact of the take-over of the debt from Keystone Bank. The facts were pleaded. There is supporting evidence in the Witness Statement on Oath. The documents were front-loaded. The Appellant did not contest them. In the premise, the trial Judge was right to hold that there is proof of the purchase of the non-performing loan of the Appellant. It was not at all necessary, to tender the purchase agreement. At any rate, by Section 33(1) of the AMCON Act, it is not the duty of the Respondent to inform the Appellant of the fact of the take-over of the non-performing loan. That duty has been laid squarely on the shoulders of the eligible financial institution.”
The case above is on all fours with the instant case and I agree with the reasoning above. The Appellants’ argument regarding the loan purchase agreement is of no moment. The Respondent in its Affidavit in Support of the Applicants’ Originating Motion Ex-parte specifically made deposition to the effect that the Appellants were granted a loan and an overdraft which is now a non-performing loan that it purchased from Ecobank as an Eligible Bank Asset. Additionally, from its very objective in Section 4 of the AMCON Act 2010 (as amended), the Respondent is a statutory body set up for the purpose of assisting Eligible Financial Institutions to efficiently dispose of eligible bank assets and to efficiently manage and dispose of eligible bank assets. The Respondent therefore has the locus standi to institute this action.
See RODETHORNE (NIG) LTD & ANOR VS. AMCON (2020) LPELR-50395(CA).

This issue is thus resolved in favour of the Respondent against the Appellants.

ISSUE THREE
Whether the learned trial judge was not in error when he entered judgment in favour of the Respondent, against the Appellants when the provisions of Section 49 of the Asset Management Corporation of Nigeria (AMCON) Act 2010 as amended, were not complied with.

This issue deals with the issue of non-compliance with Section 49 of the AMCON Act 2010 (as amended) as it relates to the mode and manner the suit leading to this appeal was filed, prosecuted and judgment delivered. The Respondent on its own part has argued that Rule 3 of the Federal High Court Asset Management Corporation Proceedings Rule 2018 states the methods of commencement of action and that originating motion can either be on notice or ex-parte.
Section 49 of the AMCON Act 2010 (as amended) provides as follows:
where the corporation has reasonable cause to believe that a debtor or debtor company is the bona fide owner of any movable or immovable property it may apply to Court, before or at the time of filling of action for debt recovery or other like action or at any time after the filing of action, and before or after the service of the originating process by which such action is commenced on the debtor or debtor company, by motion exparte for an interlocutory order granting possessions of the property to the Corporation pending the hearing and determination of the debt recovering or other action to abide the decision in such action.
Indeed, the Appellants are correct to the extent that Section 49 of the AMCON Act 2010 (as amended) provides a method of commencing an action. The Appellants are not right when they submitted that by Section 49 of the AMCON Act 2010 (as amended), the two conditions which must be fulfilled by the corporation are:
i. Filing an action for debt recovery or other like action.
ii. Apply by motion exparte for an interlocutory order granting possessions of the property to the Corporation pending the hearing and determination of the debt recovering or other action.
The Respondent can seek for and obtain an ex-parte order under Section 49 before filing an action for debt recovery or other like action.
Taking a closer look and scrutinizing the Section above, one would notice that Section 49 of the AMCON Act 2010 (as amended) deals with the commencement of a debt recovery action where the Corporation is seeking for an order of possession. As I have already mentioned when determining issue one above, this action is one that seeks to get the Court to confirm that the Respondent is vested with the power to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the acquired eligible bank asset. In other words, this action is one that seeks just a declaration of the statutory powers vested in the Respondent. Therefore, what the Respondent sought to do by this action was not debt recovery which seeks an order of possession as laid down in Section 49 of the AMCON Act 2010 (as amended).

This issue is therefore resolved in favour of the Respondent against the Appellant.

On the whole, I find no merit in this appeal and same is accordingly hereby dismissed. The decision of the Federal High Court, Kaduna Division delivered on the 14th day of January, 2021 by Mallong J, is hereby upheld. I make no further order as to cost.

AMINA AUDI WAMBAI, J.C.A.: I have read the lead judgment delivered by my brother, Mohammed Baba Idris, JCA. I agree with the sound reasoning and the conclusion and have nothing to add. I adopt his reasoning in dismissing the appeal and affirming the decision of the lower Court delivered on 14/01/2021.

ABUBAKAR MAHMUD TALBA, J.C.A.: I have had the benefit of reading in draft the lead judgment of my learned brother, MOHAMMED BABA IDRIS, JCA, and I agree with the reasoning and conclusion.