The Federal High Court sitting in Abuja on Tuesday has joined the School of Bank Honours LTD/GTE as a co-defendant in the suit seeking commission or percentage from the accrued deposits paid into the Central Bank of Nigeria (CBN) NIPOST stamp duty collection account by all commercial banks.
In its motion on notice seen by Nairametrics, the School of Bank Honours’ lead counsel, Oladipo Okpeseyi, SAN told Justice Inyang Ekwo that the Nigerian Postal Service (NIPOST) upon due deliberations, executed a Master Service Agreement dated 14th day of September, 2012 with his client, appointing it as its agent, representative and consultant for the recovery of the N50 Stamp Duty on all electronic cashless transfers and Manual Bank Teller Deposits on a commission basis of 20% (Twenty Percent) on each N50 (Fifty Naira) recovered.
Nairametrics previously reported that the Central Bank of Nigeria (CBN) filed a preliminary objection against a legal action instituted by Kasmal International Services which sought a court order barring it from disbursing all accrued deposits paid into the CBN NIPOST stamp duty collection account by all commercial banks.
Counsel for the CBN and the Attorney-General of the Federation, Chief Adeniyi Akintola SAN, had told the Federal High Court Abuja that the purported appointment of the Kasmal by the Nigerian Postal Service (NIPOST) was void at the onset on the ground that stamp duties charges on bank transfers and deposit is a tax that is exclusively administered by the Federal Government through the Federal Inland Revenue Services (FIRS).
Nairametrics also reported that the court in Abuja had three weeks ago, declined restraining the CBN as requested Kasmal’s lawyer, Dr Alex Izinyon SAN, in a motion ex-parte in the suit marked FHC/ABJ/CS/335/2024, but adjourned for parties to show cause.
Izinyon had contended that while a total of 3.8 trillion naira stands in the Stamp Duty Collection Account ready for distribution between the Federal Government, State Government, Local Governments, the Federal Inland Revenue Service (FIRS), Coordinating Consultants and other bodies, his client was entitled to 15% of the monies having worked as a consultant.
Recommended reading: Stamp duty: CBN objects Kasmal International Services’ suit against disbursement of ‘trillions’ in commercial banks
School of Honours’ Motion for joinder
In its motion dated 8th day of April 2024, Mr Adekola Adetoya deposed in an affidavit in support that he is the lead consultant of the School of Honours on the Federal Government (FGN) Contract for Stamp Duties Recovery.
He said he was instructed to vanguard collections into the Federal Government coffers from the banking sector for all constitutional beneficiaries.
He maintained that his company is the exclusive holder of the copyright on the N50 Stamp Duty for the Federal Government of Nigeria on all electronic cashless matter of the current suit.
He stated,
- “Upon being so appointed to represent the Federal Government, the Lead Consultant of the Party Seeking to be joined/Applicant herein, being the author of the Research Work on the N50 Stamp Duty, registered the copyright on the Research Work and a Copyright Certificate No. LW1023 dated 27th day of September 2012 was duly issued to him.
- “The Party Seeking to be Joined/Applicant, in furtherance of its mandate sought and obtained the approval of the 1st Defendant (CBN) to contact and collaborate with Deposit Money Banks and other financial institutions for the collection of the N50 Stamp Duties.
- “The Party Seeking to be Joined/Applicant also sought the understanding and/or collaboration of some Deposit Money Banks as well as the Nigerian Inter-Bank Settlement Systems (NIBSS), who were ready to partner with the Party Seeking to be Joined/Applicant on this assignment.”
He stated that based on the research work that was conducted by the company, it approached the 1st Defendant, Central Bank of Nigeria (CBN) and the Nigerian Postal Service (NIPOST) for collaboration on revenue generation for the Federal Government of Nigeria.
Adetoya added,
- ‘The Party Seeking to be Joined/Applicant required the Central Bank of Nigeria (CBN) to issue a circular to the Deposit Money Banks and other Financial Institutions, which was delayed and, in a bid, to get an audience with Mr. President, (Former President Goodluck Ebele Jonathan) on the project and get 1st Defendant to issue the necessary circular, sought the assistance of Late Mr. Buruji Kashamu of Kasmal Group, the Chairman of the Plaintiff/Respondent herein on the term that Kasmal Group will be entitled to N2.50 (Two Naira, Fifty Kobo) out of the N10 (Ten Naira) commission fee of the Party Seeking to be Joined/Applicant in the Master Service Agreement being 5% of every N50 Stamp Duty recovered.”
What transpired in court
At the resumed hearing on Tuesday, Okpeseyi told Justice Ekwo to join his client as a co-defendant in the case in line with his motion on notice.
He explained in his motion that the rights and pecuniary interests of his client will be in jeopardy, if not joined as a co-defendant to the suit filed by Kasmal.
Justice Ekwo asked the legal team of Kasmal, CBN and the AGF if they are opposing the motion.
They said they won’t oppose the motion for joinder but would respond to the submissions in it.
The judge also asked if they have been served with the motion for joinder by the School of Banking Honours in line with the rules of court.
They responded in the affirmative.
After hearing from the lawyers, the judge adjourned for hearing but vowed to penalise any lawyer that disrupts the flow of the proceedings.
He said,
“Upon consensus of counsel, I make an order adjourning this case to June 5, 2024 for hearing.
“If the hearing is disrupted by any counsel, that counsel will be personally penalised.”
More insights
- Stamp duty is an indirect tax imposed on several financial transactions.
- In 2023, Nairametrics recalls that a former CBN governor, Godwin Emefiele revealed that the total revenue collected as stamp duty on behalf of the Federal Government in 6 years, between 2016 and 2022, was N370.686 billion.
- The Kasmal approached the court to determine its percentage from the agreed terms with relevant agencies particularly NIPOST.
- School of Honours says its a Company “Limited by Guarantee”, accredited by National Board for Technical Education (NBTE) and listed by the Joint Admissions & Matriculations Board (JAMB) as Innovation Enterprise Institution (IEI) to skill youth on banking operations; and to create jobs in making them more employable locally, and competitive globally.