N.B.C V SAID ALLY YAKUTI

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THE NATIONAL BANK OF COMMERCE v SAIDI ALLY YAKUT 1989 (HC) [Reported]

Case Summary:
The plaintiff the National Bank of Commerce is claiming from the defendant Saidi Ally Yakut shs. 283,684/40 which is an outstanding sum in the
defendant's current account by way of an overdraft at Karagwe Branch of the N.B.C. It is said the defendant fraudulently obtained overdraft
facilities at the said bank to the tune of sum of money that is claimed. The defendant who was represented by counsel Mr. Rugarabamu denied
that he ever made an application for an overdraft, let alone a fraudulent application for an overdraft. The plaintiff was represented by Counsel Mr.
Banturaki from the Tanzania Legal Corporation.
The sole witness for the plaintiff was Mr. Edward E. Mbogo (PW l) who is the current branch manager of N.B.C. at Karagwe since May l985. Prior
to that, the branch manager was one Mr. Madaha. It is common ground that the defendant has a current account with the N.B.C. at Karagwe.
According to the records in possession of PW 1 the defendant on 5/5/l984 deposited a sum of shs. 279,500/= in his account using a country
cheque of that sum that was drawn by a customer having an account at N.B.C. Market Street, DSM. Then on 7/5/l984 the said defendant was
allowed to draw the shs. 279,000/= from his account using his cheque which is Exh.D in court. The witness said that they paid the defendant
before his country cheque was cleared in DSM; and that was because they trusted the defendant.
Mwalusanya J Held:
(i) A collecting bank owes a duty of care to its customers in that it should conduct its activities with care and circumspection;
(ii) from facts of the case the bank was either grossly negligently or acted deliberately to incur such loss.
Judgment for the defendant.

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