Withheld LG funds: Supreme Court strikes out Osun AG’s suit against AGF

Withheld LG funds: Supreme Court strikes out Osun AG’s suit against AGF

In a split decision of six Justices to one, the Supreme Court on Friday, struck out a suit filed by the Attorney General of Osun State against the Attorney General of the Federation (AGF), in relation to the dispute over the withheld allocations due to local governments in the state.

The apex court also held in the lead judgement that the federal government was wrong in withholding the local government funds adding that the action was in grave breach of the 1999 Constitution.

Justice Mohammed Baba Idris who read the lead judgment said, the hand of the federal government was soiled in its decision to unjustly seize the Osun local government funds and admonished it to strictly ensure that the funds are directly channeled to local government accounts.

The apex Court, in the judgement, dismissed AGF’s contempt allegations against Osun adding that he was in more contempt than Osun by not paying the fund as required by law.

The Apex Court however held that, the Osun state Attorney General and Commissioner for Justice has no legal right to have instituted the case on behalf of the 30 local governments in the state.

That Court held that those who won the local government election and having been inaugurated are the jurisdict persons that can sue and be sued directly.

Justice Idris however said that, since there was no evidence that Osun state Attorney General was briefed by the local governments, he ought not to have filed the case on their behalf.

However, Justice Emmanuel Akomaye Agim, in a minority judgment, disagreed with the six other Justices of the court, holding that Osun state Attorney General has the right to institute the case.

Justice Agim said, the action of the federal government in withholding the local governments funds was in bad taste because it was capable of crippling the activities of the Councils.

Reacting to the judgement, Adetunbi, SAN said, he finds it extremely difficult, with respect to the majority judgement that, the AGF will have the capacity to protect the 774 local government areas in the country and the Osun Attorney General cannot protect the 30 local government areas in the state.

“One thing is certain that, they rightly cautioned the federation. Their Lordship refused to exercise jurisdiction and did not make any pronouncement. That doesn’t give anybody victory. The matter has been struck out”, he said while speaking with journalists after the judgement.

In the suit, the Osun state Attorney General, who is the plaintiff in the matter, sought an order of the apex court restraining the AGF from paying the statutory allocations standing to the credit of the 30 Local Governments in Osun state to the sacked APC Chairmen and Councillors.

The Osun Attorney General also sought an order of the apex court directing the AGF to immediately release the “monthly allocations and revenues due to and standing to the credit of the Constituent Local Government Councils of Osun state for all the months they have been unlawfully and unjustifiably withheld by the AGF and pay same directly into the Local Government allocation accounts to be opened in favour of the validly elected Local Government Council officials elected on February 22, 2025”.

Besides, the plaintiff who invoked Supreme Court’s original jurisdiction based on a letter according recognition to the disputed APC Chairmen and Councilors, also sought an order stopping the AGF from further withholding, suspending or seizing monthly allocations and revenues standing to the credit of the Constituents Local Governments, having democratically elected Chairmen and Councilors in place.

The grouse of the Osun state Attorney General was that, the AGF was wrong in his letter recognizing APC Local Government Chairmen and Councilors when the matter was pending before court of records. He described the action as an attempt by the AGF to destroy the subject matter of the plaintiff.

He also hinged his case on the ground that, the election that brought in the APC officials as Local Government Chairmen and Councilors had been nullified by a Federal High Court and upheld by the Court of Appeal in Abuja.

Musibau Adetunbi, SAN while presenting the case of the plaintiff, pleaded with the seven-member panel of Justices to uphold his arguments and grant all the reliefs sought by his client.

However, in opposition, the AGF represented by Chief Akin Olujimi, SAN argued a preliminary objection where he urged the apex court to dismiss the case of the plaintiff on various grounds.

Among others, Olujimi argued that the plaintiff lacked locus standi (Legal right) to bring the case before the Supreme Court to invoke its original jurisdiction.

He also contended that the apex court lacked jurisdiction to entertain the suit because the suit was not competent to be presented directly to the apex court as done by the plaintiff.

The senior lawyer argued that, the suit did not disclose any cause of action adding that, the tenure of the disputed council chairmen still runs till October 22, 2025 and that, the proper thing was for the statutory allocation to be released to the officials to run the Council.

Similarly, he argued that Osun state Attorney General had engaged in abuse of court processes by filing cases in about seven high courts on the same subject with the same parties.

He, therefore, urged the court to refuse granting the reliefs sought by the plaintiff and dismiss the suit in its entirety for lacking in merit.