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FEDERAL REPUBLIC OF NIGERIA
Hannah Abraham, a businesswoman had been the business partner of Mr. John Okeke, since 2008. Hannah had previously received various sums of money as loan from John Okeke for her business. She had always paid back each of the loans with interest until the loan leading to the charge against her. The said loan, which was for the sum of N7,000,000.00, was to service a Local Purchase Order (LPO) for the supply of 22 trucks of diesel to the News Agency of Nigeria (NAN). Hannah executed a loan agreement with John Okeke, which included terms for repayment of the loan in seven months with N1,400,000.00 to be paid monthly. Hannah was however duped to the tune of the sum of N160,300,000.00, as a result of which she defaulted in payment, in breach of the terms of the loan agreement.
Hannah issued John Okeke with a cheque of N3,000,000 on his request. But, when John Okeke presented the cheque for payment, it was dishonoured. John Okeke reported the matter to the Police who arrested and detained Hannah. Hannah issued another cheque in the sum of N7,000,000.00 as a condition for her bail. John Okeke again presented the cheque for payment but it was also dishonoured. Hannah was subsequently arrested by the operatives of the Economic and Financial Crimes Commission (EFCC) and arraigned for issuing dishonoured cheques.
At the conclusion of the trial, the learned trial Judge found Hannah guilty and sentenced her to two years imprisonment for issuing dishonoured cheques.
Aggrieved by the judgment, Hannah appealed to the Court of Appeal.
What is the legal implication of issuing a dud cheque?
Issuance of a dishonoured cheque is a criminal offence under the Dishonoured Cheques (Offences) Act, 2004.
Cheques are not issued for the fun of it, more so when the drawer has existing financial obligations to the drawee. The issuance of a cheque has certain connotations in law. A cheque issued by a drawer and accepted by the drawee serves two purposes. One is that of documenting the particular transaction. The other is that it is a medium of payment, the issuance of which has far-reaching implications in law. A cheque is a written order to a bank to pay a certain sum of money from one’s bank account to oneself or another person. It is for all intents and purposes an instrument for payment. It changes into physical cash on due presentation at the bank and that makes it legal tender.