Attorney General Of Bendel State V The Attorney General Of The Federation

CASE NAME: Attorney General Of Bendel State V The Attorney General Of The Federation

COURT: Supreme Court

DATE: 1981

CITATION: (1981) 10 SC 1

NATURE OF THE CASE

The case was a constitutional law dispute concerning the interpretation of the 1979 Constitution of Nigeria, particularly concerning revenue allocation and the control of natural resources. It was a civil case initiated through an original jurisdiction suit filed directly at the Supreme Court of Nigeria, as it involved a dispute between a state government and the federal government.

FACTS OF THE CASE

The case of Attorney-General of Bendel State v. Attorney-General of the Federation arose from a dispute between the government of Bendel State and the Federal Government of Nigeria concerning the constitutional authority to impose and collect certain taxes. This dispute was set against the backdrop of the 1979 Constitution, which established Nigeria as a federal state with distinct spheres of legislative competence for the federal and state governments.

The core issue in contention was whether the Federal Government had the constitutional power to enact the Allocation of Revenue (Federation Account, etc.) Act of 1981 and, more specifically, whether it could authorize the deduction of a percentage of state revenues to benefit local governments. Bendel State, through its attorney general, challenged the constitutionality of these deductions, arguing that they encroached upon the fiscal autonomy of the states as guaranteed by the Constitution.

The immediate trigger for the lawsuit was implementing the revenue-sharing formula prescribed by the Federal Government. Under this arrangement, a portion of the revenue that constitutionally belonged to the states was deducted at the federal level before distribution. Bendel State contended that these deductions were ultra vires the powers of the Federal Government, meaning that they exceeded the lawful authority granted to the Federal Government by the Constitution.

Bendel State maintained that under the 1979 Constitution, the revenue collected by the federal government and credited to the federal account was to be distributed among the three tiers of government, federal, state, and local, strictly per constitutional provisions. The state government argued that the Federal Government’s unilateral action in deducting funds at source before distribution was an unconstitutional interference with state financial autonomy. The plaintiff further contended that the Federation Account was not an independent source of federal authority but a revenue-sharing mechanism. Any Federal Government deductions without explicit constitutional authorization amounted to an unconstitutional usurpation of state resources.

From a historical perspective, the case was significant because it tested the principles of fiscal federalism in Nigeria. The 1979 Constitution sought to establish a clear division of responsibilities between the Federal and State Governments, and the dispute in this case centered on whether the Federal Government had overstepped its constitutional boundaries. The broader context of the case reflects longstanding tensions between federal and state authorities over resource control and revenue allocation, issues that have remained contentious in Nigeria’s constitutional development.

The litigation was initiated by Bendel State directly in the Supreme Court, as the Constitution granted original jurisdiction to the Supreme Court in disputes between the federal and state governments. The Attorney-General of Bendel State, acting on behalf of the state government, sought declaratory reliefs, asking the court to pronounce that the Federal Government’s actions were unconstitutional, null, and void. The Federal Government, on the other hand, defended its actions by arguing that it had the constitutional authority to regulate the distribution of funds from the Federation Account in accordance with national interests.

ISSUES DETERMINED BY THE COURT

1. Whether or not the Court has jurisdiction to entertain the plaintiff/State’s claims, the nature of the evidence which can be received in these proceedings, and the extent to which the Court may make use of the recorded proceedings of the National Assembly.
2. Question relating to the constitutional validity of the procedure adopted in passing into law the Allocation of Revenue (Federation Account, etc.) Bill, 1980, and the interpretation to be placed on the relevant sections of the Constitution of the Federal Republic of Nigeria, 1979, and, in particular, sections 54, 55 and 58.
3. Whether or not the plaintiff/State, by its action in receiving payments of money allocated to it under the Allocation of Revenue (Federation Account etc.) Act, 1981, is estopped from pursuing its claims in these proceedings and must therefore, be deemed to have waived its right to challenge the validity of the Act-

ARGUMENTS

The Attorney General of Bendel State argued that, in view of the provisions of subsections 1 and 2 of section 2 of the Revenue (Federal Account) of 1981, the federal government is empowered to administer funds to ameliorate ecological problems and to develop mineral-producing areas of Nigeria. The law ought to be declared unconstitutional and void.

It was provided in those sections that an amount being one (1%) percent of the Thirty-five (35%) percent to be distributed to the State Government must be paid into a fund to be administered by the Federal Government, which be used for the amelioration of ecological problems in Nigeria. An amount of one and a half (1.5%) percent of the Thirty-five (35%) percent to be allocated for the State Government shall be paid into another fund to be administered by the Federal Government, to be administered by it for the development of mineral producing areas of Nigeria.

The Plaintiff further argued that since Subsection 2 of Section 6 provides for the establishment of a Joint Local Government Account Allocation Committee for each state to guarantee prompt payment of allocations from the Federation Account and from the state to the Local Government Councils, this provision was equally required to be declared void and unconstitutional.

The AG Bendel State also sought a declaration that the Government of Bendel State was entitled to the Statement of the Federation Account.

Due to the nature of the case and the implications of the eventual outcome on the other states of the Federation, the Court ordered that due notice be given to the other 18 states to ensure they were adequately represented.

The first defendant contended that the creation of a Federation Account Allocation Committee was to guarantee that payments of the allocations to which the state was entitled were made in a timely manner and under the formula prescribed by the Act and that in the Federation Account Allocation Committee, the Bendel State Finance Commissioner is a representative of Bendel State.

He argued that the Federation Account monthly statement balance was also the one that the Federation Account Allocation Committee reviewed and approved for each month at a meeting held between the 10th and 15th of every month. The Central Bank of Nigeria makes this statement.

In these monthly meetings, the representatives can approve or deny the statement and request clarification on specific entries.

The defendants added that officials of the Central Bank, Inland Revenue Department, Treasury Department, and Nigerian Petroleum Corporation were also present at the meetings to provide information and clarification where necessary.

The Plaintiff called the deputy accountant-general of Bendel State as a witness, who testified that Bendel State was not regularly receiving a statement of the Federation Account.

LEGAL REASONING

One of the paragraphs of consideration was Section 149 of the Constitution of the Federal Republic of Nigeria of 1979, which provides that the Federation shall maintain an account into which revenue is deposited, which account shall be shared amongst the three levels of government in accordance to a law passed by the National Assembly; States shall maintain an account called the State Joint Local Government Account; It shall be the duty of the States to allocate to the local government, funds as shall be prescribed by the National Assembly; The State Assemblies shall make laws outlining how the Local Government Funds shall be distributed amongst the Local Government Councils.

The Counsel to the Plaintiff also argued that by the terms of the above section, the Federal government could not set aside funds for any other purpose apart from the distribution of funds amongst the three tiers of government or that it was not within the competence of the National Assembly to appropriate the revenue in the Federation account to any other purpose. He argued that funds for the Federation can only be supplemented from funds paid in respect of the Appropriation Act or other money mentioned in Sections 74, 75, and 77 of the Constitution of the Federal Republic of Nigeria, 1979.

He also argued that those provisions were beyond the powers of the President of Nigeria under Section 5 of the Constitution.”

Defence counsel argued and quoted that  Section 149 states that partition shall be done in the manner prescribed by the National Assembly.

The Court held that in exercising the power conferred by Section 149 to the National Assembly, the National Assembly must not encroach upon the powers of the State government.

No section of Section 149 conferred on the Federal Government the authority to draw upon revenue that had already been allocated to the State Government in respect of the State Government.

It ruled that once the revenue was allocated to the State Government, it became its property, and the State Government had to exercise complete control over it, which was necessary to effect federalism. It was further stated that the distribution of funds allocated to the state Government is not prescribed by the National Assembly, thus leaving it to the Federal Government and failing to meet the requirements of Section 149 of the Constitution, which provides that the National Assembly shall prescribe the manner of distribution.

The defense counsel contended that the very reason for establishing the Joint Local Government Account Allocation Committee was to oversee the allocation of funds to the local Government and State. However, the court relied on the case of Attorney General Ogun State & Ors. v. The Attorney General of the Federation noted that as a general principle, no burden could be placed on the state government by the federal government, and vice versa, including in law-making. This is the essence of true federalism.

Nonetheless, the Constitution’s structure provided for a few exceptions , where the legislative bodies of each state conferred functions on the other Government officials.

Therefore, extraordinary enabling powers under which the Federal or State Government, including its law-making arms, are entitled to promulgate enactments involving the imposition of duties on the body or Government are insusceptible to challenge.

DECISION OF THE COURT

On Issue 1, the Supreme Court held, “that it has jurisdiction under section 4(8) of the 1979 Constitution to adjudicate on the exercise of legislative powers by the National Assembly, and that the jurisdiction of the Court in this regard covers not only the entire legislative process of the House of Representatives and the Senate but also relates to the mode of exercising Federal legislative power set out in sections 54, 55, and 58 of the said 1979 Constitution.”; “that there is a justiciable dispute between the plaintiff (Bendel State) and the Federal Government as to whether or not the passage into law of the Allocation of Revenue (Federation Account, etc.) Bill, 1980, is lawful and constitutional and that, having regard to the provisions of sections 4 (8) and 212 (1) of the 1979 Constitution, the Court has original jurisdiction to entertain the claims of the plaintiff/State”; “that having regard to the provisions of sections 72, 73 (1)(a), (b) and (c), and 112 (a) and (b) of the Evidence Act, Cap. 62 of the 1958 Laws of the Federation of Nigeria, the record of proceedings in the National Assembly, including its journals and minutes, or of any committee there of, are relevant and admissible in evidence as public documents to prove whether or not the National Assembly complied with the express provisions of the 1979 Constitution relative to the passage into law of the Allocation of Revenue (Federation Account, etc.) Bill, 1980”; “that having regard to the wide supervisory powers over legislative actions, vested in the Court under section 4 sub section (8) of the 1979 Constitution, in so far as section 2 of the Acts’ Authentiction Act, 1961, is intended to preclude the Court from going behind the certificate of the Clerk of the National Assembly to make inquiry as to the validity of an enrolled act, that section is inconsistent with the provisions of the 1979 Constitution and, to that extent, null and void.”;

On Issue 2, the Court held, “that, generally, the Court would respect the independence of the Legislature in the exercise of its legislative powers and would refrain from pronouncing or determining the validity of the internal proceedings of the Legislature or the mode of exercising its legislative powers; however, if the Constitution makes provisions as to the mode of exercising its legislative powers, then the Court is in duty bound to exercise its jurisdiction to ensure that the legislature comply with the constitutional requirements”; “that a Bill, whether a money-Bill or a non-money bill, does not and cannot become a law made by the National Assembly unless and until it has been passed by the Senate, the House of Representatives and, except where the provisions of section 54 sub section (5) of the 1979 Constitution apply, assented to by the President of the Federal Republic of Nigeria”; “that section 58 (4) of the 1979 Constitution was designed to ensure that all Bills are passed into law by the two Houses of the National Assembly, and not by any Committee thereof, in the manner provided in section 54 (1), that is, by being separately passed by the Senate, the House of Representatives and, except where section 54 (5) applies, thereafter assented to by the President of the Federal Republic of Nigeria”;

On Issue 3, the Court held, “that estoppel is an equitable doctrine which rests on substantial grounds of prejudice or change of position and not on mere technicalities”; “that it has not been shown that the Federal Government has in any way been prejudiced by reason of the fact that Bendel State has been receiving its share of the revenue under the Act in dispute or that the Federal Government has altered its position in a way that it would not have done if Bendel State had not been receiving its share of the revenue under the Act”; “that when the observance of the provisions of a Statute is required on grounds of public policy or for the benefit of the general public it cannot be waived by an individual; that since the provisions of sections 54, 55 and 58 of the 1979 Constitution for the passage of a Bill into law are made for the benefit of the Nigerian Community at large and founded on public policy for the proper exercise of the legislative power of the National Assembly, it is not open to the plaintiff/State, even if it wished to do so, to waive the right to challenge the invalidity of the Allocation of Revenue (Federation Account, etc) Act, 1981”;

 SIGNIFICANCE OF THE CASE

One of the most significant precedents created by this case was the idea that federal and state government powers must be limited in accordance with the provisions of the Constitution. The Supreme Court has clarified that the federal government only has the powers delegated to it in the Constitution. This doctrine has been invoked in many later cases in which state governments resisted federal authority.

Another precedent this case set was the judiciary’s proactive function in protecting federalism. The ruling bolstered claims that courts can interpret the Constitution to balance power (no level of government has the power to overreach).

In addition, the case has helped to shape the doctrine of fiscal federalism in Nigeria: establishing a legal precedent in revenue allocation disputes that will affect taxation and the ability of states to be financially autonomous. Indeed, the legal legacy of the doctrine has persisted well into the present-day context, especially in cases where states exercise control over co-owned natural resources and in cases concerning financial entitlements from the federal government.

CONCLUSION

The case of Attorney General of Bendel State v. Attorney General of the Federation (1981) 10 SC 1 is a landmark constitutional case in Nigeria and is one of the most trending issues in fiscal federalism under the 1979 Constitution. The main contention was whether the Federal Government possessed the power to pass the Allocation of Revenue (Federation Account, etc.) Act of 1981, and if it could unilaterally withhold some of the state’s revenue for the interest of the local government. The Bendel State government argued that these deductions were an invasion of the financial liberty of the states, and that the Federation Account was nothing more than a device for sharing revenue, and was not a source of independent and federal dominion.

As the case was one of a dispute between a federal government and state government, the Supreme Court exercised its original jurisdiction and considered among others the legal questions of its competency to hear the case, the legality of the legislative process which birthed the Revenue Allocation Act and that Bendel State was wrong to challenge the Act after receiving its allocations. It was further provided that the Court had jurisdiction to review the legislative process of Hutchinson under Section 4(8) of 1979 Constitution to ensure compliance with the constitutional requirements. It stressed that within the realm of federal legislative power, the states were protected from federal overreach and ruled that once revenue had been appropriated to a state, it was beyond the reach of federal jurisdiction, and could not be taken back.