➥ CASE SUMMARY OF:
AG Kaduna State & Ors. v. AG Federation & Ors. (2023) – SC
by Branham Chima (SAL).
➥ COURT:
Supreme Court – SC/CV/162/2023
➥ JUDGEMENT DELIVERED ON:
FRIDAY THE 3RD DAY OF MARCH 2023
➥ AREA(S) OF LAW
Naira redesign;
Original jurisdiction of the Supreme Court;
Agency;
Locus standi.
➥ PRINCIPLES OF LAW
⦿ THE ACT OF THE PRESIDENT IS THE ACT OF THE FEDERATION BEING AN AGENT
The Government of Nigeria is therefore an agent of the Federation of Nigeria as it exercises the executive powers of the Federation on behalf of the Federation or Federal Republic of Nigeria for its benefit and wellbeing. In AG Federation V AG Abia State(2001) LPELR-24862(SC) this court stated that the Federal Government of Nigeria represents all the constituent states of the federation and exercises the powers of the Federation as trustee for and on behalf of the Federation. This court restated in A-G Lagos State v. A-G Federation (2014) 9 NWLR (Pt. 1412) 217 at 280, that the Federal Republic of Nigeria (or the Federation) is the repository of the sovereignty of the people of Nigeria, whereas the Federal and State Governments in contradistinction are donees of the power and authority of the people. Being an agent of the Federation, the act of the President as head of Government of Nigeria is therefore the act of the Federation. It is an established principle of hallowed antiquity that quit facit per alium facit per se (one who acts by another acts himself). — E.A. Agim, JSC.
⦿ THE GOVERNMENT OF THE FEDERATION VS THE FEDERATION
So much heavy weather is made about the distinction between the Federation and the Government of Nigeria that exercises its executive powers. That distinction no doubt has constitutional basis. But since the Government of the Federation exercises the executive powers of the Federation, there is, legally and practically speaking, hardly a dividing line between the acts of the Government of the Federation and the acts of the Federation. The distinction does not exist to the extent of turning the Government of the Federation into a sovereign that can act without regard to the Federation. The Government of the Federation is not a sovereign. It is a creation of the Constitution for the purpose of exercising the executive powers of the Federation. The Federation is inherently the sovereign and its sovereignty is further established by S.2(1) and (2) of the 1999 Constitution which provides that (1) Nigeria shall be one indivisible and indissoluble sovereign state to be known by the name of the Federal Republic of Nigeria. (2) Nigeria shall be a Federation consisting of States and the Federal Capital Territory, Abuja. — E.A. Agim, JSC.
⦿ SOVEREIGNTY BELONGS TO THE PEOPLE OF NIGERIA
The sovereignty enjoyed by the Federation is owned by the several individual persons constituting the people of the Federation of Nigeria who own the lands that together form the territory of Nigeria. S.14(2) of the 1999 Constitution acknowledges this ownership by declaring that (a) Sovereignty belongs to the people of Nigeria from whom government through this Constitution derives all its powers and authority. (b) The security and welfare of the people shall be the primary purpose of government; and (c) The participation by the people in their government ensured in accordance with the provisions of this constitution. — E.A. Agim, JSC.
⦿ LIMIT CANNOT BE IMPOSED ON CASH WITHDRAWAL AS IT IS ILLEGAL
The imposition of withdrawable cash limits after collection of the old notes, amount to a scheme to entrap and not allow much of such funds come out of the banking system. My attention has not been drawn to any law that permits a bank not to pay cash to a customer on demand on the ground that the 1st defendant has not been able to print enough new naira notes or that permits the 1st defendant to direct the imposition of limits on the cash to be paid from a customer’s account after deposit of the old naira notes. To the extent that the directive has continued to deprive all persons and the plaintiffs access to a substantial part of their funds in banks inform of cash, it forcefully and illegally interferes with their rights of ownership and use of their said funds. Such restriction on an owner’s right to freely use his or her property is illegal unless provided for by a law. — E.A. Agim, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Emmanuel Akomaye Agim, JSC
➥ APPEARANCES
⦿ FOR THE APPELLANT
A.U. Mustapha SAN.
⦿ FOR THE RESPONDENT
Chief Kanu G. Agabi, SAN.
➥ CASE FACT/HISTORY
On 26-10-2022, the Governor of the Central Bank of Nigeria by Press Remarks during a special press briefing at the Central Bank of Nigeria announced that the President of the Federal Republic of Nigeria has given the Central Bank of Nigeria the approval to redesign, produce, release and circulate new series of bank notes at N200, N500 and N1000 levels and to call in or withdraw from circulation existing bank notes of the same levels, that in line with the approval, the Central Bank of Nigeria has finalized arrangements for the new currency to begin circulation from 15-12-2022 after its launch by the President, that the new and existing currencies shall remain legal tender and circulate together until 31-1-2-23 when they shall cease to be legal tender, that this naira redesign policy would inaddition to ensuring that our legal tender is strong and effective, deepen our drive to entrench cashless economy, help rein in the huge currency outside the banking system, thereby making monetary policy more efficacious and help minimize incidents of terrorism and kidnapping through the reduction or elimination of the large volume of money outside the banking system used as source of funds for ransom payments.
By 15th December, 2022, the new naira notes were not available despite the assurances of the Federal Government that they would be introduced on that date. Most people had rushed to pay their existing currencies into their banks ahead of the dateline in the expectation that the new notes would be available by mid-December 2022. Their expectations were dashed as the new notes were scarcely available.
For days running into weeks, many customers go to the banks or ATM machines and remain in long queues from early morning till evening and go back home empty handed. In the few cases of payments being made, customers are paid as little as N1000, N2,000, N5,000, N20,000 irrespective of their huge bank deposits. While it remained very difficult to obtain or access the new naira notes in the banks, the old bank notes had ceased to be legal tender after the 31-1-2023.
The 1st to 3rd plaintiffs on 3-2-2023 commenced Suit No. SC/CV/162/2023 by originating summons praying for the determination of the following questions, inter alia – 1. Whether the demonetization directive/policy by the President of the Federation to wit: withdrawal of the old 200, 500 and 100 Naira notes is consistent with the provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended) which make provision for the Executive Powers of the President of the Federation and the extant laws on the subject matter? 2. Whether the 3-month notice given for the implementation and completion of the said demonetization policy by which time the old N1000, N500 and N200 Naira notes shall cease to be legal tender satisfies the condition set out in Section 20(3) of the CBN Act 2007?
The 1st defendant on 20-2-2023 filed a notice of preliminary objection praying for this suit to be dismissed or struck out for want of jurisdiction on the following grounds, inter alia – “The Suit, as presently constituted and no matter how couched, falls within the exclusive jurisdiction of the Federal High Court, as provided under Section 251 (1), (d), (p), (q) & (r) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) by virtue of the subject matter and the party whose statutory power is being challenged.”
➥ ISSUE(S) & RESOLUTION(S)
[PRELIMINARY OBJECTION: OVERRULED]
I. Whether the Supreme Court has original jurisdiction to entertain this case?
RULING: IN PLAINTIFFS’ FAVOUR.
A. THE DISPUTE IS BETWEEN THE FEDERATION AND THE FEDERATING UNITS (STATES)
“This is clearly a dispute between the Federating units and Federation and other federating units over the exercise of the executive powers of the Federation by the President without regard to the Constituents of the Federation. The dispute is between the plaintiff states on one hand and the Government of the Federation and two other states on the other hand. It is a dispute within the original jurisdiction of this court vested on it by S.232(1) of the 1999 Constitution which provides that “The Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute between the Federation and a State or between States if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends.””
“The plaintiffs in their suits contend that since they are constituents of the Federation and that since the executive power of the Federation is vested in the President and the Government of Nigeria, to be exercised on behalf of the Federation, then the executive act or decision of directing or approving a measure that obviously would have far reaching disruptive impact on the public governance and economic and social order of the constituent states such as introducing redesigned naira notes into circulation, withdrawing the old bank notes and limiting cash withdrawals from banks to reduce the money in circulation and increase the money in the banks, should have been made after due consultation with the constituents of the Federation through the National Council of States and the National Economic Council and in such a manner as to avoid the massive disruptions of the governance of the constituents and disruptions of trades and all economic activities and the pervasive hardship its hasty and haphazard implementation has unleashed on people in the constituent states.”
“As I had held herein, it is a dispute between some states on one hand and the Federation and some states on the other over the manner the President exercised the executive powers of the Federation in his directive to the CBN to carry out the change of currency. The named parties herein are the plaintiffs states against the Government of the Federation and two states of the Federation as defendants. A suit with this subject matter and between the parties named herein can be entertained only by this court in its original jurisdiction and cannot come within the exclusive original jurisdiction given to the Federal High Court by S.251(1) of the 1999 Constitution.”
B. IT IS NOT NECESSARY FOR THE CENTRAL BANK OF NIGERIA TO BE JOINED
“Let me consider the argument that the non-joinder of the Central Bank of Nigeria as a defendant in this suit robs this court of the jurisdiction to try the suit. This argument is invalid for the following reasons. It is the action or decision of the President and not the action or decision of the Central Bank of Nigeria or its Governor that is challenged by this suit. The suit challenges the constitutional validity of the President’s directives or approval given to Central Bank of Nigeria to introduce redesigned naira notes into circulation and withdraw old bank notes without first consulting or seeking the advise of the National Council of States and the National Economic Council, which are bodies to which the Governors of the plaintiff States belong, without prior notice or reasonable notice to the public, without first meeting with the Federal Executive Council or National Security Council to discuss the economic and security implications of the policy and without any form of consultation whatsoever with all stakeholders in the Nigerian economy, including state governments, federal and state legislatures, financial institutions, civil societies, professional bodies and other concerned persons.”
“In any case, the Central Bank of Nigeria is an agency of the Government of Nigeria. Therefore, whatever it does is deemed to have been done under the general directives of the President who is the repository of the executive powers of the Federation, which he exercises in the making and execution of monetary policies for the country, through the agency of the Central Bank of Nigeria and its Governor, an officer in the public service of the Federation. So, the Central Bank of Nigeria need not be joined in the suit as a defendant when its disclosed principal, the Government of Nigeria is named as the 1st defendant. The law is settled by a long line of decisions of this court that an agent of a revealed or known principal is an unnecessary party to an action. See for example Osigwe V PSPLS Management Consortium Ltd &Ors(2009) LPELR-2807(SC) and Carlen V University of Jos(1994) 1.”
“The suit as constituted can be fairly, effectually and conclusively tried and determined in respect of the rights and interest of the parties before it without the joinder of the Central Bank of Nigeria. The law is settled that the non joinder of a person who can be a party to an action, as a party to the action, would not defeat it, if the action as constituted as to parties, their rights and interests and the issues raised or arising for determination in the suit, can be fairly, effectually and conclusively tried and determined without joining such a person as a party to the action. See Okoye V NCF Co Ltd &Ors(1991) All NLR 328, Bello V INEC(2010) LPELR-767(SC) and Green V Green(1987)LPELR-1335(SC).”
C. CENTRAL BANK OF NIGERIA (CBN) CANNOT REINTRODUCE NEW LEGAL TENDER WITHOUT PRESIDENT’S ORDER
“It is glaring from this provision that the Central Bank of Nigeria or its Governor has no power to introduce new naira notes into circulation or withdraw existing ones, if there is no directive of the President of Nigeria to do so. The 16th February 2022 national broadcast by the President of Nigeria on the challenges facing the implementation of his directive, admit clearly that the he directed the change of currency and the manner it is being implemented.”
.
.
II. Whether the plaintiffs have no locus standi to bring the suit?
RULING: IN PLAINTIFFS’ FAVOUR.
A. THE PLAINTIFFS HAVE A DETERMINABLE RIGHT
“The rights they assert in this suit are the right to be first consulted by the President as constituents of the Federation and the right to reasonable notice as such constituents before the President gave the directive or approval to the CBN to implement the change of currency notes, the right to protection of their states’ governance, economic and social order against massive disruptions and hardships that has resulted from the hasty and not well thought through and organized implementation of the change and the right to the establishment of adequate infrastructure and measures to prevent the said disruptions and hardships. It is obvious that the directive has been carried out. The fact is common knowledge, is not reasonably open to question and does not require proof, that the implementation of the directive has continued to deprive all persons and the plaintiffs access to a substantial part of their funds in banks, thereby forcefully and illegally depriving them their rights of ownership and use of the said funds for state functions. The President’s national broadcast of 16 2-2023 confirms this.”
“Inherent in their status as constituents of the Federation under a democratic constitution, is their right to be consulted by the President before the exercise of any executive power of such magnitude as can have far reaching affect on the governance, economic and social order of each constituent of the Federation. Such right is inherent in the idea of a Federation in a democracy. Without it, the Federation losses its sovereignty and the President becomes the sovereign and the Government of Nigeria a dictatorship.”
.
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III. Whether sections 52(1) & 51 of the BOFIA Act ousts the jurisdiction of this Court in respect of the Defendant?
RULING: IN PLAINTIFFS’ FAVOUR.
A. THE SECTIONS ARE INCONSISTENT WITH THE NIGERIAN CONSTITUTION
“These provisions cannot be applied to prevent the exercise by this court of the exclusive original jurisdiction given to it by S.232(1) of the 1999 Constitution. To do so will render them inconsistent with S.232(1) of the Constitution and void to the extent of the inconsistency by virtue of S.1(1) and (3) of the 1999 Constitution. This is because there is nothing in S.232(1) of the Constitution limiting the exclusive original jurisdiction it has given this court to any subject matter or excluding any subject matter from it. At the risk of repetition, I reproduce here again the provisions of S.232(1) of the Constitution for ease of reference. The exact text reads thusly ‘The Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute between the Federation and a State or between States if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends.’”
“The scope of the original jurisdiction is over ‘any dispute between the Federation and a State or between States if and in so far as that dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends.’ It did not exclude some type of such disputes. The Constitution having used such general words as “any dispute” and “any question” to vest this court an unlimited subject matter exclusive original jurisdiction, no court including this court has the power to exclude from the original jurisdiction of this court disputes between states and the Government of the Federation over the exercise by the President of a power given to it by the Central Bank Act or other legislation.”
.
.
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[MERIT: SUCCEEDS]
I. Whether the President of Nigeria was legally bound to consult or seek the advice of the National Council of States, National Economic Council, Federal Executive Council, National Security Council and other stakeholders before directing the Governor of the Central Bank of Nigeria to introduce new naira notes and withdrew existing naira notes?
RULING: IN PLAINTIFFS’ FAVOUR.
A. THE PRESIDENT SHOULD HAVE CONSULTED THE NATIONAL ECONOMIC COUNCIL, INTER ALIA, FIRST
“The constituent states are members of the National Council of States and National Economic Council and are each represented in the Federal Executive Council. Since they are constituents of the Federation and since the executive power of the Federation is vested in the President and the Government of Nigeria, to be exercised on behalf of the Federation, then the executive act or decision of directing or approving a measure that obviously would have far reaching disruptive impact on the public governance, economic and social order of the constituent states such as introducing redesigned naira notes into circulation, withdrawing the old bank notes and limiting cash withdrawals from banks to reduce the money in circulation and increase the money in the banks, should have been made after due consultation with the constituents of the Federation through the National Council of States and the National Economic Council and in such a manner as to avoid the massive disruptions of the governance of the constituents and disruptions of trades and all economic activities and the pervasive hardship its hasty and haphazard implementation has unleashed on people in the constituent states. As I had held herein, it is obvious that the directive has been carried out and the fact is common knowledge, is not reasonably open to question and does not require proof, that the implementation of the directive has continued to deprive all persons and the plaintiffs access to a substantial part of their funds in banks, thereby forcefully and illegally depriving them their rights of ownership and use of the said funds for state functions.”
“The Constitution did not expressly require the President to make such consultations with the constituent states or seek advice from the bodies mentioned above before issuing the directive in question here or before exercising any executive powers of the Federation. The duty is implicit in the provisions of S.5(1) of the 1999 Constitution that makes the President an agent of the Federation. As held herein, it is inherent in their status as constituents of the Federation under a democratic constitution, is their right to be consulted by the President before the exercise of any executive power of such magnitude as can have far reaching affect on the governance, economic and social order of each constituent state of the Federation. Such right is inherent in the idea of a Federation in a democracy. Without it, the Federation losses its sovereignty and the President becomes the sovereign and the Government of Nigeria a dictatorship.”
“The identifying character of democratic constitutional governance is the wide consultations and broad consensus behind the exercise of executive powers through bodies established for that purpose by the Constitution. Such bodies include the Federal Executive Council that is required by the Constitution to have at each of the 36 State of the Federation and the Federal Capital Territory and the National Economic Council which consists of 36 States Governors elected by their people and the Governor of the Central Bank of Nigeria, an appointee of the President, as members, with Vice President as Chairman of the Council who is also a member of the Federal Executive Council and the National Council of State. Good governance and economic prosperity cannot thrive in a plural society like ours if executive power of the Federation with far-reaching impact is exercised without imputs from the constituent states on how it affects them.”
.
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II. Whether the President’s said directive or approval was given without provision for reasonable notice to the public?
RULING: IN PLAINTIFFS’ FAVOUR.
A. THERE WAS NO NOTICE GIVEN TO THE PUBLIC
“There is nothing to show any formal public notice to the constituent states or the public by way of a national broadcast or an official gazette of the notice or National Newspaper publication of the notice of the change of currency. The notice was given by way of Press Remarks by the Governor of the Central Bank during a special press briefing at the Central Bank on 26-10-2022. It is these Press Remarks that the 1st defendant relied on as the 3 months notice it gave prior to the 31-1-2023, when it said existing naira notes would cease to be legal tender. These press remarks cannot qualify as notice under S.20(3) of CBN Act 2007. They are mere press remarks and not a notice to the public.”
“The 1st defendant’s reliance on the said press remarks as the notice of its plan to introduce new naira notes and withdraw the existing ones show its disregard of the importance of the giving of reasonable notice as a foundation for a valid Presidential directive to change the naira notes. Where a statute requires notice to validate or precede an official act, the failure to give a valid notice will vitiate the resulting act. In any case, for the exercise of the power given by a statute to be valid, it must comply with conditions prescribed by that statute for the exercise of that power. So, the directive given by the President to withdraw existing naira notes and introduce redesigned ones without notice to the constituents of the federation is invalid.”
B. ASSUMING THERE WAS A NOTICE, SUCH IS NOT UPTO THREE MONTHS AS REQUIRED
“Assuming the press remarks can be treated as notice as the 1st defendant has done, it cannot be regarded as 3-month notice (prescribed by section 20(3) CBN Act) from 26th October 2022 to 31st January 2023. Having regard to the timeline of implementation of the demonetization policy, the new naira note was only launched by the President on 23rd November, 2022; at which time the Central Bank of Nigeria (CBN) never had even close to enough printed new naira notes to replace the old notes. It was for this reasons that the CBN had announced on the 26th October, 2022 that the new notes will be made available to banks around the middle of December, 2022. Even at that, the new notes were not available for use by citizens. Thus, in essence, even going by the CBN’s implementation timeline, the period of notice could only have started counting from the period the new naira notes were to be made available for use in mid-December, 50 days after announcement of the policy on 26th October, 2022. So, the notice period ought to exclude the initial 50 days from 26th October to 15th December, 2022, when the new notes had not been issued and made available for cash swap with old notes simultaneously. This yawning gap had the effect of making imposition of 31st January or grace period of 10th February, 2023 as further approved by the 1st Defendant unreasonably short. Had the notice been correctly construed, the three months would have commenced by 15th December, and ran out at about 20th March, 2023. The time misalignment let to logjam that has grounded the entire economy and governance in the plaintiffs’ respective states across the country.”
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✓ DECISION:
“In the light of the foregoing, I hold that all the preliminary objections lack merit and are hereby dismissed. I hold that this court has the jurisdiction to entertain and determine all these suits.
In the light of the foregoing, I hold that no reasonable notice was given as required by S.20(3) of the CBN Act 2007 before the President gave the directive or approval in question. Therefore, the directive and its implementation is invalid. Even though the directive and its implementation is invalid, since the new naira notes have already been introduced and the old ones massively withdrawn, for practical purposes, in the face of the situation as it is, the President should direct the recirculation of the withdrawn old 200, 500 and 1000 naira notes and the two versions should continue as legal tender till 31-12-2023, by which time the redesigned ones would have been printed enough to completely replace all the old notes.
A DECLARATION that the demonetization directive/policy by the President of the Federation to wit: withdrawal of the old 200, 500 and 1000 Naira notes unlawfully impedes the exercise of the Executive powers of the plaintiffs’ States and other obligations to facilitate and protect the welfare of the citizens of the said States pursuant to Section 5(2) and other provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended) as well as other extant laws.
A DECLARATION that the directive of the President of the Federation exercised is illegal to the extent that it restricts, without an enabling law, the rights of the plaintiffs to freely use their money in various bank accounts.
An order that the old version of200, 500 and 1000 naira notes shall continue to be legal tender alongside with the new or redesigned version until 31-12-2023.
An order that that the reception of old 200, 500 and 1000 naira notes and the swapping of same with new naira notes shall continue till 31st December, 2023.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
S. 232(1) of the 1999 Constitution;
S.20(3) of the C.B.N. Act 2007 which provides that “Notwithstanding sub-sections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.”
S.52(1) of the CBN Act, 2007 provides that “(1) Neither the Federal Government nor the Bank nor any officer of that Government or Bank shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon that Government, the Bank or such officer, by this Act.” “(3) For the purposes of this section, the Minister or any officer duly acting on his behalf shall be deemed to be an officer of the Federal Government and Governor, any 36 Page Deputy Governor of the Bank or other employee shall be deemed to be an officer of the Bank.”
Section 51 of Banks Other Financial Institutions Act, 2020 (BOFIA) provides “Neither the Federal Government nor the bank nor any officer of that Government or bank shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon the Government, the bank or such officer by this Act.”
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
