The Federal High Court sitting in Asaba presided over by Hon. Justice (Dr.) Nnamdi O. Dimgba in a case between Mr. Rupert Irikefe and CBN, Zenith Bank & Attorney General of the Federation has ruled that it is illegal to deduct #50 as stamp duty on teller deposits or electronic transfers of monies from N1,000 above.
This is contained in a Judgement of the Court delivered on Thursday, 9th day of December, 2020.
By an amended originating summons filed on 15th day of October, 2020, the Plaintiff sought for 8 declarations against the Defendants.
He urged the Court to declare that “the conduct of the 1st Defendant (CBN) in continuing to impose, direct the imposition, deduction or remittance to it by the 2nd defendant and or receiving the sum of #50 Naira as stamp duty on electronic transactions or transfer of monies from #1,000 (One Thousand Naira) upwards from Plaintiff’s current account no. 1014242877 despite the subsistence and or its awareness of the Judgements in Appeal No. CA/L/437A/2014 and Suit No. FHC/L/CS/126/ 2016 is arbitrary, unlawful, illegal, dismissive and contemptuous of the lawful orders of superior courts of competent jurisdiction, condemnable, null and void and of no effect”.
In addition, the Plaintiff claimed the sum of #50 million as general damages and #50 million as exemplary damages.
Meanwhile, the Defendants all greeted the suit with preliminary objections which were all dismissed by the Court as unmeritorious.
However, on the substance of the suit, the Court reformulated a sole issue for determination as follows:
“Whether from the totality of the materials presented before the Court, the Plaintiff is entitled to any or all of the reliefs sought”.
The Plaintiff argued that by the decisions of Courts on the subject, it is unlawful and disrespectful of the Defendants to continue to impose the charges on his account, adding that Judgement of a Court is binding and subsisting until same is set aside.
He further argued that CBN does not have the competence to impose a tax as the power to so do resides in the Federal Inland Revenue Service (FIRS) by the dint of Section 87 of the Stamp Duties Act and relevant provisions of the FIRS ACT, 2007.
Conversely, CBN argued that it is protected from any liability whatsoever by virtue of Sections 52(1) and 53(1) of the CBN Act and BOFIA respectively which imbue the CBN with immunity from any act done or undone in good faith.
In addition, the 2nd Defendant (Zenith Bank) argued that it cannot be liable because it was merely acting on the instruction of a disclosed principal.
On the part of the AGF, he argued that the Plaintiff had not been able to place sufficient materials before the Court to warrant a grant of the reliefs.
THE DECISION OF THE COURT
Having carefully listened to the pith and substance of the case advanced by the parties, firstly, the Court noted that the argument of the CBN is misconstrued and cannot stand.
“To enjoy the protection of the referenced provision, firstly, the action done or omitted to be done should be in good faith; and secondly, the actions done or undone in good faith should be one done or undone in the process of the execution of any powers conferred upon the apex bank by the legislation”, the Court held, adding that can it be said that the purported deductions made from the Plaintiff’s account “in the face of subsisting decisions of Courts prohibiting same, one done in good faith? I do not believe so. The reason is not far fetched.”
The Court further said that CBN participated in “Suit No FHC/L/CS/126/2016 between Retail Supermarkets Nigeria Limited v. Citi Bank Limited and Central Bank of Nigeria…challenging…its circular with reference – CBN/GEN/DMB/02/006” where CBN instructed Banks to be deducting the said #50 as stamp duty, adding that the Court “held that it was unlawful for the apex bank and the commercial banks to continue to make those deductions”.
The Court, therefore, made the below notable pronouncements:
“The question, is having been aware of the above clear decisions of competent courts (of this Court and Court of Appeal), why then did the 1st Defendant and the 2nd Defendant continue to treat those decisions as if they were not existing, and to continue to implement the provisions of the circular which had already been nullified as being inconsistent with the law, namely the Stamp Duties Act?
“I have never ceased to wonder the practice that is so very much exacerbated in current climes, where agencies of the government treat decisions of courts of law with disdain, and carry on as if this decisions were not in existence. In my view, and I have raised this alarm anytime an opportunity presents itself, (and I do so for posterity,) obedience to the rule of law of which respect for the authority and decisions of law is an integral part, is at the foundation and the heart of the stability of our society. Everybody has a stake in ensuring that the rule of law prevails, and that the authority of courts of law is held as sacred. The reason is because ultimately, everybody turns to the court for protection, for in the moral authority of the courts lie salvation for all. This includes for the weak, in the immediacy, and for the strong, potentially. Human and executive powers are all transient. Stripped by the ephemerality that attends human affairs of his raw or executive power, the strong today inevitably turns out to be the weak tomorrow. And the question is where will the strong, now weakened, turn to for protection tomorrow, if he or she in the hours of strength of today, facilitate or participate in the destruction of the courts, to which all ultimately turn to as an alcove of salvation in the moment of vulnerability? This is a question that I will continue to pose, and for which all stakeholders must and should ruminate in their minds.”
Furthermore, the Court ruled that by the dint of Section 287 of the 1999 Constitution, the Defendants are bound by the decisions of the Court and are under obligation to enforce same.
The Court further stressed:
“Coming down to earth, my empathetic view is that by continuing with the deductions of stamp duty charges from the bank account of the Plaintiff and having same remitted to it, inspite of clear and binding decisions of Court prohibiting same, the 1st Defendant (CBN) has not acted in good faith; it actually acted in bad bad faith. By its every action, the 1st Defendant cannot take lawful shelter under Sections 52(1) and 53(1) of the CBN Act and BOFIA”.
Besides, the Court dispelled the contention of Zenith Bank that it was acting for a disclosed principal, ruling that “the exception to the general rule of liability in agency is that, where an agent is a wrongdoer, he cannot enjoy any protection from liability simply by pleading that it is an agent of a disclosed principal.”
The Court added that Zenith Bank “became a wrongdoer when they willfully disobeyed the judgement of Courts. They should therefore suffer the consequence. The truth is that when it comes to obedience to the law, everybody is on his own and should exercise independent judgment.”
In the whole, the Court adjudged the Plaintiff’s suit to be meritorious and awarded the sum of # 2 million damages adding that “it is granted to set an example that it is reprehensible conduct to willfully disobey decisions of competent courts of law”.
Also, the Court awarded the cost of #500,000 in favour of the Plaintiff against the CBN and Zenith Bank.
