By Innocent Anaba
A construction company, Buebe Ventures Limited and its Managing Director, have sued Skye Bank Plc before a Lagos High Court, challenging the sale of a property the company used as collateral for a loan facility.
The said property is located on located on Plot 372, â€˜Tâ€™ Close, 21 Road, Festac Town, Lagos.Â The company is contending that the bank sold the property without due process and by falsifying the Deed of Mortgage of the property. The plaintiffs are meanwhile claiming N8milion as damages.
Meanwhile, the bank has denied any wrong doing, insisting that it acted within the terms covering the facility granted the plaintiffs. The plaintiffs are further contending that they obtained from the defunct Co-operative Bank Plc, which was taken over by Skye Bank, an over draft facility of N3million for a period of six months on March 1997, which was repaid.
The repayment encouraged the defendants to advance another facility of N4.5m for 30 days, repayable on February 2002, while the property located on Plot 372, â€˜Tâ€™ Close, 21 Road, Festac Town, Lagos was used as collateral andÂ on the servicing of the debt, it was agreed it would be from Nigerian Port Authority contracts, which understanding was well reflected in the necessary agreements.
According to the company, â€œwhile the NPA patronage lasted, it serviced the debt regularly, while in 2000, a Deed of Mortgage was executed to confirm the security and the rights of parties were clearly stated in the said Deed, which was filed with Federal Housing Authority, the statutory body in charge of land and property in Festac Town, Lagos.
Further, the company argues that â€œregrettably, its source of financing the facility dried up because the NPA refused/failed to award us new contracts or pay for contracts already awarded and as a result, we had difficulties and servicing the facility became difficult and impossible,Â owing to no patronage, the account with the bank became dormant since 2003 and all through the period, defunct Co-operative Bank, in spite of repeated demands, refused to furnish us, our statement of account to enable it confirm or raise queries, if any, on the entries/charge on its accountâ€.
According to the company, â€œrather than comply with normal/ordinary banking practice of making available statement of account to us, our statement of account, the defunct Co-operative Bank was in the habit of confirming to us, on request, the balance on our account without making available any statement of account supporting these balances. And owing to their refusal to furnish us with the statement of account, we were constrained to rely on whatever figures given to us by the bankâ€.
They added that â€œon October 30, 2003, relying solely on what the bank represented, we admitted owing the bank about N11.4million and the bankâ€™s admission of N19m as debt was based on what the bank told our MD in Ibadan, Oyo State after a meeting. The bank was at all material time to this suit, our banker, until unfolding event punctured our confidence and trust in the bank.
Again, from the period, owing to the zero patronage from NPA, we were not able to meet up with our financial commitment to the bank, with respect to the overdraft facility, the credit granted by the bank to us acquired the status of â€˜non-performingâ€™ credit facility and in accordance with the Prudential Guidelines of the CBN, issued on November 7, 1990 to all licenced banks in Nigeriaâ€.
The plaintiffs are further contending that â€œunder the said guideline, a credit facility becomes â€˜non-performingâ€™, if interest on principal is due and unpaid for 90 days or moreâ€ and that the credit facility granted by the bank falls under the â€˜non-performingâ€™ category because of the interest on the principal became due from February 9, 2003 and same remained unpaid for 90 days or more.
According to the plaintiffs, in flagrant violation of the guidelines under consideration, Skye bank, which took overÂ Co-operative Bank, continued to roll-over the non-performing credit facility without taking into account the repayment capacity the borrower, adding that since it was no longer enjoying the patronage of NPA, it therefore had no capacity to repay the facility.
The plaintiffs are, however, saying that they were more concerned that even when the statement of accounts were eventually provided, it provided conflicting figures, contrary to what the bank had presented, claiming that the bank deliberately inflated the its debt with a view to make it impossible for them to liquidate the inflated debt and that the purported sale of their property, was carried out when negotiation between parties was on-going, after the bank had given the impression that it would not do anything to jeopardize their interest.
According to the plaintiffs, the actual debt was still in dispute when the bank went ahead to sale the property, praying the court to declare same as illegal, invalid, null, void and consequently of no effect whatsoever.
The plaintiffs are asking the court to declare â€œthe sale of their property pursuant to a forged Deed of Mortgage as illegal, unlawful, invalid, null and void and of no effect whatsoeverâ€, in addition to praying the court to set aside the purported sale of the property.
The bank has, however, denied any wrong doing, saying that all it did was in accordance to the agreement entered between parties.