(Suit No: Fhc/Abj/Cs/511/2020)
1.0: INTRODUCTION
Nigeria operates a federal system of government based on the principle of democracy. It is a federation with 36 states, 774 local governments, and a federal capital territory also known as the FCT.
This fiscal structure is meant to enhance macroeconomic development and stability. A federation is a collectivism of States fused into one nation with each State maintaining its selected name specially and independent of its constitutional organs.
Ideally, in a federation, each State should be independent of the other and of the Federal Government. The implication of this is that the three tiers of government exist with each tier being constitutionally empowered to carry out activities and functions that will ensure smooth operation of governance and administration. As part of the effort to ensure this smooth operation of governance and administration, the financial capacity of each level of government is important.
Thus, the provision of section 162 of the 1999 constitution allows the creation of a special account to be known as 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.
By section 162 (3) of the constitution, the law provides that:
Any amount standing to the credit of the Federation Account SHALL be distributed among the FEDERAL AND STATE GOVERNMENTS AND THE LOCAL GOVERNMENT COUNCILS in each State on such terms and in such manner as may be prescribed by the National Assembly.
The implication of the above is that all revenues generated by the Government of the Federation shall be deposited into the Federation account and same shall be shared accordingly to the constitutional beneficiaries which in this case includes the Federal, State governments and the Local government councils in each state.
2.0: BRIEF SUMMARY OF FACT
The Legislature in exercising its constitutional duty pursuant to section 4 of the constitution enacted the Nigeria Police Trust Fund (Establishment) Act, 2019. An act to ensure the proper management of the Nigeria Police Force. Section 4 (1)(a) and 4 (1)(b) of this Act permit the direct deduction of funds from the Federation Account. It also permits direct collection of levies from companies operating businesses in Nigeria for the purpose of funding the Nigeria Police Trust Fund. The Federal Government in compliance with the Act subsequently permits direct deduction of 0.5% of the total revenue generated and also 0.005% of the net profit of company operating businesses in Nigeria.
The attorney of General for River State being dissatisfied with this arrangement instituted an action at the Federal High Court, challenging the constitutionality of the act of Federal Government and its agency and also the legality of section 4 (1)(a) and 4 (1)(b) of the Nigeria Police Trust Fund (Establishment) Act, 2019.
The attorney General for River state sued the Attorney General of the Federation (1st Defendant), the Accountant General of the Federation (2nd Defendant), Revenue Mobilization, Allocation and Fiscal Commission (3rd Defendant) and the Honorable Minister of Finance for the Federal Republic of Nigeria (4th Defendant). J.B Dauda, SAN, counsel representing the plaintiff by originating summons dated 19th May, 2020 but filed 20th May, 2020 sought determination of the constitutionality or otherwise of the act of the Federal Government and its agencies then subsequently sough for 8 reliefs which could be summarized into the following;
1. An order that the Federal Government and its agency including the Nigeria police force and other party sued be ordered to stop the continued deduction or receipt of any part of the “Federation Account” before the sharing of the total revenue among the constitutional beneficiaries.
2. An order that the provision of section 4(1)(a) and 4(1)(b) of the Nigeria Police Trust Fund (Establishment) Act, 2019 be declared unconstitutional for violating the provision of the constitution of the Federal Republic of Nigeria.
3. An order that the Federal Government refund all sums that has been deducted from the Federation account.
4. An order that 2nd, 3rd and 4th defendant distribute all monies credited to the Federation account to all the constitutional beneficiaries in accordance to the provision of section 162(3) of the constitution.
3.0: ARGUMENTS
It is the contention of the plaintiff that by the provision of item 45 of the Exclusive Legislative List (Second Schedule, Part 1), Section 214 and 215 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and Sections 3 and 4 of the Police Act, it is the constitutional duty and responsibility of the Federal Government of Nigeria to establish, fund and maintain The Nigeria Police.
The plaintiff also argued that the provision of the constitution is literal and direct. The constitution uses the word “shall”. The plaintiff further argued that pursuant to section 162 of constitution, the revenue in the” Federation Account” is required to be distributed to only three (3) sets of beneficiaries, namely; the federal Government, the State Governments (including the Plaintiff) and the Local Government Councils in each State, which includes the 23 Local Government Councils of Rivers State.
That under the Constitution, no other organ or agency of the Federal Government (The Nigeria police Force inclusive) is entitled to receive revenue as a first-line charge from the Federation Account and that all deserving organs or agencies of the Federal Government are entitled to receive their allotted revenue out of the allocation due to, and distributed to the Federal Government. That by virtue of the constitution, and the Police Act, the duty to fund and maintain the Nigeria Police Force is that of the Federal Government and not that the State Governments.
The plaintiff further argued that the refusal of the 1st,2nd and 4th Defendants to collect and pay all revenue collected into the federation Account, more specifically, levy of 0.005% of the net profit of the companies operating businesses in Nigeria, is depriving Rivers State Government of its due share of revenue distributed from the federation Account and that the distribution of the amount constituting 0.5% of the total revenue accruing to the federation Account (for the purpose of funding the Nigeria Police Trust Fund) before distribution of revenue in the said Account to the constitutional beneficiaries is also depriving the Rivers State Government of a substantial part of the revenue it is entitled to receive from the Federation Account.
The plaintiff also argued that Section 4 (1) (a) of the Nigeria Police Trust Fund (establishment) Act, 2019 which permits a direct deduction of the amount constituting 0.5% of the total revenue accruing to the Federation Account for the benefit of the Nigeria Police Trust Fund is inconsistent with Section 162(3) of the constitution and therefore null and void, in that the Constitution by virtue of section 1 (3) thereof is supreme. A.G ABIA STATE VS. A.G. FEDERATION (2003) LPELR – 610 (S.C.) at 39
Learned counsel therefore urged the court to resolve the issue in favour of the plaintiff.
Learned counsel to the 1st Defendant, T.D Agbe Esq. filed Notice of preliminary objection and formulated two issues, namely;
1. Whether the subject matter of this suit is one that can be entertained by this court
2. Whether the case is actionable before the FHC for failure to comply with order 34, Rule 2 of the FHC (Civil Procedure) Rules, 2019.
It is the argument of the defendant that the Federal High court lacks jurisdiction to entertain the suit because it involves an action between the State government and the Federal government which should have been instituted at the Supreme court pursuant to section 232 of the 1999 constitution.
Learned counsel to the plaintiff in his reply argued that the current issue at hand is not one that involves only the State government and the Federal government but one which involve the legality or otherwise of the act of the Federal government and its agencies, an issue which the Federal High court has jurisdiction to entertain pursuant to section 251(1) of the constitution.
The court upheld the argument of the plaintiff and dismissed the preliminary objection.
On the second issue, learned counsel argued that the plaintiff has failed to comply with the due process of law, in filling the suit, since he disregarded the pre-conditions set out in order 34, Rule 2, Federal High Court rules, 2019 in that, they ought to have brought the action by way of judicial review since the plaintiff is seeking declarations and injunctions.
In response to the above issue, learned counsel to the plaintiff argued that the current suit is not an application for judicial review. It is the argument of the learned counsel that the instant suit was commenced vide an originating summons pursuant to order 3 Rule 9 of the rules the court rules seeking the interpretation and construction of the relevant provisions of the constitution and other statutes and a declaration of the jural rights of the parties. Hence, the argument of noncompliance with order 34, Rule 2, Federal High Court rules, 2019 is untenable since the current suit is not an application for judicial review.
The court after a careful consideration of the argument of the counsels on this issue, held that the said order 43, Rule 2 of the FHC rules, 2019 has no correlation with the instant action commenced via originating summons seeking the construction and interpretation of the relevant provisions of the 1999 constitution and the Nigeria Police Trust Fund (Establishment) ACT, the court held that this particular ground of preliminary objection has failed and dismissed same.
Moving forward, in the written address in support of the counter affidavit, the defendant couched a sole issue and submitted same for determination;
Whether the Nigeria Police was created for the federation and as such monies can be allocated to the Nigeria Police Trust Fund by an Act of the National Assembly?
Learned counsel to the 1st Defendant submitted that it is the statutory duty of the National Assembly to make laws and have acted lawfully pursuant to section 4(2) and (3) of the constitution by the enactment of the Nigeria Police Trust Fund Act. Learned counsel to the defendant subsequently submitted that the Act was enacted to improve the general welfare of the personnel of the Nigeria Police Force so as to further ensure the protection of lives and property of Nigerians.
Learned counsel also submitted further that pursuant to section 214 and 215 of the constitution, the Nigeria Police Force was created for the Federation as a whole and not solely for the Federal Government and that the Federation consists of the Federal, States and Local Governments, among others. It was also submitted on behalf of the 1st Defendant that the total revenue accruing to the federation Account stipulated in the Police Trust fund Act is different from the amount standing to the credit of the Federation Account.
Learned counsel referred the court to the New International Websters Comprehensive Dictionary English Language on the definition of the word “Credit” and argued that Section 162(3) of the 1999 Constitution stipulates that any amount standing to the credit of the Federation Account is what the 3 listed beneficiaries will be entitled to, not the total revenue accruing to the Federation Account. That there are charges that can be drawn on the revenues accruing to the Federation Account before the balance will be said to be standing to the credit of the Federation Account.
Upon the receipt of the 1st Defendant Counter Affidavit and written address, learned senior counsel to the plaintiff filed a reply on point of law and submitted that the literal interpretation of section 162 of the constitution is to the effect that only the constitutional beneficiaries listed in the constitutional and not a fourth party shall share revenue generated into the federation account.
It is the law that if the wordings of the law are clear and unambiguous, there is no need for external aid to interpret the said provision of the law. This is to ensure that the purpose of the law is achieved.
Learned counsel further submitted that the clear admission of the 2nd Defendant that since inception, the Nigeria Police Force has been under the control of the federal government is a clear admission that the Nigeria Police is an agent of the Federal Government. Thus, since the Nigeria police is an agent of the Federal Government, it is not entitled to share directly from the revenue which belong to the Federation and should be shared between the Federal, State and Local government.
It is also the submission of the learned counsel that the provision of section 162 (2) & (3) of the constitution and section 4 of the Nigeria Trust Fund (Establishment) Act is clear, literal and unambiguous.
Learned counsel to the defendant finally urged the court to resolve the issue in favour of the defendant.
4.0: RESOLUTION
After a dispassionate consideration of the arguments of the learned counsels in the instant suit, the court (HON. JUSTICE A.R MOHAMMED) made the following resolutions. It is important to take note of these resolution as they set the record straight and further established principles of law. It is the view of this writer that the decision of the court is only a restatement of the law and nothing more. Below are the resolutions;
1. That the where the words used in couching the provisions of a statute or Sections of the Constitution are clear and unambiguous, a Judex (court) must accord such words used their ordinary and grammatical meanings without any colorations.
2. That the provision of section 162 (2) (3) of the constitution is clear, direct and unambiguous and the use of the word shall in the constitution is intentional. Moreover, section 162 of the 1999 Constitution has made it clear that all revenue collected by the Government of the Federation with the exception of the proceeds from the personal income tax of armed forces of the federation, the Nigeria Police Force, the Ministry of the department of Government charged with responsibility for foreign affairs and the residents of the FCT, must be paid into the Federation Account maintained by the Federation.
3. That the argument of learned counsel to the 1st Defendant that the National Assembly has the power to enact the Nigeria Police Fund (establishment) Act, 2019 and that Section 4(1) thereof is in tandem with Section 162(3), is untenable, to the extent that section 4(1)(b), permits the Government of the federation to pay into the Nigeria Police Trust Fund, revenue meant for the federation Account, and this is inconsistent with section 162(3) of the Constitution. Section 162(3) of the Constitution, having expressly stated the beneficiaries of the Federation Account, the intention is that those not mentioned therein including the Nigeria Police Trust fund shall be excluded.
4. That it is clear from 4th item of the Exclusive Legislative List, Section 214 of the Constitution and Section 5 of the Nigeria Police Trust fund (establishment) Act, 2019 that the duty to establish and maintain the Nigeria Police is that of the Government of the federation thereby making the Nigeria Police Force an agency of Federal Government. Consequently, funds received by the Government of the Federation includes funds for the Nigeria Police Force. Thus, section 162(1) and (3) of the constitution cannot be interpreted to allow the Government of the Federation to further deduct any sum(s) from the Federation Account for the purpose of training or maintaining the Nigeria Police Force.
5. That the court find no basis for the submission of the learned counsel to the 1st Defendant that the word “credit” used in Section 162(1) of the Constitution clearly shows that a debit can be made from the revenue accruing to the Federation Account before it can be distributed to the bodies mentioned in section 162(3) of the Constitution and that there could be charges that could be said to be standing to the credit of the Account. The court finds this submission rather absurd. This is because to accede to the submission is to read into Section 162(3) what is not there.
6. That on relief 6 and 8 in the originating summons which seek for the refund of all sums deducted from the Federation Account and to deduct from the sums due to the Government of the Federal, Republic of Nigeria from the Federation Account and that the deducted sums be paid into the federation Account to be distributed in accordance with the provisions of Section 163(3) the constitution.
7. That it is only the Plaintiff who filed this suit that is entitled to be refunded its share of the deducted sums from the Federation Account.
8. That the reason for this holding is that none of the other 35 states of the Federation have instituted action to challenge the said deduction from the Federation Account. Thus, it is the law that the Court cannot make any order on behalf of or for the benefit of a person who has not come to court to seek any redress since the court is not a father Christmas.
5.0: LESSONS AND IMPLICATION
After a thorough analysis of the above judgement. It is evident that the court of law at all time will give effect to the provisions of the constitution and other statutes to prevent a situation whereby the purpose of the law will be defeated. It is also evident from the above judgement that the judiciary is indeed the hope of the masses. This further shows that the role of the judiciary in the effective and smooth operation of the country can never be overemphasized.
It is also important to note that the principle of checks and balances as enshrined in the constitution is relevant. While the legislature has the statutory power to make laws for the peace, order and good governance of the country, the legislature must also ensure that the exercise of such power is in line with the constitution and they must not enact any law that will be in conflict with the ground norm. It shall not be a tenable defense for the executive arm of government that it only obeyed laws duly made by the legislative arm of the country when the law it strives to obey is against the spirit of the constitution.
Finally, the implication of this judgement is that pending the determination of this case at the court of appeal and the supreme court, the judgement remains the law and any purported deduction from the federation account to fund an agent of the Federal government or any law that permits the remittance of a sum of money which should be remitted into the federation account to an account of the Nigeria Police Trust fund or any other designated account is illegal and unconstitutional.
6.0: CONCLUSION
In conclusion, by virtue of section 162(1) of the Constitution of the Federal Republic of Nigeria, 1999, the Federal Government holds the position of a trustee in respect of all monies paid into the federation account on behalf of the States from which the revenue was generated.
Thus, as it is the duty of a trustee to keep a proper account of the trust he administers, and the beneficiary has a right to call upon the trustee for accurate information as to the state of the trust, it is imperative for the Federal Government to render accurate and regular account to the beneficiaries of all monies paid into the federation account when requested so to do. In any event that the Federal government mismanage the revenue or introduce a sharing ratio inconsistent with the constitutional arrangement, states have the constitutional right to seek redress in court.
