Deduction Of N50 Stamp Duty Declared Illegal By Court

The Federal High Court in Asaba, Delta State, has declared the deduction of N50 as stamp duty on teller deposits or electronic transfer of funds illegal.

The court, presided by Nnamdi Dimgba, gave the verdict in a case between a businessman, Rupert Irikefe, and the Central Bank of Nigeria, Zenith Bank, and the Attorney General of the Federation.

A copy of the court judgement shows that it was delivered on Thursday, December 9.

The judge also condemned how agencies of government treat court judgements with contempt in recent years.

Details of the judgement showed that Mr Irikefe, the plaintiff, sought eight declarations against the CBN and the other defendants – Zenith Bank and AGF.

He urged the court to declare, among others, that the conduct of the CBN in continuing to impose, direct the imposition, deduction or remittance to it by the Zenith Bank 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 his current account is unlawful and contemptuous of court judgements.

These deductions, he argued, the bank made 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.

But in their defence arguements, the CBN and others argued that the suit with preliminary objections which were all dismissed by the court were unmeritorious.

Mr Irikefe argued that by the decisions of courts on the subject, it was unlawful and disrespectful of the banks to continue to impose the charges on his account.

The CBN on it’s part claimed that it is protected from any liability whatsoever by Sections 52(1) and 53(1) of the CBN Act.

Zenith Bank, on its part, argued that it cannot be liable because it was merely acting on the instruction of a disclosed principal.

In its judgement, the court noted that the CBN’s argument was misconstrued and could not hold water.

The court said that before the bank’s can enjoy the privilege they argue about, 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.

It held that the said deductions made from the Mr Irikefe’s account in the face of subsisting decisions of courts prohibiting such actions does not qualify as one done in good faith.

Mr Dimgba said that the CBN participated in Suit No FHC/L/CS/126/2016 between Retail Supermarkets Nigeria Limited v. Citi Bank Limited and Central Bank of Nigeria which challenged its circular with reference CBN/GEN/DMB/02/006 where CBN instructed banks to deduct the said N50 as stamp duty.

He maintained that the court, in that case, held that it was unlawful for the apex bank and the commercial banks to continue to make those deductions.

The judge quipped: “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?”

Thereafter, the court ruled that by the dictate of Section 287 of the 1999 Constitution, the banks are bound by the decisions of the court and are under obligation to enforce them.

The court thereafter held that the argument of Mr Irikefe was meritorious and awarded the sum of N2 million as damages.