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Supreme Courts Asks FG To Release Withheld Council Funds
FROM EMMANUEL ONWUBIKO, ABUJA
It was jubilation throughout Lagos State yesterday as the state recorded a deserving victory over the Federal Government in a suit in the Supreme Court on the creation of new councils and the subsequent withdrawal by the Federal Government of federal allocations to all councils in the state.
The Supreme Court ruled that President Olusegun Obasanjo has no constitutional power to withhold funds for local councils or tamper with the Federation Account.
The court added, however, that though Lagos State has the constitutional power to create new councils, "there is still one more step or hurdle to be taken or crossed by the National Assembly for the plaintiff (Lagos State) to actualise the creation of the new local councils."
But the Chief Justice of Nigeria, Muhammadu Uwais who gave the lead judgement, which was unanimously endorsed, over-ruled the creation of new local councils by the Lagos State House of Assembly without a consequential legislation by the National Assembly.
In effect, the Supreme Court has ordered the disbursement of funds to the 20 local councils of Lagos State recognized by the constitution.
The dispute between the Lagos State Government and the Federal Government was sparked by a circular from President Obasanjo directing the Federal Ministry of Finance to suspend the disbursement of funds from the Federation Account to all the newly created local councils in the country.
On April 19, 2004, the Lagos State Government went to the Supreme Court to seek:
- A consequential order of the court compelling the defendant to pay immediately all outstanding arrears of statutory allocations due and payable to Lagos State Government pursuant to the provision of Section 165(5) of the 1999 Constitution; and
- An order of perpetual injunction restraining the President of the Federal Republic of Nigeria or, any functionaries or agencies of the executive branch of the Federal Government from doing anything whatsoever to suspend, withhold for any period whatsoever or calculated to suspend or to withhold any monies due and payable to the Lagos State Government pursuant to the provisions of Section 162(5) of the Constitution of the Federal Republic of Nigeria.
The Federal Government on the other hand asked for 10 declarations to the effect that the defendant to the counter-claim has no power or right under the 1999 Constitution to abolish local government areas created under the 1999 Constitution by altering their names, adjusting their boundaries and dividing them into smaller units until the National Assembly has acted pursuant to the Provisions of S.8 (5) of the 1999 Constitution.
The Federal Government also prayed for:
- A declaration that the Plaintiff/Defendant to the counter claim has no power or right under the 1999 Constitution to create new local councils without recourse to the National Assembly as provided for under the Constitution.
- A declaration that the alteration of the names of local governments, the alteration of the boundaries of the local governments and the creation of new local governments done by the Lagos State government and the operation of the new local governments before and or without an Act of the National Assembly to that effect, is illegal, unconstitutional, null and void.
- A declaration that the following local governments are the only local governments established under the 1999 Constitution in Lagos State, Agege, Ajeromi Ifelodun, Alimosho, Amuwo Odofin, Apapa, Badagry, Epe, Eti-Osa, Ibeju/Lekki, Ifako-Ijaye, Ikeja, Ikorodu, Kosofe, Lagos Island, Lagos Mainland, Mushin, Ojo, Oshodi/Isolo, Shomolu, Surulere.
- A declaration that Sections 1, 2 and 3 of the local government areas law No. 5 of 2002 of Lagos State are in contravention of Section 3 (6) and Part 1 of the first schedule to the Constitution of the Federal Republic of Nigeria, 1999 and therefore are unconstitutional, null and void in so far as they relate to the said Section 32 (6) and Part 1 of the First Schedule to the 1999 Constitution, with respect to Lagos State of Nigeria.
- A declaration that the elections conducted by the Lagos State government on Saturday, 27th March, 2004 into the 57 local government areas created by the Local Government Areas Law No.5 of 2002 of Lagos State are inchoate and cannot take effect as presently established in that the 57 Local Government Areas are not known to the Constitution.
- An Order nullifying and setting aside the elections conducted by the Lagos State Government on Saturday, 27th March, 2004 into the 57 Local Government Councils established by the Local Government Areas Law No. 5 of 2002 of Lagos State;
- An order of injunction restraining the Lagos State governor, the Lagos State House of Assembly or any functionaries or agencies of the Lagos State Government from maintaining, financing and recognising any local government in Lagos State apart from the ones created under Schedule 1 of the 1999 Constitution.
Justice Uwais in his lead judgement said: "Now, it is necessary to deal first with the issue of jurisdiction raised by the plaintiff, for if it succeeds that will be the end of the counter claim raised by the defendant.
"As I stated earlier the basis of the dispute in this case is the directive given by the President that funds from the Federation Account due to local government councils of a state where new local government areas have been created but no step has yet been taken by the National Assembly to consequentially amend Section 3 (6) of the Constitution to accommodate such new local government councils, should be withheld. The letter makes reference to not only the creation of new local government areas but also the holding of elections into the local government councils of the new local government areas as well as the opening of State Joint Local Government Accounts by the states concerned. It follows therefore that the area of the dispute between the parties is not limited only to payment of funds from the Federation Account to the local government councils through the state governments."
Uwais further ruled that: "In the light of the foregoing, on close examination of the reliefs sought in the counter claim, it will be seen that relief's Nos. 1, 2, 3, 4, 5 and 6 are all akin to the payment of funds by the defendant from the Federation Account to the new local government councils created by Law No.5 of 2002 for which there is real controversy between the parties since the plaintiff's originating summons is also based on the payment of funds due to the local government councils in Lagos State.
Similarly, reliefs Nos. 7 and 8 concern the elections held into the new local government councils created by Law No. 5 of 2002, which has been mentioned in the letter by the President to the Minister of Finance, which is the source of the controversy in this case.
Relief No. 9 touches on the creation of the new local government areas created by Act. No. 4 of 2002. On the whole I am of the view that all the reliefs sought in the counter claim touch on the constitution's responsibility of the defendant as perceived by the President. Therefore the dispute between the parties, in my opinion, involves question, of law on which the extent of the constitutional (i.e. legal) rights of both the plaintiff and the defendant depend. I, therefore, hold that there is a proper dispute under Section 232-subsection (I) of the 1990 Constitution between the parties and this court has the jurisdiction to determine the dispute. Besides, it is a general principle of law that the court will not readily deny itself jurisdiction unless the jurisdiction is expressly ousted by legislation "
The Chief Justice further declared: " I, having read all the provisions of the Constitution aforementioned, am satisfied that the House of Assembly of Lagos State has the right to pass the creation of Local Government Areas Law No.5 of 2002 and to amend it by passing the creation of Local Government Areas (Amendment) Law, 2004.
It is very clear to me, however, that for the plaintiff to receive funds from the Federation Account under Section 162(3) and (5) there must be local government councils, which have legally or constitutionally come into existence. It seems to me for this to happen the remaining or consequential action must be taken by the National Assembly to amend Section 3-subsection (6) and Part 1 of the First Schedule of the Constitution. This is so, because the references made in Section 162 to local government councils must be with a view to the local government areas specified in Section 3(60), which I have earlier held to be equal to or synonymous with local government councils."
Uwais ruled that: "What follows from this is that the laws enacted by Lagos State are Law No.5 of 2002 and the 2004 Law which are both valid Laws since the House of Assembly of Lagos State has the power under Sections 4 subsections (6) and (7), 7 subsection (1) and 8 subsection (3) of the Constitution to legislate in respect of the creation of new local government areas and local government councils, which are one and the same for the purpose of Section 162 subsections (3) and (5) of the Constitution.
However, in the context of Section 8-subsection (5) and section 3-subsection (6) such Laws cannot be operative nor have full effect until the National Assembly makes the necessary amendment to Section 3-subsection (6) and Part 1 of the First Schedule to the Constitution. The effect of this is that the Laws are valid but inchoate until the necessary steps as provided by the constitution are taken by the National Assembly."
The Chief Justice added: "Next is the question whether the President of the Federal Republic of Nigeria was right to direct the Minister of Finance not to release statutory allocations from the Federation Account to the states, which created new local government areas or held elections into the new local government councils or failed to maintain a special account called "State Joint Local Government Account," as provided by Section 162 subsection (6) of the constitution.
It has been argued that the President by virtue of the "Oath of Office," which he took on assumption of office is bound to protect and defend the constitution." In addition, the executive powers of the federation are vested in the President by Section 5-subsection (1) (a) of the constitution and such powers extend to the execution and maintenance of the constitution. This is certainly so, but the question is: "Does such power extend to the President committing an illegality?"
Certainly the constitution does not and could not have intended that. As I have already shown, the provisions of the constitution support the creation of new local government areas or councils. In other words the taking of such a step or act by Lagos State is not unconstitutional as thought by the President. The constitution fully recognises the step taken except that there is still one more step or hurdle to be taken or crossed by the National Assembly for the plaintiff to actualise the creation of the new local government areas.
Our attention has not been drawn to any other provision of the constitution which empowers the President to exercise the power of withholding or suspending any payment of allocations from the Federation Account to Local Government Councils or to state governments on behalf of the local government councils as provided by Section 162 subsections 93 and (5) of the Constitution.
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