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In The Supreme Court of
On Friday, the 13th of December
2002
Before Their Lordships
SC. 137/2001
SC. 189/2001
SC. 253/2001
SC. 277/2001
SC. 296/2001
(Consolidated)
Between
And
Judgement of the Court
Delivered by
Sylvester
Umaru Onu,
J.S.C.
The five Suits
considered together herein are so considered because of similarity as
to facts and for facility and convenience of trial. I have decided to
consolidate them, as I shall shortly demonstrate.
Be that as it may, I wish to
commence their considerate observing that as the Lagos State
Attorney-General's case is Comprehensive albeit that the other States are
asking for less the same I will dwell more on the Lagos State case while
forgetting to treat the other States' matters in due course. In dealing with
the reliefs claimed in all these cases one cardinal point that remains
uppermost in my mind, however, is the fact that our decision in this court
reported as Attorney-General, Federation v. Attorney-General,
In the
"18.
Whereof the plaintiff claims the following Reliefs:
1.
A declaration that it is illegal and unconstitutional being contrary
to Section 162(3) of the Constitution
of the Federal Republic of Nigeria 1999 for the defendant to make
deductions as a first line charge on the Federation Account to fund the
following to wit:
(a)
NNPC joint venture projects;
(b)
NNPC priority projects;
(c)
Central Bank of Nigeria (CBN) priority projects;
(d)
The National Judicial Council;
(e)
Foreign Debts incurred by, the Federal Government;
(f)
1% of the Federation Account said to be statutory allocation to the
2.
A declaration that the defendant is under
Section 162(3) of the Constitution of
the Federal Republic of Nigeria, 1999 to distribute the amount standing
to the credit of the Federation Account between the Federal, State and Local
Government Councils and to no other party or Fund.
3.
A declaration that the defendant is not entitled to make any
deductions whatsoever from the Federation Account before the amount in the
Account is distributed among the Federal, State and Local Government
Councils on the terms and in the manner prescribed by the National Assembly,
and that any prior deductions before such distribution as being made at
present by the defendant is illegal and unconstitutional being contrary to
section 162(3) of Constitution of the
Federal Republic of Nigeria, 1999.
4.
A declaration that on a proper construction and interpretation of
Sections 80, 81 and 162 of the
Constitution of the Federal Republic of Nigeria, 1999 the payment of
salaries of Judicial Council is not a charge on the Federation Account and
it is illegal and unconstitutional to deduct those salaries directly from
the Federation Account as first line charge or at all.
5.
A declaration that the Federal Government is mandatorily obliged by
the combined effect of Section 162(i)
and (iv) of the Constitution of the Federal Republic of Nigeria 1999 to
pay into Federation Account all the proceeds and income, save those exempted
under Section 162(i), accruing from the privatisation of government
enterprises, from stamp duties, capital gains and other income accruing to
or derived by Federal Government from any other source.
6.
A declaration that it is unconstitutional and illegal for the
defendant whether by itself, its office agents, privies, or otherwise
howsoever to withhold and not pay into the Federation Account proceeds
and/or income, save those exempt under Section 162(i), accruing from
privatisation of government enterprises and other income accruing to or
derived by the Federal Government from any other source.
7.
A declaration that the defendant is not entitled within the proper
meaning of Section 162(5) and (8) of
the Constitution of the Federal Republic of Nigeria, 1999 to pay the
amount standing to the credit of the Local Government Councils in the
Federation Account directly to the Government Councils and that such
payments by the defendant is illegal and unconstitutional.
8.
An order directing the Federal Government Nigeria, whether by
herself, her officers, servants, and/or privies or otherwise howsoever to
pay such sums or amount as are standing credit of the Local Government
Councils Federation Account from time to time to the plaintiff for the
benefit of the States and Local Government Councils in accordance with the
provisions of Section 162(5) of the
Constitution of the Federal Republic of Nigeria, 1999.
9.
A declaration that the deduction of funds from the Federation
Accounts by the defendant to fund and maintain a Stabilisation Account is
illegal and unconstitutional.
10.
A declaration that it is illegal and unconstitutional for the
defendant to deduct any sums of money from the Federation Account for the
purpose of servicing foreign or external debts incurred by the Government.
11.
A declaration that Section l
(d) (i - v) of the Allocation of Revenue (Federal Account, etc.) Cap. 16,
Laws of the Federal Republic of Nigeria as amended by Decree No. 106
of 1992 is inconsistent with Section 162(3) of the Constitution of the
Federal Republic of Nigeria, 1999 and is to that extent invalid,
unconstitutional, null and void and of no effect.
12.
A declaration that Section 3
and 6(1), (2) and (3) of the Allocation of Revenue (Federation Account) Act,
Cap. 16, Laws of the Federal Republic of Nigeria as amended by Decree No.
106 of 1992 are inconsistent with
Section 162(5), (6) and (8) of the Constitution of the Federal Republic of
Nigeria, 1999 and are invalid, unconstitutional, null and void and of no
effect.
13.
An order directing the federal government to render a full and proper
account of all the monies properly payable into the Federation Account and
or mandatory/required to be paid into the Federation Account as stipulated
by Section 162(1) and (10) of the
Constitution of the Federal Republic of Nigeria, 1999 from 29th
May, 1999 till Judgment.
14.
An order directing the Federal Government of Nigeria to pay to the
plaintiff all sums properly found due and unpaid to the plaintiff in respect
of its share from the Federation Account on the proper and lawful
distribution amongst the States of the appropriate and true amount standing
to the credit of States in the Federation Account.
15.
An order of injunction restraining all officers, servants and
functionaries of the Government of
the Federal Republic of Nigeria or any other public officer
whomsoever and howsoever from keeping.
16.
An order of injunction restraining the Federal Government of Nigeria
whether by herself, servants, and/or agents or otherwise howsoever from
breaching the clear provisions of
Section 81 (3) and 162 of the Constitution.
17.
An order of injunction restraining all office servants, and
functionaries of the Government of the Federal Republic of Nigeria or and
other put officer of the said Government whomsoever; howsoever from
deducting or taking any money whatsoever from the Federation Account for the
purpose of funding any project or effecting any payment whatsoever except
for the pi of distributing such monies amongst the Federal, State and Local
Government as provided by law.
18.
An order of injunction restraining all officers, servants and
functionaries of the Government of the Federal Republic of Nigeria or any
other public officer
of the said Government whomsoever and howsoever from withholding and not
paying into the Federation Account all the revenue collected by the
Government of the Federal Republic Nigeria from any source whatsoever.
19.
An order of injunction restraining the Government of Nigeria whether
by its servants and functionaries whomsoever howsoever from breaching the
provisions of Section 162 of the
Constitution of the Federal Republic of Nigeria, 1999."
A 13-paragraph statement of
defence was filed on behalf of the defendant, thus joining issues with the
plaintiff, as follows:
"Save and Except as is
hereinafter specifically admitted, the Honourable Attorney-General of the
Federation and Minister of Justice (hereinafter referred to as the
defendant) denies each and every allegation of fact contained in the
plaintiff's statement of claim as if same were specifically set out and
traversed seriatim:
1.
The defendant admits paragraphs 1, 2 and 3 of the plaintiff's
statement of claim.
2.
The defendant admits paragraph 4 of the statement of claim only to
the extent that the President shall table before the National Assembly
proposals for revenue allocation, upon receipt of advice from the Revenue
Mobilisation, Allocation and Fiscal Commission.
3.
The defendant admits paragraph 5 of the statement of claim.
4.
The defendant admits paragraph 6 of the statement of claim only to
the extent that the Federation Account Allocation Committee meets monthly to
ensure that allocation made to the States from the Federation Account are
promptly and fully paid into the Treasury of each State on the basis and
terms prescribed by the Allocation of
Revenue (Federation Account, etc) Act, as amended, and the 1999
Constitution.
5.
The defendant in further rebuttal of the averments in 6 (i - v) of
the statement of claim state as follows:
(i)
That any amount standing to the credit of the Federation Account
shall be distributed among the Federal and State Government Councils in each
State on such terms and in such manner as may be prescribed by the
National Assembly.
(ii)
The distribution of any amount standing to the credit of the
Federation Account is subject to the prescription of the terms and manner of
such distribution by the National Assembly, and the latter has not
prescribed such terms and manner.
(iii)
That all debts currently being charged on the Federation Account are
the debts previously charged before 29th May, 1999 and which
shall continue to be so charged by virtue of
Section 314 of the 1999 Constitution.
6.
The defendant in response to paragraph 8 of the statement of claim
state that the payment to the States Primary Education Board and the
Education Tax Fund is in compliance with the extant statute on this Subject.
7.
The defendant States in response to paragraph 9 of the statement of
claim that the deductions made either as first line charges on the
Federation Account or otherwise are not illegal -and unconstitutional. This
is because pending the Act of the National Assembly in this regard the
system of revenue allocation in existence shall continue to apply.
8.
The defendant avers in response to paragraphs 10 and 11 of the
statement of claim that until the Act of the National Assembly comes into
force, deductions or disbursements from the Federation Account Under the
existing distribution System put in place pursuant to the existing laws
continue to be in force constitutionally by virtue of
Sections 313, 314 and 315(4) (b) of
the 1999 Constitution.
9.
The defendant denies paragraph 12 of the statement of claim and state
that in so far as the National Assembly has not made any prescription as to
the allocation and distribution of the amount standing to the credit of the
Federation Account, the existing laws continue to be in force.
10.
The defendant denies paragraph 12 of the statement, of claim and
state that the retention by the Federal Government since June, 1999
Constitution which provides that the National Assembly in exercise of its
powers, shall prescribe the manner for distribution of such funds; and that
the National Assembly has not made any Act specifying manner for
distribution of such funds described herein.
11.
The defendant denies paragraph 14 of the statement of claim and state
that the claim for account in this suit is wrongful as the plaintiff's
Commissioner of Finance is a member of the Federation Account Allocation
Committee, which was established pursuant to
Section 5(1) of the Allocation of
Revenue Account, etc. Act, Cap.
16, L.F.N. 1990.
By virtue of Section 2 of the revenue
Allocation and Fiscal Commission Act, Cap.392, LFN, 1990, the plaintiff
is also represented in the composition of the Revenue Mobilisation
Allocation and Fiscal Commission and there is no allegation that the said
Commission failed or refused to supply to the plaintiff the Statement of
Federation Account on request.
12.
In response to paragraph 15 of the statement of claim, the defendant
shall contend at the hearing of this suit:
(a)
that pursuant to
Section 162(9) of the 1999
Constitution, any amount standing to the credit of the judiciary in the
Federation Account shall be paid directly to the National Judicial Council
for disbursement to the heads of courts established for the Federating
States under Section 6 of the
Constitution.
(b)
That the payment of 1 % of the proceeds from the Federation Account
to the Federal Capital is lawful by virtue of the provisions of
Allocation of Revenue (Federation
Account, etc.) Act, Cap. 16,
L.F.N. 1990. The said 1%
deduction is accordingly not unconstitutional by virtue of
Sections 313 and 315(4) (b) of the
1999 Constitution.
(c)
That Section 162(5) of the
1999 Constitution provides that the amount standing to the credit of
Local Government Councils in the Federation Account shall also be allocated
to the States for the benefits of their Local Government Councils on such
terms and in such manner as may be prescribed by the National Assembly.
13.
Whereof the defendant prays the court to hold that:
(a)
Until the relevant Act of the National Assembly for the distribution
from the Federation Account comes into force, any claim for shares of the
Federation Account under Section 162
of the 1999 Constitution as being claimed by the plaintiff in this suit
is incompetent before this Honourable Court.
(b)
Until the said Act of the National Assembly comes into force,
deduction for priority projects, 1st line charges, service for
external debts, 1% deduction for the service of the Federal Capital
Territory, etc. under the existing distribution system put in place pursuant
to the existing laws continue to be in force constitutionally by virtue of
Sections 313, 314 and 315(4) (b) of
the Constitution of the Federal Republic of Nigeria, 1999."
After pleadings were delivered
by the plaintiffs to these consolidated suits namely,
Ogun, Lagos, Oyo, Ondo and
Osun States, each of them went ahead to file and
exchange briefs and some other affidavit evidence verifying their cases with
the defendant. I wish first of all to consider the case of the
Attorney-General of
I shall hereafter consider the
cases of Ogun, Oyo, Ondo,
and
‘The issues for determination
especially turn on questions whether or not the provisions of Section
162, in particular and other relevant provisions of Constitution of the
Federal Republic of Nigeria, have been breached in the circumstances by
defendant and whether the plaintiff is not entitled to the reliefs sought in
the event of such breach or violation being established.’
On 16th September,
2002, when the hearing of this case took place, Honourable Attorney-General
of
Secondly, it was submitted
that the provisions of any law of the National Assembly, which require that
the distribution of the amount in the Federation Account be made among any
parties other than the Federal Government, State Government and Local
Government Councils, will be inconsistent with
Section 162(3) and are therefore
invalid, null and void.
Thirdly, that to include other
parties in the distribution of the said amount will effectively deprive the
plaintiff of its appropriate share in the amount in the Federation Account.
Fourthly, it is contended,
that in its Statement of defence the defendant admittedly made as a first
line charge on the Federation Account, which the plaintiff complains about
in paragraphs 6, 9,10 and 11 of its statement of claim, are consistent with
the provisions of the Allocation of Revenue (Federation Account, etc) Act,
Cap. 16, Laws of the Federal Republic of Nigeria, 1990 as amended by The
Revenue Act and the 1999 Constitution and that the action of the Federal
Government and its agents in the circumstance, is not illegal or
unconstitutional. The learned Attorney-General from the foregoing, first
argued that the Revenue Act makes
no provisions for deducting any sums as a first line charge or on the
Federation Account. Indeed, he contended, the relevant provisions of
the Act. i.e. Section 1 provides as follows:
"The amount standing to the
credit of the Federation Account as specified in
subsection (1) of Section 149 of the
Constitution of the Federal Republic of Nigeria shall be distributed by
the Federal Government among the various governments in Nigeria and the
funds concerned on the following basis, that is to say:"
Consequently, the learned
Attorney-General argued, such deduction do not, in the first place, have any
basis or support in any Act of the
National Assembly and is illegal. Secondly, the 1999 Constitution
itself does not provide for any deduction as a first line charge on the
Federation Account while the act of deduction, he argued, is inconsistent
with the provision of the Constitution.
Indeed, he contended Section
163(3) of the Constitution stipulates how the amount in the Federation
Account shall be distributed. This, he pointed out, demonstrated how
unilateral the Federal Government of Nigeria was. The Constitution he
argued, expressly mentioned those to have a share in the money in the
Federation Account. The word "shall" used by the section, it is contended,
makes it mandatory that the money be distributed amongst the parties
mentioned only. The defendant, it is further submitted, purportedly relied
on Sections 313, 314 and 315(4) of
the Constitution to contend that:
"Until the Act of the National
Assembly comes into force deductions or disbursements from the Federation
Account under the existing distribution system put in place pursuant to the
existing laws continue to be in force constitutionally ......." See
paragraph 8 of the statement of defence).
Section 313 of the
Constitution of the
"Pending any Act of the
National Assembly for the provision of a system of Revenue allocation
between the Federation and the States, among the States, between the States
and Local Government Councils in the States, the system of revenue
allocation in existence for the financial year beginning from 1st
January, 1998 and ending on 31st December, 1998 shall, subject to
the provisions of this Constitution and as from the date when this Section
comes into force, continue to apply:
Provided that where functions
have been transferred under this Constitution from the Government of the
Federation to the States and from the States to the Local Government
Councils the appropriations in respect of such functions shall also be
transferred to the States and the Local Government Councils, as the case may
require."
Clearly therefore, it is
further argued, the application with effect from 29th May, 1999
of the system of revenue allocation in existence between 1st
January, 1998 and 31st December, 1998 under the Constitution, is
subject to the
provisions of the 1999 Constitution. The case of
Labiyi v. Anretiola (1992) 8 NWLR
(Pt. 258) 139 at 164 A - B wherein this Court (per
Karibi-Whyte, JSC) stated the true meaning of the expression "subject
to" to be as follows:
"In other words, where the
expression is used at the
commencement of a statute as in section 1(2) of Decree No 1 of 1984,
it implies that what this subsection is 'subject to' shall govern, control
and prevail over what follows in that section or subsection of the
enactment. See also Tukur v.
Government of Gongola State (1989) 4 NWLR
(Pt. 117) 517 at 529" which was called in aid.
It is next submitted that the
existing Law under which the system of revenue allocation was put in force
and effect, as rightly contended by the defendants in paragraph 8 of their
defence, is the Allocation of Revenue
(Federation Account, etc Act) Cap. 16, Laws of the
After we were referred to the
dictum of Ejiwunmi, JSC in the latter case
reference was also made to the Uwaifo
v. Attorney-General of Bendel State (1982) 7
SC 124 where Idigbe, JSC succinctly stated the
law thus:
"It is important to note that
the preclusion or prohibition is limited and confined to existing laws. It
therefore becomes abundantly clear that if such laws or any of their
provisions are inconsistent as from 1st October, 1979 with 1979
Constitution, such laws or any of their provisions whether or not
pronounced upon by the Courts as being inconsistent with the said
Constitution, are impliedly repealed or modified to conform to its
provisions. Likewise, all things done or purported to be done under such
impliedly repealed or modified laws after 1st October, 1979, are equally of
no effect...." (Italics mine for emphasis).
Section 274 of the 1979
Constitution which
was the subject of interpretation in Ikine
and
Uwaifo cases (supra), it was argued, is
in pari materia
with Section 315 of the present 1999
Constitution upon which the defendant relies, adding that the same
construction and interpretation must a fortiori be given to
Section 315 of the Constitution.
The case of Okon &
Ors. v. The State (1988) NWLR (Pat.69) 172 (1988) 1 NSCC
156 at 161 was called in aid thereof. Nnaemeka-Agu,
JSC stating the laws on the subject in that case, it is pointed out, held as
follows:
"With respect, I think that
the principle on which a previous legislation has been relevant to the
interpretation of a later statute is fairly well settled. A previous
legislation may be relevant to the interpretation of a later legislation in
two ways:
"First, the course which
legislation on a particular point has followed often provides an indication
as to how the present statute should be interpreted. It is in such cases
presumed that the interpretation in the former must have been known to those
who drafted the later. Hence in the case of Armah
v. Government of Ghana (1968) A.C. 192 it was applied by the House of
Lords, per Reid at page 226 et seq. See also Minister of Housing
and Local Government v. Hartneil (1965) A.C.
1134. I believe that the commonsense dictates that courts should as far as
possible encourage uniformity of meaning of particular words or expressions
unless it appears from the wordings of a particular statute under
construction that the legislator intended to vary the meaning.
Secondly, it is accepted that
the light may be thrown on the meaning of a phrase or word in a statute
under construction by reference to a similar phrase or word in an earlier
statute dealing with the same or cognate subject matter.
See Registrar of Restrictive Trading Agreements v. W. H. Smith & Sons
Ltd. (1968) 1 WLR 1541."
It is therefore submitted that
all actions of the defendant pursuant to the said provisions are
unconstitutional, null and void and of no effect whatsoever.
Moreover, it is contended,
under Section 315(3) of the
Constitution, the Supreme Court as any other court is constitutionally
empowered to declare those provisions invalid as being
inconsistent with provisions of the Constitution.
The learned Attorney-General
submitted that consequently, the distribution made from the Federation
Account pursuant to the said provisions of the Revenue Act or at all are
therefore unconstitutional, null and void and we are respectfully invited to
so hold.
Relief IV
In respect of this relief, the
learned Attorney-General submitted that
Section 81(3) of the Constitution of
the Federal Republic of Nigeria provides as follows:
"Any amount standing to the
credit of the judiciary in the Consolidated Revenue Fund of the Federation
shall be paid directly to the National Judiciary Council for disbursement to
the heads of the courts established for the Federation and the States under
Section 6 of the Constitution."
The learned Attorney-General
next submitted how the Consolidated Revenue Fund (CRF) itself is constituted
under Section 80(1) which
requires that all revenue received by the Federation i.e. the Federal
Government of Nigeria (except such moneys as are payable under the
Constitution or any valid Act of the National Assembly into any other public
fund) shall be paid into and from one consolidated fund for the Federation.
He further submitted that it is where the expenditure for the judiciary has
been authorised by law under Section
80(2) of the Constitution as charged upon the Consolidated Revenue
Fund that the authorized amount can be said to be standing to the credit
of the judiciary in the Consolidated Revenue Fund of the Federation under
Section 81(3) of the Constitution.
That amount, he pointed out, is then required to be paid directly to the
National Judicial Council for disbursement to the heads of the courts for
payment of salaries of judicial officers and other requisite payments to
maintain the Judiciary.
It is further submitted that
this will in the light of Section
162(1) (10) of the Constitution, which defines the Revenue to be paid
into the Federation Account, be limited to:
(a)
Those exempted under Section
162(2);
(b)
All those moneys due to the Federation (i.e.) the Federal Government
of Nigeria under Section 162(3) of
the Constitution.
As regards the provisions of
Section 162(9) of the Constitution,
the learned Attorney submitted that although that Section stipulates that
"any amount standing to the credit of the Federation Account shall be paid
directly to the National Judicial Council..." in so far as the Judiciary is
not a beneficiary of the Federation Account and
Section 81(3) has already dealt
with the subject-matter it is difficult to give any sensible meaning to that
provision. We were urged therefore to discountenance it. The case of the
Board of Customs and Excise v. Barau (1982)
10 SC 98 at page 190 per Idigbe, JSC quoting
with approval and adopting Maxwell on
Interpretation of Statutes 11th Edition, page 228 that:
"Notwithstanding the general
rule that effect must be given to a word or phrase or if it would defeat the
real object of the enactment, it may or rather it should be eliminated. The
words of a statute must be construed so as to give a sensible meaning to
them if possible."
For this reason, it is
submitted that it is clearly not permissible and indeed unconstitutional to
deduct and pay any money or fund to the National Judicial Council directly
from the Federation Account for the payment of salaries of judicial officers
as the defendant presently admittedly does.
It is therefore the
plaintiff's submission that a careful and painstaking reading and
construction of sections 80, 81(3)
and 162 of the Constitution will show that the payment of salaries of
judicial officers which is effected through the National Judicial Council is
not a charge on the Federation Account. Indeed, it is further asserted, it
can only be a charge on the Consolidated Revenue Fund of Federal Government
of Nigeria within the meaning and intendment of the aforesaid provisions.
Reliefs (V) and (VI)
Section 162(1)
it is contended, provides that the Federal Government shall pay into the
Federation Account all revenues collected by it. What constitutes
"Revenue" is defined in
Section 162(1) as meaning:
"Any income or return accruing
to or derived by Government of the Federation from any source includes:
(a)
any receipt, however described, arising
from i operation of any law;
(b)
any return, however described arising from
respect of any property held by the Government of the Federation;
(c)
any return by way of interest on loans
dividends in respect of shares or interest held by the Government of the
Federation in any company or statutory body."
Proceeds from Stamp Duties and
Capital Gains Tax, it is further maintained, arise from the operation of
Stamp Duties Act, Cap. 411 and
Capital Gains Tax Act, Cap. 42 and therefore come within
Section 162(10) (a) (ibid).
Income accruing to or derived by the Federal Government from any other
source, it is asserted, is covered by
Section 162(10) and 162(10) (c). None of the above proceeds, it is
further maintained, falls under the exceptions in
section 162(1) It follows
therefore, it is argued, that Federal Government is obliged to pay such
proceeds into the Federation Account.
Section 162(1), it is stressed, uses the word "shall" thereby making it
mandatory to have such proceeds paid into the Federation Account. Failure to
lodge the proceeds as required, it is maintained, is in conflict with the
provisions of section 162(1) of
Constitution and is therefore unconstitutional. This must be so, it is
stressed, because notwithstanding
Section 163(b) which provides that where an Act of the National Assembly
imposes Capital Gains Tax or Stamp Duty, the net proceeds of such tax or
duties shall be distributed among the States on the basis of derivation; and
that accordingly; where such tax or duty is collected by the Government of
the Federation or other authority of the Federation, there shall be paid to
such States at such times as the National Assembly may prescribe a sum equal
to the proportion of the net proceeds of such tax or duty that are derived
from that State. Although Section
163(b) provides for the allocation of capital gains tax and stamp duties
by the Federal Government, it is argued, does not provide how the proceeds
are kept pending their distribution. It is therefore submitted that the same
constitutes revenue collected by the Federal Government, which must be paid
into the Federation Account within the proper meaning and intendment of
Section 162(1) and (10) of the
Constitution. Section 162(3),
it is added, provides that the money in the Federation Account shall be
distributed to the Federal and State Governments and the Local Government
Councils in such State "on such terms and in such manner as may be
prescribed by the National Assembly."
It is the submission of
learned Attorney-General in addition, that the effect of these provisions
properly interpreted and construed, is that when such proceeds are paid into
the Federation Account, the amount accruing to the Federation Account Shall
be distributed "on such terms as may be prescribed by the National Assembly.
The effect of all these provisions properly interpreted and construed, it is
emphasised, is that when such proceeds are paid into the Federation Account,
the amount accruing to the Federation Account directly from such proceeds,
must be reflected in the allocation formula to be prescribed by the National
Assembly in the same way as the amount accruing directly from natural
resources are to be reflected and taken into account to the benefit of the
States producing the natural resources.
In his oral submission, the
learned Attorney-General urged that all moneys paid into Federal Government
coffers called Federation Account since June, 1999 and any amount standing
to the credit of the Federation Account shall be distributed among the
Federal; State Governments as well as the Local Government Councils in each
State on such terms and in manner as may be prescribed by the National
Assembly vide Section 162(3) of the
Constitution. Further, any amount standing to the credit of the States
in the Federation Account, shall be distributed among the States on such
terms; such manner as may be prescribed by the National Assembly
Section 162(4) of the Constitution.
That the amount standing to the credit of Local Government Councils in the
Federation Account shall also be allocated to the States for the benefit of
their Government Councils on such terms and such manner as may prescribed by
the National Assembly vide Section
162(5) of the Constitution. Thus, while not conceding all of claim (5),
we are i to allow the plaintiffs' action to succeed.
Reliefs (VII) and (VIII)
Section 162(2) of the 1999
Constitution
provides that each State
shall maintain a special account to be called "State Joint Government
Account" into which shall be paid all allocations to the Local Government
Councils of the State from the Federation Ac and from the Government of the
State. It is not in dispute that the defendant maintains such an account.
This Act is supplemented by:
(i)
Revenue Act of 1982 (Cap. 16 as amended).
(ii)
The Revenue Mobilisation, Allocation and Fiscal Commission Act, No.98
of 1993.
The two Acts above are still
in force as duly upheld by Section
313 of the 1999 Constitution which provides that:
"Pending any Act of the
National Assembly for provision of a system of revenue allocation between
the Federation and the States and Local Government Councils and among the
Local Government Councils in the States, the system of revenue allocation in
existence for the financial year beginning from 1st January, 1998
shall, subject to the provisions of this Constitution and as from the date
when this Section comes into force continue to apply."
Section 5(2) of Act No.
106 of 1992
provides that each State should pay into its State Joint Local Government
Account 10% of its internally generated revenue to be distributed among the
Local Government Councils in the State on such terms and in such manners as
the State House of Assembly may prescribe.
The defendant's defence for
paying the money directly or in any other manner to the Local Government
Councils is that the National Assembly has not made any new prescription as
to the allocation and distribution of the amount standing to the credit of
the Federation Account, and therefore the existing distribution system
should continue in the interim under the existing law. This, in my opinion,
cannot be faulted in view of this court's decision in Attorney-General,
Federation v. Attorney-General, Abia & 35 (No.2)
(supra). See per Uwais, CJN at page 760.
Section l(c) of Act No.
16 (supra), it is contended, provides that the Local Government
Council shall be allocated and is entitled to 10% of any amount in the
Federation Account.
Section 3 of the Act (ibid),
it is pointed out, provides that:
"3.
For the allocation from the Federation Account among the Local
Government the same factors and weights as those used for sharing revenue
from the Federation Account among the States shall apply."
The learned Attorney-General
thereafter argued that neither Section 1 (a) nor 3 of the Act nor any other
provisions of the Act can be interpreted to mean that the Federal Government
is empowered to distribute as it presently does the amount standing
to the credit of the Local Government Councils. Indeed, it is argued,
Section 3 talks about
allocation not distribution. There is a clear distinction between them,
adding that they are not interchangeable since allocation is made before
distribution. That exercise of jurisdiction, it is further stated, is
clearly the prerogative of the States as prescribed by the law of the State
House of Assembly in accordance with
Sections 162(8) of the Constitution. Section 3 properly construed, it is
argued, deals only with the manner of allocation of the amount standing to
the credit of the Local Government Councils in the Federation Account
amongst the Local Government Councils. However, the use of the expression,
"amongst the Local Government Councils in
Section 3 of the Revenue Act, it
is maintained, appears to suggest that the Federal Government is empowered
to make the allocation directly in favour of the Local Government Councils.
It is therefore submitted that the provisions of Section 3 in so far as it
purports to regulate the allocation of any amount standing to the credit of
the Local Governments in the Federation Account directly to the Local
Government Councils is inconsistent with
Section 162(5) of the Constitution
and it is void and unconstitutional. The National Assembly, it then
contended, cannot validly make a law permitting direct allocation to the
Local Government Councils, adding that such money must be allocated direct
to the States, which shall in turn pay the same into the "State Joint Local
Government Account" vide Section 162(6). Moreover, it is argued,
Section 6(1) of Act No. of
1982, which provides for the establishment of a Joint Local Government
Account Allocation Committee (JLGAAC for short) for each State, is clearly
inconsistent with Section 162(8) of
the Constitution in so far as it seeks to regulate the manner the amount
allocated to the State for the benefit of the Local Governments i that State
is to be distributed. I cannot agree more.
Relief IX
On Stabilisation Account, it
is submitted that there is clearly no constitutional warrant for creation of
such Account as a charge on the Federation Account. This is because whatever
Account the Federal Government wishes to keep, plaintiff argued, can only
lawfully operated with funds emanating from her own share of the amount in
the Federation Account subsequent to the distribution among the 3 tiers of
government. To do otherwise as is presently being done, it is argued, is
contrary to Section 162(3)
Constitution. Clearly, as has been argued, the provisions of the Law
i.e. Revenue Act, (Cap. 16) (ibid) supporting the creation and Maintenance
of a Stabilisation Account, is unconstitutional, again, this argument is
flawless and is incontrovertible.
Relief (X)
After the learned
Attorney-General had observed that it is not disputed that the Federal
Government makes deductions from the Federation Account to service her
foreign/external debts, the c he pointed out, is that such debts were
charged on the Federation Account between 28th May, 1999 and
would continue to be 36 charged by virtue of
Section 314 of the Constitution.
Section 314 (ibid), it is maintained, provides that any debt of the
Federation or of a State which immediately before the date when the Section
comes into force was charged on the revenue and assets of the Federation
or a State, shall as from the date when the Section comes into force,
continue to be so charged, it is maintained.
The money in the Federation
Account, it is submitted, belongs to the three tiers of Government and
cannot be properly described as the money of the federal Government. The
Federal Government Revenue, it is therefore contended, is her share out of
the Federation Account from which she is obliged to pay her debts. There can
be no basis, it is argued, for saddling the other tiers of government with
the responsibility for sharing in the payment of the debts incurred by the
Federal Government and Section 314
cannot be so interpreted. It follows, it is finally submitted, that the
charging of the Federal Government debts on the Federation Account as
opposed to the Federal Government Revenue, is in conflict with
Section 162(3) and (9) of the
Constitution and is unconstitutional. The argument herein cannot, in my
opinion, be faulted also.
Relief (XI)
The clear postulation of
Section 163(3) of the Constitution,
argued the plaintiff is that any amount in the Federation Account shall be
distributed among the Federal, State and Local Governments on such terms and
in such manner as may be prescribed by the National Assembly. Such amount it
is pointed out cannot properly or constitutionally be distributed in favour
of any other party or fund. It will clearly be unconstitutional, it is
asserted, for the National Assembly to make any provisions for any
distribution of any amount in the Federation Account in favour of any other
party or fund. It will, it is observed constitute
a deprivation of the right of the plaintiffs to their appropriate share in
the Federation Account. The defence put forward by the defendant in its
statement of defence that the deductions made as a first line charge on the
Federation Account which the plaintiff complains about in paragraphs 6,9,10
and 11 of its statement of claim, it is maintained, is consistent with the
Provisions of the Allocation of
Revenue (Federation Account, etc) Act, Cap. 16, Laws of the Federal Republic
of Nigeria, 1990, as amended and the 1999 Constitution and that the
action of the Federal Government and its agents in the circumstance is
neither illegal and unconstitutional., Consequently, the learned
Attorney-General submitted, Section
l(d) (i - v) of Act No. 16 of 1990 as amended, which is an
existing law under Section 315 of the
1999 Constitution, is inconsistent with Section 162(3) of the
Constitution in so far as it makes provision for distribution of money in
the Federation Account amongst those bodies/institutions not cognisable by
that Section.
Relief (XII)
Under this relief the
submission is that there is no warrant for the National Assembly to make any
provisions for the creation or maintenance of a State Joint Local Government
Account (SJLGA). The responsibility, it is contended, is clearly that of the
State House of Assembly under Section
4(7) of the Constitution, being a matter in respect of which the
Constitution has impliedly, if not expressly empowered the State to make
laws. The point, it is stressed, is clearly re-enforced by the provisions of
section 162(8) of the Constitution
which states:
"the
amount standing to the credit of Local Government Councils of a State shall
be distributed among the Local Government Councils of that State on such
terms and in such manner as may be prescribed by the House of Assembly of
the State."
The plaintiff therefore
submitted that it is clear that
sections 3 and 6(1), (2) and (3) of the Revenue Act are inconsistent
with sections 162(5), (6) and (8) of
the Constitution and is to that extent, invalid, null and void. As I
shall seek to show hereafter there is merit in this argument.
Reliefs (XIII) and (XIV)
The plaintiff, it is
submitted, is asking for an account while the defence is that there is no
allegation that the plaintiff ever requested for a Statement of Federation
Account and it was refused. The issue as contended on plaintiff's behalf is
not a statement of Federation Account but a full account of how the money in
the Federation Account which ought to have been paid into the Federation
Account is being utilized or applied or disbursed. This, as can be seen,;
is quite different from an ordinary statement of account, it is argue Should
this court hold that the plaintiff is entitled to a share in Federation
Account and has established that the account has not been constitutionally
managed by the defendant then, it will be entitled to an account and the
money properly standing to its credit. When claim XIV was being argued, it
was abandoned. There the matter ended and rightly so.
Reliefs (XV), (XVI), (XVIII) and (XIX)
The plaintiff finally submits
that the injunctive reliefs sought necessarily follow from the declaration
sought in this suit. Thus, once the court is satisfied that the plaintiff is
entitled to the declarations sought, it must follow that he will be entitled
as of right to the injunctions sought. The plaintiff in conclusion urged us
to grant all the reliefs sought because of the reasons articulated herein.
The argument proffered here, to my mind, is non-sequitur.
I will now consider the
reliefs (Claims) made out in the respective plaintiffs' amended statements
of claim/statements of claim and/or briefs vis-a-vis
the defence to see whether or not they deserve to be sustained or
refused in the light of the reliefs (claims) earlier considered in the case
decided by this court and now reported as Attorney-General, Federation v.
Attorney-General, Abia State & 35 Ors.
(No.2) (2002) 6
NWLR (Part 764) 542. In this wise, I wish to commence with
Lagos State again but, this time from its penultimate paragraph 18 of the
amended statement of claim, which after due consideration I have arrived at
the irresistible conclusion that of the nineteen claims (reliefs) therein,
the following need to be examined and answers proffered thereon by me to
wit: Claims 5, 7, 12, 14, 15 and 18 respectively. This claim avers as
follows:
"A declaration that the
Federal Government is mandatorily obliged by the combined effect of
Section 162(i) and (iv) of the
Constitution of the Federal Republic of Nigeria, 1999 to pay into the
Federation Account all the proceeds and income, save those exempted under
Section 162(1), accruing from the
privatisation of government enterprises, from stamp duties, capital gains
tax and other income accruing to or derived by the Federal Government from
any other source." (Italics is mine for comment
later on).
"Revenue" is defined in
Section 162(10) of the 1999
Constitution as follows:
"For purposes of sub-section
(1) of this Section "revenue" means any income or return accruing to or
derived by the Government of the Federation from any source and includes:
(a)
any receipt, however described, arising
from the operation of any law;
(b)
any return, however described arising from
or in respect of any property held by the Government of the Federation;
(c)
any return by way of interest on loans and
dividends in respect of shares or interest held by the Government of the
Federation in any company or statutory body."
Section 163 of the 1999
Constitution takes
care of what the plaintiff here is asking for. That Section (163 (ibid))
stipulates:
"Where under an Act of the
National Assembly, tax or duty is imposed in respect of any of the matters
specified in item of part II of the Second Schedule to this Constitution,
the net proceeds of such tax or duty shall be distributed among the States
on the basis of derivation and accordingly:
(a)
where such tax or duty is collected by the
Government of the State, the net proceed shall be treated as part of the
Consolidated Revenue Fund of that State;
(b)
where such tax or duty is collected by the Government of the
Federation or other author of the Federation, there shall be paid to each
State at such times as the National Assembly may prescribe a sum equal to
the proportion of the net proceeds of such tax or duty that are derived from
that State."
Accordingly, claim 5 cannot be
granted for two reasons:
(i)
There is no section like Section 162(i)
and 162(iv) rather Section 162(1) and 162(4) respectively of 1999
Constitution.
(ii)
The National Assembly is yet to pass a law (an Act of the National
Assembly) pending which the provisions of
Section 313 of the Constitution
will have sway.
Claim 7
Under claim 7 the plaintiff
asks for:
"A declaration that the
defendant is not entitled within the proper meaning of
Section 162(5), (6) and (8) the
Constitution of the Federal Republic
of Nigeria 1999 to pay the amount standing to the credit of the Local
Government Councils in the federation Account directly to the Local
Government Councils and that such payments by the
defendant is
illegal and
Unconstitutional."
The claim being straight
forward, factual and unequivocal should, in my opinion be granted.
Accordingly, I hereby grant it.
Claim 12
Under this claim the plaintiff
pleaded thus:
"A declaration that
Section 3, Section 6(1), (2) and (3)
of the Allocation of Revenue (Federation Account, etc.)
Act, Cap. 16, Laws of the
As
Section 162(5), (6) and (8) of the
Constitution apply, there is an inconsistency. That
being so, the relief is allowable and I accordingly grant it.
Claim 14
This claim is covered by an
averment for:
"An order directing the
Federal Government of Nigeria to pay the plaintiff all sums properly found
due and unpaid to the plaintiff in respect of its share from the Federation
Account on the proper and lawful distribution amongst the States of the
appropriate and true amount standing to the credit of States in the
Federation Account on the taking of such account."
This claim was abandoned
during argument in court. Accordingly, I strike it out and it is struck out.
Claim 15
In this claim the plaintiff
pleaded for:
"An order of injunction
"restraining all officers, servants and functionaries of the Government of
the Federal Republic of Nigeria or any other public officers whomsoever and
howsoever from keeping and/or maintaining or sustaining any other Account
save the Federation Account for the purpose of receiving all revenue as
defined by Section, 162(10) of the
Constitution collected by the Government of the Federation."
As this claim is not founded
on any of the declarations sought; also as there are no facts or materials
in support thereof in the light of the grant of claims 7 and 12, this claim
must be and is accordingly refused.
Claim 18
This claim asking for some
injunctive reliefs having been abandoned is accordingly struck out.
The plaintiff here commenced
this action (along with the others whose cases were consolidated in this
suit) against the defendant by a writ of summons and a statement of claim
both dated 21st May, 2001. Standing out glaringly for our
consideration are claims (iv), (xi), (x), (xii)
and (xiv).
Claim (iv)
The claim here as couched
reads:
"A
declaration that it is illegal and unconstitutional for the defendant to
deduct funds due to the Local Government Councils in
Ogun Sate from the Federation Account and pay same directly to the
Local Government councils rather than into the State Joint Local
Government Account."
Comment:
As this claim is well grounded
with firm roots, it is accordingly granted as in the case of
Claim (xi)
The declaration sought states:
"A declaration that it is
unconstitutional and illegal for the defendant to withhold proceeds from
privatisation of Federal Government Agencies, Stamp Duties, Capital Gains
Tax and all other income accruing to or derived by the Government of the
Federation from any other source."
Comment:
As no Act of the National
Assembly has yet been passed take care of this claim, it is my view that it
must be refused. It is accordingly refused by me.
Claim (Ix)
Under this claim the plaintiff
asks for:
"A declaration that it is
illegal and unconstitutional for the defendant to maintain and keep any
other account for the purpose of receiving revenue collected by the
Federation other than as prescribed by
Section 162(1) of the Constitution."
Comment:
As this claim is clearly
against the provisions of Section 163
of the Constitution it cannot certainly be granted.
Claim (xii)
Under this claim the plaintiff
asks for:
"An order of perpetual
injunction restraining the defendant by itself, agents, officers or privies
from repeating or further committing such or similar unconstitutional acts
in violation of any of the provisions of
Section 162 of the Constitution."
Comment:
This order as sought is, in my
opinion, vague, too wide and cannot be granted It
is therefore accordingly refused.
Claim (xiv)
The claim as made out here is
for:
"A further order compelling
the defendant to pay to the plaintiff its legitimate and correct share of
the Federation Account less all monies already paid to the plaintiff from
the said account, within the period 29th May, 1999 till the date
of judgment in this suit."
Comment:
The order sought here is
glaringly vague and cannot, with due respect, be made. An order should not
be made in vacuo.
See
J.S. Olawoyin v. Attorney-General,
Northern Region (1961) 2 SCNLR 5 (1961) 1 All NLR (Pt. 2) 269 at
271,276. It is therefore accordingly refused.
Invoking the original
jurisdiction of the Supreme Court under
Section 232(1) of the Constitution of
the Federal Republic of Nigeria, 1999 the plaintiff commenced this
action by a writ of summons dated 8th day of August, 2001 under
the hand of the Honourable Attorney-General of Oyo State, Mr. A.A.
Lawal.
On 24th October,
2001 an affidavit of 26 paragraphs was filed in support of the plaintiff's
claim. The plaintiff, in addition filed in support of his claim a brief of
argument dated 5th February, 2002 and filed on 8th
February, 2002.
Furthermore, plaintiff submitted and attached as document called
Wrongful Deductions from Federation Account June 1999 - July 2001
(marked exhibit 'A'); otherwise called FGN Creditors amounting to
Billions of Naira.
Claims
In plaintiff's penultimate
paragraph 17, five reliefs claimed therein, need be considered here namely,
reliefs 2, 3, 4, 5 and 10.
Claim 2
As this claim wherein the
plaintiff asks for a declaration that it is illegal and unconstitutional for
the defendant to maintain or keep any other account apart from the
Federation Account etc was abandoned, it is accordingly struck out.
Claims 3
As under this claim it is
argued that it is unconstitutional and illegal for the defendant to deduct
funds from the Federation Account and pay same over to Local Government
Councils etc and moreover, since I had granted to some of the other
plaintiffs a similar relief in this Consolidated Suit, the present claim
succeeds.
Comment
The claim is accordingly
granted.
Claims 4 and 5
As these claims were
abandoned, they are accordingly struck out.
See the case of
Attorney-General, Federation v. Attorney-General, Abia
& 35 Ors. (supra).
Claim 10
I will not grant this claim in
as much as it is similar to claim 5 of the
Of the fifteen reliefs sought
by the plaintiff, Chief Dele Ogedengbe, Hon.
Attorney-General for
Claim (iv)
Under this claim the plaintiff
is asking for:
"A
declaration that it is illegal and unconstitutional for the Defendant to
deduct funds due to the Local Government Councils in
Comment
I am of the opinion that this
claim is in order and ought therefore to be granted as in the case of
Claim (xi)
For this head of claim, the
plaintiff asks for:
"A declaration that it is
illegal and unconstitutional for the defendant to maintain and keep any
other account for the purpose of receiving revenue collected by the
Federation other than as prescribed by
Section 162(1) of the Constitution."
Comment
I am of the view that this
claim ought not to be granted. This is because it overlooks other provisions
of Section 162(1) of the Constitution
which, for purposes of emphasis, provides thus:
"162(1)
The Federation shall maintain a special account to be called "the
Federation Account" into which shall be paid all revenues collected by the
Government of the Federation, except the proceeds from the personal income
tax of the personnel of the armed forces of the Federation, the Nigeria
Police Force, the Ministry or department of Government charged with
responsibility for Foreign Affairs and the residents of the Federal Capital
Territory, Abuja."
Further, the claim ignores
Section 163 of the Constitution
which provides:
"Where under an Act of the
National Assembly, tax or duty is imposed in respect of any of the matters
specified in item D of Part II of the Second Schedule to this Constitution,
the net proceeds of such tax or duty shall be distributed among the States
on the basis of derivation and accordingly:
(a)
Where such tax on duty is collected by the Government of a State or
other authority of the State, the net proceeds shall be treated as part of
the Consolidated Revenue Fund of that State;
(b)
Where such tax or duty is collected by the Government of the
Federation or other authority of the Federation, there shall be paid to each
State at such times as the National Assembly may prescribe a sum equal to
the proportion of the net proceeds of such tax or duty that are derived from
that State."
Comment
I am of the view that this
claim should not be granted. Accordingly I refuse it.
Claim (xii)
This claim is for an
injunctive relief. It seeks for:
"An order of perpetual
injunction restraining the defendant by itself (sic), agents,
officers, privies from repeating or further committing such or similar
unconstitutional acts in violation of any of the provisions of
Section 162 of the Constitution."
Comment
I am inclined to refuse this
claim which being unspecific and vague, will be impossible to supervise.
Moreover, the amount involved is not specific.
See the case of Attorney-General of the Federation v.
Attorney-General,
Claim (xiii)
This claim asks for:
"An order
directing the defendant to render an account of all the monies received into
and disbursed from the Federation Account from 29th day of May,
1999 till the date of judgment in this suit, and furnish the
plaintiff with copies of the said Statement of Account."
Comment
I am of the view that it being
impossible to supervise; this wide and unmanageable claim ought to be and is
hereby refused by me. See the case of Attorney-General, Federation v.
Attorney-General,
For this Suit wherein the
plaintiff in the penultimate paragraph 10 of his statement of claim asks for
two reliefs worthy of consideration, I will consider them seriatim as
follows:
Claim (iv)
Under claim (iv)
the plaintiff asks for:
"A
declaration that it is illegal and unconstitutional for the defendant to
deduct funds due to the Local Government Councils in
Plaintiff in support of his
statement of claim filed an affidavit of 21 paragraphs and other papers of
Accounts involving millions of Naira said to be owing
by the defendant to him (plaintiff) and denoting statutory distribution by
the Central Bank of
Comment
I am of the opinion here that
this relief is meritorious and ought to be granted. I accordingly grant it
since this claim has been established on the balance of probability. See
Chief Frank Ebba v. Washi
Ogodo & Anor.
(1984) 1 SCNLR 372 at 379 and
Omoregie v. Omigie (1990) 2
NWLR (Pt. 130) 29 at 39.
Claim (x)
Under this claim, the
plaintiff averred:
"A declaration that it is
unconstitutional and illegal for the defendant to withhold proceeds from
privatisation of Federal Government Agencies, Stamp Duties, Capital Gains
Tax and all other income accruing to or derived by the Government of the
Federation from any source."
Comment
I am of the opinion that as
there is no law under Section 162(5)
and (6) that provide for this claim, it must be refused and it is
accordingly refused. See Onobruchere
v. Esegine
(1986) 1 NWLR (Pt. 19) 799.
Conclusion
It is for all I have been
saying above that I arrive at the conclusion that the respective plaintiff's
cases partially succeed. Reliefs 5 and 15 are refused for reasons that, in
regard to relief 5, under Section
163(b) of the Constitution, where tax or duty of the type envisaged in
item D of Part II of the second schedule is collected by the Government of
the Federation or other authority of the Federation, the money ought not to
be paid into the Federation account since once that is done, it will be
subject to the distribution pattern provided in
section 162(3) of the Constitution.
Whereas under section 163(b) the
money is meant to be paid to each State in due course in the proportion of
which it was derived from that State. Therefore such money should be
advisedly kept in an account different from the Federation Account. A
declaration in the manner sought in relief 5 overlooks the fact of
section 163(b) as for relief 15,
it cannot be granted in view of what has been said of relief 5.
In view of the relevant
provisions of the Constitution cited in relief 7 and 12 whose meanings are
clear, the declarations sought therein are hereby granted.
For the 2nd
plaintiff namely, Attorney-General of
1.
"Declaration that the defendant is not entitled within the proper
meaning of Section 162(5), (6) and
(8) of the Constitution of the Federal Republic of Nigeria, 1999 to pay
the amount standing to the credit of the Local Government Councils in the
Federation Account directly to the Local Government Councils and that such
payments by the defendant is illegal and unconstitutional."
2.
“A declaration that Sections
6(1), (2) and (3) of the
Allocation of Revenue (Federation Account) Act Cap. 16, Laws of the Federal
Republic of Nigeria as amended by
Decree 106 of 1976 are inconsistent with
Section 162(5), (6) and (8) of the
Constitution of the Federal Republic
of Nigeria, 1999
and are
invalid, unconstitutional, null and void and of no effect."
For the 1st plaintiff, namely
"(iv)
A declaration that it is illegal and unconstitutional for the
defendant to deduct funds due to the Local Government Councils in
For the 3rd
plaintiff, namely
Finally, the 5th
plaintiff's (
Subject to the above, the rest
of plaintiffs’ respective claims fail and are accordingly refused.
I make no order as to costs.
Each party to bear his own costs.
Judgement
delivered by
Muhammadu
Lawal Uwais,
C.J.N.
The Attorneys-General of
Ogun, Lagos, Oyo, Ondo
and Osun States severally brought action against
the Attorney-General of the Federation. As their claims are identical and in
some respects the same, we decided to consolidate the actions. This was done
on the 24th day of September, 2001.
Most of the claims in this
case were dealt with in an earlier case brought in this court by the
Attorney-General of the Federation against the 36 States of the Federation
the plaintiffs herein inclusive. That case is A.-G.
of the Federation v. A.-G. of
I have had the opportunity of
reading in draft the judgment read by my learned brother
Onu, JSC. I entirely agree with it.
Of significance, are the novel
claims by the 2nd and 3rd
plaintiffs. These are claims Nos. 5 and 10 respectively. Claim
No. 5 by the Attorney-General of
"5.
A declaration that the Federal Government is mandatorily obliged by
the combined effect of section 162
(i) and (iv) (sic) section
162(1) and (4) of the Constitution of the Federal Republic of Nigeria, 1999
to pay into the Federation Account all the proceeds and income, save those
exempted under section 162(i)
(sic 162 (1) accruing
from privatisation of government enterprises, from stamp duties, capital
gains tax and other income accruing to or derived by the Federal Government
from any other source."
And claim No. 10 by the
Attorney-General of
"10.
A declaration that withholding of proceeds from Stamp Duties, Capital
gains tax, Federal Government privatisation programmes and any other income
accruable to or derived by the Government of the Federation from being paid
to the Federation Account is illegal and unconstitutional."
Now by the provisions of
section 162 subsection (1) of the
1999 Constitution –
"162
(1)
The Federation shall maintain special account to be called
"Federation Account" into which shall be paid all revenues collected by the
Government of the Federation, except the proceeds from the personal income
tax of the personnel of the armed forces of the Federation, the Nigeria
Police Force, the Ministry or Department of government charged with
responsibility for Foreign Affairs and the residents of the Federal Capital
Territory, Abuja."
The word "revenue" in this
subsection has been defined by subsection (10) of
section 162 of the Constitution
as follows:
"162
(10)
For the purposes of subsection (1) of this section, "revenue" means any
income or return accruing to or derived by the Government of the Federation
from any source and includes –
(a)
any receipt, however described, arising
from the operation of any law;
(b)
any return, however described, arising
from or in respect of any property held by the Government of the Federation;
(c)
any return by way of interest on loans and
dividends in respect of shares or interest held by the Government of the
Federation in any company or statutory body."
On the other hand,
section 163 of the 1999 Constitution
provides:
"163.
Where under an Act of the National Assembly, tax or duty is imposed
in respect of any of the matters specified in item D of Part II of the
Second Schedule to this Constitution, the net proceeds of such tax or duty
shall be distributed among the States on the basis of derivation and
accordingly –
(a)
Where such tax or duty is collected by the Government of a State or
other authority of the state, the net proceeds shall be treated as part of
the Consolidated Revenue Fund of that State;
(b)
Where such tax or duty is collected by the Government of the
Federation or other authority of the Federation, there shall be paid to each
State at such times as the National Assembly may prescribe a sum equal to
the proportion of the net proceeds of such tax or duty that are derived from
that State."
Item D of Part II of the
Second Schedule to the Constitution consists of paragraphs 7-10 under the
Concurrent Legislative List in the Constitution. (See
Section 4(4) and (5) of the Constitution).
Paragraph 7 thereof provides:-
"7.
In exercise of its powers to impose any tax or duty on –
(a)
capital gains, incomes or profits of
persons other than companies; and
(b)
documents or transactions by way of stamp
duties, the National Assembly may, subject to such conditions as it may
prescribe, provide that the collection of any tax or duty or the
administration of the law imposing it shall be carried out by the Government
of a State or other authority of a State."
It seems to me that the
provisions of section 162 subsections
(1) and (10) of the 1999 Constitution are general in nature while those
of section 163 (b) of the
Constitution, which deal in particular with capital gains tax and stamp
duties, are specific. Therefore, the latter provisions override the former
for generalibus
specialia derogant (i.e. special
things derogate from general things). There are the
Capital Gains Act, Cap. 42 of the
Laws of the Federation of
Therefore, it follows that
there is no basis on which capital gains tax and stamp duties collected by
the Government of the Federation could for the time being be paid to the
States or into the Federation Account as being claimed by the 2nd
and 3rd plaintiffs. It is, in fact, clear by the provisions of
section 163 that capital gains
tax and stamp duties are supposed to be paid, when applicable to the States
from which they are derived and not for the benefit inter alia of all
the States, which will be the case were the tax and duties to be paid into
the Federation Account (see section
162 subsection (3) of the Constitution).
From the foregoing it is clear
that the declarations in question being sought by the 2nd and 3rd
plaintiffs cannot succeed. With regard to privatisation of government
enterprises by the Government of the Federation,
section 20 of the Public Enterprises
(Privatisation and Commercialisation) Decree No. 28 of 1999
provides that the Bureau of Public Enterprises shall establish and maintain
a fund from which shall be defrayed all expenditure incurred by the Bureau.
The fund so established is to be financed by subvention from the Government
of the Federation loan or grant to the Bureau by the Governments of the
Federation or State or Local Government; all subventions, fees and charges
for services rendered by the Bureau including publications, and all other
assets which may from time to time accrue to the Bureau. By
section 21 subsections (2) of the
Decree the Bureau shall cause the net surplus of receipts and payments
made to it in every year to be paid to the Government of the Federation. The
privatisation of public enterprises cannot be dealt with in isolation from
capital gains tax and stamp duties since all constitute a single claim for
declaration by the 2nd and 3rd plaintiffs
respectively. Once the declaration with respect to the latter is untenable
then so also the declaration with regard to the privatisation of government
enterprises because all are lumped together in the declarations being sought
and are not severable.
It is for the aforesaid
reasons and the more detailed reasons contained in the judgment of my
learned brother Onu, JSC that the plaintiffs'
claims do not succeed in part. I grant the claims granted in the said
judgment and also make no order as to costs.
Judgement
delivered by
Salihu
Modibbo Alfa Belgore,
J.S.C.
These suits brought under the
original jurisdiction of the court were consolidated for hearing with their
pleadings as well as briefs of argument which were exchanged 1 the parties.
They were filed before this court gave judgment in t suit,
Attorney-General of the Federation v. Attorney-General of
Abia State and 35 Others (now reported in
(2002) 6 NWLR (Pt. 764) 542, delivered on 5th day of
April, 2002. When these suits were being heard, it is apparent that most of
the issues in them had been decided in the above case by this court. When
this was pointed out to the parties fifteen of the reliefs were abandoned by
"5.
A declaration that the Federal Government is mandatorily obliged by
the combined effect of section 162(i)
and (iv) of the Constitution ... to pay into the Federation Account all
the proceeds and income, save those exempted under section 162(i) accruing
from the privatization of government enterprises, from stamp duties, capital
gains tax and other income accruing to or derived by the Federal Government
from any other source.
"7.
A declaration that the defendant is not entitled within the proper
meaning of section 162 (5), (6) and
(8) of the Constitution of the Federal Republic of Nigeria 1999 to pay
the amount standing to the credit of the Local Government Councils in the
Federation directly to the Local Government Councils and that such payments
by the defendant is illegal and unconstitutional.
"12.
A declaration that Section 3
and 6(i), (2) and (3) of the allocation of Revenue (Federation Account) Act
(Cap.
16) Laws of the Federation of Nigeria, 1990
as amended by Decree 106 of 1992
are inconsistent with Section 162(5),
(6) and (8) of the Constitution of the Federal Republic of Nigeria 1999
and invalid, unconstitutional, null and void and of no effect.
"15.
An order of injunction restraining all officers, servants, and
functionaries of the Government of the Federal Republic of Nigeria or any
other public officer whomsoever and howsoever from keeping and/or
maintaining or sustaining any other Account save the Federation Account for
the purpose of receiving all revenue as defined by
Section 162 (10) of the Constitution
collected by the Government of the Federation."
Under
S.163(b) of the Constitution in
regard to tax or duty envisaged in Part II, Second Schedule, item D is
collected by the Government of the Federation or any other authority of the
Government of the Federation, such money will not go into Federation
Account. This is because if it is paid into Federation Account it will be
subject to distribution formula envisaged in
section 163(3) of the Constitution
i.e. to Federal government, State Governments and Local governments.
The provisions of
s. 163 (b) envisage that such
money should be paid to each state in the proportion of derivation from each
state. Thus such money should not go into Federation Account g but a
different account. This equally applies in respect of declaration sought in
paragraph 15. In view of this, declarations 5 and 15 cannot be granted as it
will clearly conflict with s. 163 (b) of the Constitution. Therefore no
injunction can be granted. There is no problem with reliefs 7 and 12 as they
are clearly in consonance with this court's C decision in Attorney-General
of the Federation v. Attorney-General of Abia
and 35 Others (supra) and are granted.
In
The suit by
Eleven of the fourteen reliefs
sought by
I had discussed in conference
and have read in draft the judgment of my learned brother,
Onu, JSC and I agree with the conclusions. I
make no order as to costs.
Judgement
delivered by
Uthman
Mohammed, J.S.C
I have had a preview of the
judgment of my learned brother, Onu, JSC in
draft in these consolidated suits and I am in entire agreement with the
conclusions expressed in that judgment. He expressed fully and accurately my
own views and I do not find it necessary to repeat what he had adequately
considered. I therefore grant the following claims,
All the rest of the claims
from the respective five plaintiffs have failed and they are dismissed.
I make no order as to costs.
Judgement
delivered by
Anthony
Ikechukwu Iguh,
J.S.C
I have had the privilege of
reading in draft the judgment just delivered by my learned brother,
Onu, JSC and I am in complete agreement with the
conclusions therein reached.
He has considered all the
claims before the court together with the various issues that arise from the
consolidated suits in great detail and I do not think there is any thing
more I can usefully add. It suffices to say that I abide by his decisions in
all the claims in the respective suits. I also endorse all the orders
therein made. I agree that in all the circumstances of these cases, each
party ought to bear his own costs.
Accordingly, there will be no
order as to costs.
Judgement
delivered by
Samson
Odemwingie Uwaifo,
J.S.C
The five suits filed by each
of the plaintiffs were consolidated for hearing and determination. They were
filed and the pleadings as well as briefs of argument exchanged before the
judgment of this court in Attorney-General of the Federation v.
Attorney-General o
In regard to the claim in SC.
189/2001, which my learned brother Onu, JSC
decided to use as a guide, of the 19 reliefs sought 15 were accordingly
abandoned while 4 were considered. Those considered were:
"5.
A declaration that the Federal Government is mandatorily obliged by
the combined effect of section 162
(i) and (iv) [sic: 162 (1)
& (4)] of the Constitution of the Federal Republic of Nigeria, 1999 to
pay into the Federation Account all the proceeds and income, save those
exempted under section 162 (i),
accruing from the privatisation of government enterprises, from stamp
duties, capital gains tax and other income accruing to or derived by the
Federal Government from any other source.
7.
A declaration that the defendant is not entitled within the proper
meaning of section 162(5), (6) & (8)
of the Constitution of the Federal Republic of Nigeria, 1999 to pay the
amount standing to the credit of the Local Government Councils in the
Federation Account directly to the Local Government Councils and that such
payments by the defendant is illegal and unconstitutional.
12.
A declaration that sections 3
and 6(1), (2) and (3) of the Allocation of Revenue (Federation Account) Act,
Cap.
16 Laws of the
15.
An order of injunction restraining all officers, servant and
functionaries of the Government of the Federal Republic of Nigeria or any
other public officer whomsoever and howsoever from keeping and/or
maintaining or sustaining any other Account save the Federation Account for
the purpose of receiving all revenue as defined by
section 162 (10) of the Constitution
collected by the Government of the Federation."
Reliefs 5 and 15 are refused
for reasons that, in regard to relief 5, under
section 163 (b) of the Constitution,
where tax or duty of the type envisaged in item D of Part II of the Second
Schedule is collected by the Government of the Federation or other authority
of the Federation, the money ought not to be paid into the Federation
Account since once that is done, it will be subject to the distribution
pattern provided in section 162(3) of
the Constitution. Whereas under
section 163(b) the money is meant to be paid to each State in due course
in the proportion in which it was derived from that State. Therefore such
money is better kept in an account different from the Federation Account. A
declaration in the manner sought in relief 5 fails to take cognisance of
section 163 (b). As to relief 15,
it cannot be granted in view of what has been said in respect of relief 5.
In view of the relevant
provisions of the Constitution cited in reliefs 7 and 12 whose meanings are
clear, the declarations sought therein are granted.
In suit No.
SC. 137/2001, 15 reliefs were sought. Out of these 11 were abandoned and 4
were pursued as follows:
"(iv)
A declaration that it is illegal and unconstitutional for the
defendant to deduct funds due to the Local Government Councils in
(xi)
A declaration that it is illegal and unconstitutional for the
defendant to maintain and keep any other account for the purpose of
receiving revenue collected by the Federation other than as prescribed by
section 162(1) of the Constitution.
(xii)
An order of perpetual injunction
restraining the defendant by itself, agents, officers or privies from
repeating or further committing such or
similar unconstitutional acts in violation of any of the provisions of
section 162 of the Constitution.
(xiv)
A further order compelling the defendant to pay to the plaintiff its
legitimate and correct share of the Federation Account less all monies
already paid to the plaintiff from the said Account, within the period 29th
May, 1999 till the date of judgment in this suit."
I consider relief (iv)
as the same as relief 7 sought by the Attorney-General of
In suit No.
SC. 253/2001, 15 reliefs were sought. Only reliefs 3 and 10 were pursued
while the rest were abandoned.
Those pursued
read:
"3.
A declaration that it is illegal and unconstitutional for the
defendant to deduct funds from the Federation Account and pay same over to
Local Government Councils instead of State Joint Local Government Account."
I grant this relief for the
reason I have granted relief 7 by Lagos State.
“10.
A declaration that withholding of proceeds from Stamp Duties, Capital
gains tax, Federal Government privatisation programmes and any other income
accruable to or derived by the Government of the Federation from being paid
to the Federation Account is illegal and unconstitutional."
I refuse this relief having
regard to the implication of what I have said in regard to relief 5 by
In suit No.
SC.277/2001, 15 reliefs were stated out of which 11 were abandoned.
Although 4 were argued, it is only relief (iv)
I hereby grant for the same reason I have granted relief 7 by
“(iv)
A declaration that it is illegal and unconstitutional for the
defendant to deduct funds due to the Local Government Councils in
Ondo State from the Federation Account and pay
same directly to the Local Government Councils rather than into the State
Joint Local Government Account."
Relief (xi) which was like
relief 5 by
In suit No.SC.296/2001,
14 reliefs were sought out of which 11 were abandoned. Relief (iv)
which is the same as relief 7 by
I have reached the same
conclusions as my learned brother Onu, JSC,
whose judgment I had the opportunity of reading in advance and with which I
formally say I agree.
I make no order as to costs.
Judgement
delivered by
Akintola
Olufemi Ejiwunmi,
J.S.C
The several suits referred to
above were initiated at the instance of the Attorneys-General of
Ogun,
However, it is manifest that
two claims by the 2nd and 3rd plaintiffs remained to
be considered. The Attorney-General of
"5.
A declaration that the Federal Government is mandatorily obliged by
the combined effect of section 162
(i) and (iv) (sic) section
162 (1) and (4) of the Constitution of the Federal Republic of Nigeria, 1999
to pay into the Federation Account all the proceeds and income, save those
exempted under section 162 (i)
(sic) 162(1) accruing
from privatization of government enterprises, from stamp duties, capital
gains tax and other income accruing to or derived by the Federal Government
from any other source."
The Attorney-General of
"10.
A declaration that withholding of proceeds from Stamp Duties, Capital
Gains Tax, Federal Government privatization programs and any other income
accruable to or derived by the Government of the Federation from being paid
to the Federation Account is illegal and unconstitutional."
Now, in order to determine the
veracity of these two claims, it is necessary to consider whether or not
they fall within the constitutional provisions in our 1999 Constitution. The
appropriate sections of the Constitution that are relevant, are in my view,
sections 162 (1), 162(10), 163; Item
D of Part II of the Second
Schedule (Paragraphs 7-10) under the Concurrent Legislative List.
"162
(1)
The Federation shall maintain a special account to be called "the
Federation Account" into which shall be paid all revenues collected by the
Government of the Federation, except the proceeds from the personal income
tax of the personnel of the armed forces of the Federation, the Nigeria
Police Force, the Ministry or department of government charged with
responsibility for Foreign Affairs and the residents of the Federal Capital
Territory, Abuja."
"162
(10)
For the purposes of subsection (1) of this section, "revenue" means any
income or return accruing to or derived by the Government of the Federation
from any source and includes –
(a)
any receipt, however described, arising
from the operation of any law:
(b)
any return, however described, arising
from or in respect of any property held by the Government of the Federation;
(c)
any return by way of interest on loans and
dividends in respect of shares or interests held by the Government of the
Federation in any company or statutory body."
163.
Where under an Act of the National Assembly, tax duty is imposed in
respect of any of the matters specified in item D of Part II of the Second
Schedule to this Constitution, the net proceeds of such tax or duty shall be
distributed among the States on the basis of derivation and accordingly,
(a)
where such tax or duty is collected by the
Government of a State or other authority of the State, the net proceeds
shall be treated as part of the Consolidated Revenue Fund of that State,
(b)
where such tax or duty is collected by the Government of the
Federation or other authority of the Federation, there shall be paid to each
State such times as the National Assembly may prescribe a sum equal to the
proportion of the net proceeds of such tax or duty that are derived from
that State."
Par. 7
In the exercise of its powers to impose any tax or duty on-
(a)
capital gains, incomes or profits of
persons other than companies; and
(b)
documents or transactions by way of stamp
duties the National Assembly may, subject to such conditions as it may
prescribe, provide that the collection of any such tax or duty or the
administration of the law imposing it shall be carried out by the Government
of; State or other authority of a State."
A careful perusal of the
provisions of section 162 subsection
(1) and (10) of the 1999 Constitution, in my humble view reveal that
those sections of the Constitution appear to be general in nature while
those of section 163 (b) of the
Constitution which deal particularly with Capital Gains Act, are
specific. It is very clear from the reading of the provisions of
section 163(b) that proceed from
the collection of such tax or duty collected by the Government of the
Federation are to be paid at such times as the Nation; Assembly may
prescribe and in the manner that is deemed proper in accordance with the
said section 163 (b).
It is necessary to also advert
to the Capital Gains Act, Cap.
4 of the Laws of the
Federation of
I now would answer briefly the
claim with regard to the privatization of government enterprises by the
Government of the Federation. S.20 of
the Public Enterprises (Privatization and Commercialisation) Decree No.
28 of 1999 provides that the Bureau of Public Enterprises shall
establish and maintain a fund from which shall be defrayed all expenditure
incurred by the Bureau. The fund so established is to be financed by
subvention from the Government of the Federation or State or Local
Government, all subventions, fees and charges for services rendered by the
Bureau including publications, and all other assets, which from time to time
accrue to the Bureau, By section 21
subsection (2) of the Decree, the Bureau shall cause the net surplus of
receipts and payments made to it in every year to be paid to the Government
of the Federation.
In the face of this
legislation, it does not appear that the claim of the plaintiffs can be
upheld. Interestingly, plaintiffs perhaps acting in the belief that the
Federal Government had been the sole beneficiary from the privatization of
public enterprises, capital gains tax and stamp duties, had in this action
joined these various complaints under one claim. Having done so, it became
impossible to sever them in the consideration of the claim. It follows then
that these several complaints must fall together in the circumstances.
For the reasons given above
and the fuller reasons given in the lead judgment of my brother
Onu, JSC, I also make the declaratory reliefs
that were granted in the said lead judgment. And I also make no order as to
costs
Plaintiffs' claims succeed in part.
Counsel
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