CASE DIGEST - LITIGATION: RECEIVERS POWER; DOCTRINE OF LIS PENDENS; EVEN A RECEIVER CANNOT TRANSFER ANY VALID INTEREST IN PROPERTY WHILE PROCEEDINGS ARE PENDING

CASE DIGEST - LITIGATION: RECEIVERS POWER; DOCTRINE OF LIS PENDENS; EVEN A RECEIVER CANNOT TRANSFER ANY VALID INTEREST IN PROPERTY WHILE PROCEEDINGS ARE PENDING

NIGERIAN INDUSTRIAL DEVELOPMENT BANK LTD;
M.M. ADABA v. KAN BISCUITS COMPANY LTD

SUPREME COURT OF NIGERIA

(MUHAMMAD; NWEZE; ABBA-AJI; OGUNWUMIJU; JAURO JJ.SC)

By a loan and mortgage agreement, Kan Biscuits Company Ltd. (Respondent) took a term loan of US$921,080.00, U8$25,094.00 and N1,568,000.00 from the Nigerian Industrial Development Bank Ltd. (1st Appellant) to acquire additional plant, equipment and machinery for its biscuit factory project (Kan Biscuit Factory). In default, M.M Adaba (2nd Appellant) was appointed as Receiver. On this note, the Respondent sued the Appellants at the Federal High Court (trial Court), challenging the appointment of the 2nd Appellant by the 1st Appellant as Receiver in respect of the assets of the Respondent. Nevertheless, while the matter was pending before the trial court, the Appellants went ahead and sold the factory of the Respondent to DE-ENDY INDUSTRIAL COMPANY LIMITED. Consequently, the Respondent by a motion on notice before the Federal High Court where the matter was pending, sought to set aside the sale being made pendente lite. The trial court delivered its ruling on the motion and thus set aside the sale.