Justice Ibrahim Ahmad Kala of the Federal High Court in Lagos has ruled that Nigerian banks must no longer recognise or enforce freezing and Post-No-Debit (PND) orders issued by Magistrates’ or other inferior courts.
The landmark judgment, delivered in the case of Aiman Mahfouz v. Fidelity Bank Plc (FHC/L/CS/07/2025), is expected to have wide-ranging implications for law enforcement agencies, banks, and customers across the country.
In his ruling, Justice Kala held that Magistrate Courts, Area Courts, and Customary Courts lack jurisdiction to issue ex-parte orders freezing or restricting funds in bank accounts, describing such actions as “malfeasance” and “a violation of constitutional rights.”
He also emphasised that only courts of competent jurisdiction, namely High Courts, can validly authorise such restrictions in line with due process.
“The investigative powers of the Police do not and can never include the power to freeze an account without a valid order of a court of competent jurisdiction,” the judge declared. “Banks and the Nigeria Police Force must safeguard themselves from unnecessary litigation by refusing to act on such invalid orders.”
Justice Kala directed banks and other financial institutions to circulate internal notices across their branches instructing that no ex-parte freezing or transaction reversal orders obtained from inferior courts should be recognised henceforth.
He equally called on heads of judicial bodies nationwide to issue circulars stopping subordinate courts from granting such orders, warning that these actions violate constitutional rights and exceed their powers.
The case was instituted by businessman Aiman Mahfouz against Fidelity Bank Plc, after his accounts were frozen based on an ex-parte order obtained by the Police from a Magistrate Court in Mararaba, Nasarawa State.
Mahfouz, through his counsel, Clement Alaye, sought judicial redress over what he described as an unlawful restriction of his funds and a violation of his fundamental rights under the Nigerian Constitution and the African Charter on Human and Peoples’ Rights.
Mahfouz asked the court to declare the order null and void, arguing that the bank had no legal authority to freeze his accounts based on an order from an inferior court. He also sought damages of N200 million for injury suffered as a result of the unlawful restriction.
Although the bank did not file a counter-affidavit, its counsel, George Lekwa, later filed a motion to set aside the proceedings, which the judge dismissed as an abuse of court process.
After examining the submissions, Justice Kala ruled in favour of the applicant, setting aside the Magistrate Court’s order and awarding N500,000 in costs against the bank.
The judge, however, declined to award exemplary damages against the Police since they were not joined as a party to the suit, citing Supreme Court precedent that a court cannot issue judgment against a person not named in a case.
Justice Kala’s decision reinforces previous judicial interpretations that the Police and other security agencies must comply strictly with due process when investigating funds suspected to be linked to criminal activities. He referenced Access Bank v. Barr. Anthony Kelechi Agbasiere, where it was held that the Police cannot unilaterally direct a bank to freeze a customer’s account.
Legal analysts describe the ruling as a significant victory for banking transparency and individual rights, warning that it will likely reshape the relationship between law enforcement agencies and financial institutions.
The court’s clear directive now bars banks from acting on orders from inferior courts to freeze or reverse transactions, a practice that has become widespread in recent years.
With this judgment, Justice Kala reaffirmed that the constitutional right to property cannot be curtailed by administrative shortcuts or judicial overreach, insisting that only the High Court possesses the authority to impose restrictions on a person’s bank account after due legal process.
