Bounced Or Dud Cheque And Its Legal Consequence In Nigeria
In our traditional Nigerian banking system, cheque books are only offered to current account owners who are in turn charged on transaction. The present advancement in banking has invoked the offering of savings account with cheque books and quasi-cheque books with limited features and acceptability.
As one of the most common negotiable instruments in Nigeria, a cheque is a bill of exchange drawn on a banker payable on demand as defined in SECTIONS 73 of the BILL OF EXCHANGE ACT, CAP; B3 LFN 2004, VOL.2. The use of cheques invokes lots of rights and duties on banks/banks, account-holder/owners and payee (persons whose favour cheques are written) which is actionable in both civil and criminal law. This writing will broaden your mind to your rights and duties either as an accountholder, payee or a bank/banker.
A cheque by use and convention is an unconditional order in writing addressed by an accountholder (an owner and user of an account, also known as the DRAWER) to a bank (the bank that created, manages and administers the account and issued the cheque booklet also known as the DRAWEE) signed by the “drawer”, requiring the banker (the DRAWEE) to pay on demand a sum certain in money or to the order of a specified person or bearer (also known as the PAYEE). This bill of exchange is mostly used in Nigeria as either an OPEN CHEQUE also known as uncrossed cheque or a CROSSED CHEQUE. The open cheque can easily be paid to the bearer over the bank counter while crossed cheques are limited.
The relationship between a bank and an accountholder is that of a “debtor and creditor” and at times it is also that of a “principal and agent”. When an account holder deposits money with his bank, a “debtor and creditor relationship” has been created. The account-holder is the creditor while the bank is the debtor. The bank is under a duty to pay back what the account-holder has given to it under their existing terms and conditions. Where an accountholder issues a cheque to his bank instructing his bank to pay the bearer/payee, then the relationship between the bank and the accountholder is that of agency “principal and agent”. The accountholder is the principal on whose instructions the agent (bank) would pay whom the accountholder so desires. In every relationship there are rights and duties; which one of them in the prevailing banker-customer relationship is to safeguard deposited money and pay same out on instructions of the owner. One of the major means of payment is by cheques and other bank notes. Bank cheques invoke a web of rights and duties; from the bank to the accountholder and from the accountholder to the payee (person in whose favour cheque has been issued).
Onyekachi Umah is a private Legal Practitioner with amazing experience in business law, intellectual property, transaction and regulation advisory, corporate, commercial, investment law and energy law as well as litigation and arbitration arising from them. He is a Legal Awareness Expert and also a Certified Arbitrator both in Nigeria and the United Kingdom. He is a member of the Chartered Institute of Arbitrators (UK) and a Certified Conflict Management Practitioner and Negotiator. He is a member of prestigious “Young ICSID” of International Centre for Settlement of Investment Disputes (ICSID), Washington DC. Among other, he has a certificate in Law of Contract from a program of Harvard University, a certificate in International Environmental Negotiation from United Nations Institute for Training and Research, Geneva and recently, a certificate in Conflict Management from United States Institute of Peace, Washington, D.C. He also holds a master of laws degree from University of Jos and he is a doctoral student at the faculty of law, Nassarawa State University.
Onyekachi is the managing partner of a leading law firm; Bezaleel Chambers International. He is the founder and President of a free law awareness platform known as www.LearnNigerianLaws.com that promotes awareness and understanding of rights and laws of Nigeria (#SabiLaw) and offers free daily law tips (#DailyLawTips). Understanding the challenges of Administration of Criminal Justice in Nigeria, he dedicates his daily law tips every Mondays to promoting Criminal Justice (#CriminalJusticeMonday). Recently, he started a new series on Election Laws tagged (#SabiElectionLaws) to increase legal awareness on elections laws, policies and regulations in Nigeria. He is the convener of the Sabi Law Lecture Series (#SabiLawLectureSeries), travelling around Nigeria delivering free law awareness lectures. He also organises and sponsors a quarterly competition, titled "Sabi Law Video Challenge" (#SabiLawVideoChallenge) where Nigerians win money (over $130.00 per winner) for making videos of themselves talking on any law or right as a way to promote law awareness and have fun. To further promote legal awareness among Nigerians across the world, he started a law awareness show titled "Sabi Law With Onyekachi Umah, Esq" (#SabiLawWithOnyekachiUmahEsq) showing on social media platforms via @LearnNigerianLaws.
Mr. Umah has written over Three Hundred (300) free to access articles and materials on law with a desire to enlighten the public. He is also on the board of companies and non government organisations. Among others, he is serving as a member of the Advisory Committee for Law Clinics Partnership for Reforming Pre-trial Detention in Kuje Prison Project funded by the United States Department Bureau for International Narcotics and Law Enforcement. He is member of the Rotary Club of Abuja, Metro (RCAM), District 9125. He has been featured as the Legal Personality of the Week by This Day Newspaper (a leading national newspaper) on its September 11, 2018 edition and was featured on the NigeriaLawyer.com as the Legal Personality of the Week on November 14, 2018. He has won several honours and awards for his innovative legal practise across the world.
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