A Federal High Court sitting in Ibadan, the Oyo State capital, has said the Economic and Financial Crimes Commission (EFCC) has no power to arrest anyone or investigate cases of debt recovery arising from a breach of contract.
Justice J. O. Abdulmalik stated this in an April 1 judgment.
The judge declared that the EFCC Act 2004 does not empower the commission to arrest, detain anyone or investigate cases of breach of contracts in business transactions.
He held that the commission only has power to arrest, detain or probe financial crimes, not civil transactions.
Justice Abdulmalik gave the verdict in a suit filed by an Ibadan-based businessman, Elder Francis Morakinyo Afolabi, through his lawyer, Mr Joshua Olaniyan, against the EFCC and five others.
Afolabi sued the EFCC following his arrest, alleged torture and freezing of his bank account by the commission.
The EFCC had received a petition from Mr Kehinde Olaniyan, with the business name of Kehinde R. Olaniyan Nigeria Enterprises, over Afolabi’s alleged failure to fulfil a business transaction of N14 million in 2015.
The petition was submitted to the Ibadan zonal office of the commission, which reportedly invited Afolabi.
Other respondents are: three investigating officers of the commission and First Bank of Nigeria PLC, in whose custody Afolabi’s account was frozen.
The complainant was admitted to bail while his bank account was frozen pending the completion of ‘investigations’.
But Afolabi sued the commission and other respondents, seeking a declaration that his arrest and freezing of account was illegal as well as the publication of a public apology in two national dailies that are popular in Ibadan.
He also sought N100 million damages against the six respondents.
Citing the case of Lima versus Mohammed (1999) LPELR-1973 (Supreme Court), the judge declared that “an aggrieved party in a breach of contract is to seek civil redress by way of insisting on actual performance of the contract or seek damages for the breach”.
Justice Abdulmalik held that some Nigerians use law enforcement agents to retrieve debts arising from civil transactions instead of approaching the court to do so, apparently in an attempt to avoid lawyers’ professional fees.
The judge also held that Afolabi’s fundamental human rights were breached by his arrest and freezing of his bank account.
He awarded N500,000 damages to the applicant.
Justice Abdulmalik absolved the bank, saying it was under obligation to honour EFCC’s request to freeze the account freezing, being the commission empowered by law to do so.
But the judge set aside the directive freezing Afolabi’s bank account.
For justice to be done, the court held that Olaniyan, who use the EFCC to freeze Afolabi’s account, should publish a public apology in a national daily whose circulation is popular in Ibadan.
Among the seven requests sought, six were resolved in favour of Afolabi.
The court held that the commission has no power to investigate or resolve disputes arising from civil contracts; is not a debt recovery agency and freezing of Afolabi’s bank account was illegal.
It also declared Afolabi’s arrest as a breach of his fundamental human rights and a form of torture.
Justice Abdulmalik said: “On issues one, two, three and four of the applicants, there is no gainsaid that the first respondent (EFCC) does not have the power to resolve or/and investigate disputes arising from contracts or civil transactions. Also, as reiterated in a plethora of judicial authorities, the first respondent is not a debt recovery agent.”
The judge referred to, among others, Section 6B of the EFCC Act 2004, Laws of Federation of Nigeria, which states that the commission shall be responsible for the investigation of all financial crimes, including advance fee fraud (419), money laundering, counterfeiting, illegal charge transfers, future market fraud, fraudulent encashment or negotiable instruments, computer credit card fraud, contract scam, etc.
He said the transaction between Afolabi and Olaniyan was civil, adding that failure to honour terms of contract does not amount to a crime.
Justice Abdulmalik also said such a matter is strictly a civil transaction that is outside the powers of the commission, irrespective of the garb it puts on the matter.
“Carefully from the above facts, I do find that irrespective of the descriptive inventory lexicon employed by the fifth respondent (Kehinde Olaniyan) to title his petition or report to the first respondent, it does not dissipate the facts on the ground from being that of a civil transaction of contract which has gone wrong.
“To cushion my point, the fif5th respondent’s report to the first respondent can be tantamount to a cry of ‘help me collect my money from the applicant’. Otherwise, the question will be ‘what does the fifth respondent really want the first to fourth respondents to investigate?’ There is no mystery about the fact: the fifth respondent supplied applicants goods worth N14,611,820:00 which has not been paid for…
“The ‘investigation power’ vested on the first respondent is in relation to the commission of a crime and not a civil transaction, as simple as recovery of debt. The requisite sections of the Economical and Financial Crimes Commission (Est) Act, Laws of Federation of Nigeria 2004, as aforementioned, all referred to instance and occasion of suspicion of crime,” he said.
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