Federal court strips banks, police, lower courts of powers to freeze customers’ accounts

A Federal High Court sitting in Lagos has ruled that Magistrate, Area and Customary Courts do not have the statutory powers to issue orders restricting or freezing the bank account of customer or reversing a transaction in such account on the application of law enforcement agencies or even private citizens or organizations.

In a landmark judgement delivered today (Tuesday, October 7, 2025) by Honourable Justice Ibrahim Ahmad Kala who presided over the matter in Suit No: FHC/L/CS/07/2025 (AIMAN MAHFOUZ v FIDELITY BANK PLC), the judge said “I … know of no law that cloth a Magistrate with statutory powers to issue order restricting or freezing the bank account of customer or reversing a transaction in such account on the application of law enforcement agencies or even private citizens or organization.”

Justice Kala drew the attention of the “Police hierarchy and commands across the states of the need by its officers to observe or ensure the observance of due process and satisfy the requirement of the law in the investigation of funds standing in credit of the account of suspect perceived to be derived from the proceeds of crime. The investigative powers of the Police do not and can never include the power to freeze an account without a valid Order of court of competent jurisdiction, id est, the High Courts.”

He also made what he called a “clarion call” to the various head of courts in the country of “the need to issue out circular for the stoppage of this malfeasant in the grant of such ex parte orders by the inferior courts under their administrative control. Ditto on the need for the Respondent’s bank, nay any other financial institution in Nigeria to issue out general circular across all their branches not to recognise ex parte order obtained from any inferior court (be it Magistrate, Area and or Customary Courts) restricting money standing on the bank account of customer in Nigeria or seeking for transaction reversal in such account, same having now been substantially, pronounced as being outside the jurisdictional competence of the inferior courts, and by so doing, both the bank and the Nigeria Police Force will safeguard themselves from unnecessary litigation and its attending consequences.

On the role of the Nigeria Police Force in instigating such an action, Justice Kala said “It would have followed naturally that the Applicant is entitled to compensatory damages for the breach of his fundamental right specifically, against the Nigeria Police Force, being the enablers that secured the purported order of the Magistrate Mararaba and executed same against the Respondent restricting the Applicant’s account that prevented him with money standing to his credit in his account from accessing the money. Unfortunately, police are not made a party in this instant suit.”

The applicant in the case had, via a Fundamental Human Right Enforcement Procedure, asked for reliefs that the Respondent either acting directly or through their subordinates or anybody whatsoever, be declared not to have the right or vires in law and “under the Constitution of the Federal Republic of Nigeria 1999 (as amended) and the African Charter on Human and People’s Rights, to restrict the accounts of the Applicant with Respondent without following the due process of the law.”

He also sort a “declaration that the purported Order of Magistrate Court of Mararaba Nasarawa State holden at Mararaba Gurku in Suit No. M419/2024 between Inspector General of Police v. Fidelity Bank & Anor dated October 18 2024 relied upon by the respondent to violate the rights of the Applicant is null and void.”

Nigerian Sketch glimpsed from the court documents that the applicant, a businessman who operates Account Number …………….. domiciled with Fidelity Bank in Lagos Lagos, had his account restricted by the bank in October, 2018.

The bank denied him withdrawal access, acting on a Magistrate Court Order in Osogbo, Osun State.

After the restriction persisted for a long time and upon the conclusion of the purported investigation on the said account by the police, an order of the same Magistrate Court in Osogbo ordered the lifting of the restriction on the said account on the 10th of March, 2023.

A letter emanating from the office of the Commissioner of Police in Lagos dated 10th of March, 2023 was written to communicate the later Court Order to the bank mandating the bank to lift the said restriction on the said account of the Applicant. Yet, the restriction was not lifted.

The customer later made several complaints to the bank to lift the restriction, but no avail.

Rather, the bank claimed that they have another order of Magistrate Court, Mararaba, Nasarawa State in Suit No. M419/2024; between Inspector General of Police v. Fidelity Bank & Anor dated October 18th 2024 had further restricted the Applicant’s account.

Since then, the customer’s account remained restricted and no definite allegation has been made against him to warrant the restriction of the said account.

The customer therefore felt that his fundamental right to own movable property enshrined under Section 44 of the 1999 Constitution (as amended) had been infringed. Nigeriansketch