Court name
Court of Appeal
Case number
L 443 of 2014

Corporate Affairs Commission v United Bank For Africa Plc And Ors (L 443 of 2014) [2016] NGCA 76 (29 March 2016);

Law report citations
Media neutral citation
[2016] NGCA 76
Headnote and holding:

The issue was whether the Corporate Affairs Commission (appellant) has powers to inspect affairs of banks (respondents) without a court order.

The case emanated from decision of the trial judge declining to grant an order directing the respondents to comply with the appellant inspectors. 

The appellant argued that the Companies and Allied Matters Act (the act) empowers it to carry out an inspection without the need of a court order. It pointed out that the trial judge erred by holding that the appellant require a court order to investigate the respondents. 

The respondents opposed the appeal by pointing out that the appellant can only carry out an inspection on the respondents through a court order and that the appellant had no power to appoint inspectors. They further argued that allowing an inspection by the appellant amount to breach of bank/client confidentiality. 

The court ruled that the act allows the appellant to appoint investigators at the instances of company members or through a court order. It held that s 314(1) of the act empowers the appellant to investigate affairs of the banks without the need of a court order. The court ruled that the trial judge erred and the appeal was upheld. 

 

 

In the Court of Appeal
Holden at Lagos

 

Between

Appellant

CORPORATE AFFAIRS COMMISSION

and

Respondent

1. UNITED BANK FOR AFRICA PLC
2. WEMA BANK PLC
3. CITIBANK NIGERIA LIMITED RESPONDENTS
4. FIRST CITY MONUMENT BANK PLC
5. STERLING BANK PLC
6. ZENITH BANK PLC

 
Judgement

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO. JCA: This is an appeal against the decision of the Federal High Court, Lagos Division, coram IDRIS J. delivered on the 18th day of March, 2013.

The brief facts of this case as put forward by the Appellant is that the Appellant, as the regulatory body established as per the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria, 2004 and in purported exercise of powers conferred on it by Section 7 of the Act, wrote to various commercial banks requesting them to furnish to the Appellant records of all loan transactions and documentation between the banks and public and private companies in Nigeria between 1st January, 2008 and 31st December, 2010. The Respondents however failed to comply with the demand on the ground that compliance would be a breach of their confidentiality duty to their customers and also that the Appellant had failed to obtain an order of court in this regard.

In its judgment, the trial court granted to the Appellant two out of the three reliefs but declined to grant the third relief which is an "order directing the Defendants to comply with the inspection exercise schedule of the Plaintiff by supplying the information sought by the Plaintiff" Naturally aggrieved with the said decision, the Appellant filed a Notice of Appeal dated 17th April, 2013 and filed 22nd April, 2013 on two grounds.

In compliance with the Rules of court, parties filed and exchanged their respective brief and urged this court to resolve the issue(s) as formulated anon in their favour. Appellant's brief settled by Chief, the Hon. U.N. Udechukwu, KSC, SAN; O.O. Adekeye Esq.; O.V. Iweze Esq. of Aina Blankson LP is dated and filed 12th July, 2013 but deemed 17th March, 2014. Appellant's Reply Brief to the 5th Respondent's Brief as well as Notice of Intention to vary is dated 8th October, 2013 and filed 9th October, 2013. A sole issue was identified for the determination of this appeal in the Appellant's Brief thus:

"Whether in carrying out its functions, under Section 7 of the Companies and Allied Act, with particular reference to Sections 197(1), 198(1), 199 and 315(2) of the Companies and Allied Matters Act, the Plaintiff, the Corporate Affairs Commission, requires a Court Order. - GROUNDS 1 &2”

1st Respondent's Brief dated and filed 18th February, 2015 but deemed 13th May, 2015 was settled by K.O.P. Odidika; Dorcas Oghome Ndukwe; C.N. Omeke of Sower & Messuarius Solicitors. A sole issue was nominated thus:

"Whether based on the provisions of Section 315(1) and (2) of the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria, 2004, the Appellant has the power to carry out investigation of the affairs of the 1st Respondent without first obtaining an order of court (Ground 2 of the Notice of Appeal)”

2nd Respondent's brief of argument settled by Prof. Taiwo Osopitan, SAN; Damilola Salisu (Miss) is dated 29th January, 2015 and filed 30th January, 2015 but deemed 8th May, 2015. A sole issue was also identified as follows:

"Whether or not the Learned Trial Judge correctly construed the provisions of Sections 314, 315(1) & (2) of the Companies and Allied Matters Act in arriving at the conclusion that the Appellant requires an enabling Court Order for the appointment of an inspector before it can demand from the Respondent information on the charges created by the Respondents9 Customers and third parties.”

On its part, 3rd Respondent filed a brief dated and filed 17th February, 2015 but deemed 25th February, 2015 which was prepared by Fred Onuobia; Fidelis Adewole; A.G. Anafi of G. Elias & Co. Only one issue was submitted thus:

"Whether, without an order of court, the Appellant can request the 3rd Respondent to allow it to carry out "special inspection exercise” on all loan transactions and documentation between the 3rd Respondent and its customer especially public and private companies pursuant to sections 7, 197, 198, 199 and 315 to 322 of the CAMA?”

The 4th Respondent's Brief settled by Dr. Wale Olawoyin; Wole Omisade Esq.; 'Funke Akanbi (Mrs) of Olawoyin 85 Olawoyin is dated 9th January, 2014 but deemed 25th February, 2015.

Counsel formulated one issue thus:

"Whether the Appellant has the power to carry out an investigation of the affairs of the 4th Respondent or any company under Section 315(1) and (2) of the Companies and Allied Matters Act Cap C20 LFN, 2004 without first obtaining a court order?"

5th Respondent also caused a brief to be filed on its behalf by Abiodun Olaleru of George Ikoli & Okagbue Law Firm. The Brief is dated 13th August, 2013 and filed 16th August, 2013 but deemed 13th May, 2015 wherein Counsel submitted a single issue thus:

"Whether the Appellant can carry out investigation of the affairs of the 5th Respondent or any Company under Section 315(1) and (2) of the Companies and Allied Matters Act without first obtaining a court order?"

The 6th Respondent's counsel, Evelyn U. Obioha (Mrs) of Evelyn Obioha & Co. filed a brief on behalf of the 6th Respondent. Same is dated 8th October, 2013 and filed 14th October, 2013 wherein a sole issue was also identified thus:

"Whether the learned trial judge was right in striking out/dismissing RELIEF 3 of the Plaintiff/Appellant's claim."

It is apparent from the issues formulated by the respective counsel to the parties in this appeal that save for semantics, they are all the same. I am therefore of the firm view that the issue that is apt for the determination of this is appeal is:

"Whether the Appellant has the power to carry out an investigation of the affairs of the 4th Respondent or any company under Section 315(1) and (2) of the Companies and Allied Matters Act, Cap C20 Laws of Federation of Nigeria, 2004 without first obtaining a court order?"

Arguing the sole issue, Appellant's counsel submitted that the Appellant when acting in the execution of its functions under section 7, particularly with regard to sections 197(1) and 315(2) of the Companies and Allied Matters Act (CAMA), does not require a court order to proceed. It is the submission of counsel that it is the duty of the court to give effect to an Act of Parliament in the words used by Parliament. He submitted that the provisions of section 314 and 315(2) of CAMA must be read together as the provisions clearly show that different circumstances are in contemplation of the legislator when those provisions were framed. It is the submission of counsel that section 314 provides for circumstances when the Appellant MAY undertake an investigation at the instance of or application by members of a company while section 315(1) deals with circumstances when the Appellant SHALL undertake an investigation by Order of a Court and section 315(2) deals with circumstances when the Appellant MAY undertake an investigation suo motu, "if it appears to it" that circumstances enumerated under paragraph (a) - (d) of that section exists. He cited OMOIJAHE v UMORU [1999] 8 NWLR (PT 614) 178 at 188; ONOCHIE v ODOGWU [2006] 6 NWLR (PT 675) 65 at 85, para B; ELABANJO v DAWODU [2006] 15 NWLR (PT 1001) 76 at 135, paras F - H to reiterate that the cardinal duty of any court of law in the interpretation of statute is to decipher the intention of the Legislature. He also cited LSDPC v ADEYEMI-BERO [2005] 8 NWLR (PT 927) 330 at 357 - 358, pars H - F; AUCHI POLY v OKUOGHALE [2005] 10 NLWR (PT 933) 279 at 293, paras F - H; OGIDI & 3 ORS v STATE [2005] 5 NWLR (PT 918) 286 at 327, para C - G as to the position of case law with regards to the words "MAY" and "SHALL". It is the submission of counsel that the use of words "SHALL" and "MAY" respectively in sections 315(1) and section 315(2) is clearly indicative of the intention of the legislature to create two scenarios of how the powers of the Appellant to appoint competent Inspectors for the purpose of investigation a company may be exercised. Counsel finally contended that the learned trial judge erred when it held that the Appellant has failed to meet the threshold required for the court order in respect of relief 3.

Responding, Counsel for the 1st Respondent submitted that the trial Judge was right in refusing the 3rd relief of the Plaintiff/Appellant's claim based on the provision of section 315 (1) and (2) of CAMA. He submitted that by the said provision of CAMA, the Plaintiff/Appellant is empowered to appoint one or more inspectors to investigate the affairs of a company where the court having the appropriate jurisdiction declares that the company's affairs ought to be investigated by an inspector appointed by the Plaintiff/Appellant. He contended that it is only where a court order has been obtained against the particular company that an inspection may

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be ordered by the Plaintiff/Appellant. He submitted that Section 315 (2) cannot be construed in isolation from Section 315 (1). He cited U.B.N, v. FAJEBE FOODS LTD (1998) 6 NWLR Pt. 554, Pg. 380 at 401 -402; TIDEX (NIG) LTD v. NUPENG (1998) 11 NWLR Pt. 573 Pg. 263 at 277. He submitted that where the language of a statute is clear and unambiguous, the courts must give the words their ordinary meaning.

He referred to VICTOR ADEGOKE ADEMUMI & ANOR v. ATTORNEY GENERAL OF EKITI STATE & 6 ORS [2002] 2 NWLR (Pt. 751) Pg. 474 at 512; OJOKOLOBO v. ALAMU [1987] 3 NWLR (Pt. 61) 379; COTECNA INT. LTD v. IVORY MERCHANT BANK [2006] 4 SC (Pt. 1) Pg. 1 at 8. He submitted that there was no evidence contained in the Plaintiff/Appellant's Affidavit in support of the originating Summons that a Court order has been sought and obtained in respect of the inspection that is been sought by the Plaintiff/Appellant or that any of the special circumstances mentioned in Section 315 (2) of CAMA has taken place.

He further submitted that allowing the Plaintiff/Appellant or any other body not empowered/authorized by law to investigate the loan transactions between the 1st Respondent and any company would amount to breach of banker/customer confidentiality; that the bank owes an implied duty to its customers not to divulge information about its customers to a third party, and that such disclosure can only be done with the authorization account holder and also under specific circumstance. He relied on JACKSON v. ROYAL BANK OF SCOTLAND (2005) UKHL 3; TOURNIER v. NATIONAL PROVINCAL & UNION BANK OF ENGLAND (1924) 1 KB 461; TURNER v. ROYAL BANK OF SCOTLAND PLC (1999) 2 All ER (Comm) 664 to submit that there is no Court order that places an obligation to disclose on the 1st Respondent, and there is no section of CAMA that empowers/authorizes the Appellant to inspect the loan books of the 1st Respondent. Counsel urged the Court to dismiss the appeal.

Submitting arguments on the sole issue, learned counsel for the 2nd Respondent contended that the powers vested in the Appellant are not at large, they are to be exercised within limited circumstance/scope. Counsel submitted that section 315 (2) of CAMA cannot be construed in isolation of section 315 (1) of the same Act, that there is a legislative presumption in favour of the fact that a Section of an enactment deals with the same and not different issues. He relied on SUNDAY v. INEC [2009] 12 NWLR (Pt. 1154) 194; RIVERS STATE GOVT. v. SPECIALIST KONSULT [2005] 7 NWLR (Pt. 923) 145 at 179, Para E-F; NPA PLC v. LOTUS PLASTIC LTD [2005] 19 NWLR (Pt. 959), 199, Para F-H; ABACHA v. FRN [2006] 4 NWLR (Pt. 790) Pg. 239 at 294, Para A-B to submit that the learned trial Judge rightly construed Section 315 (1) & 315 (2) of CAMA conjunctively with the result that the Appellant has no independent power to appoint an investigator/inspector without prior order of the Court and that the Appellant was precluded from approaching the 2nd Respondent for information on the charges/securities created by the 2nd Respondents' Customers. Learned counsel submitted that there is a presumption against concurrent vesting of powers of appointment in two separate bodies/organs simultaneously and that there can be no concurrent power of appointment of investigator vested in the Appellant and the Court simultaneously. He referred to JABRE v. JABRE [1990] 3 NWLR (Pt. 596) 606 at 619, Para C-E; ABACHA v. FRN [2006] 4 NWLR (Pt. 970) Pg. 239 at 309; IBRAHIM v. SHERIFF [2004] 14 NWLR (Pt. 892) 43 at 66, Para. D-E; OJUKWU v. OBASANJO [2004] 12 NWLR (Pt. 886) 169 at 209-210, Para H-B to submit that a literal interpretation of statutes must be avoided where it will lead to manifestly absurd results such as in this case where there will be two independent appointing bodies. The 2nd Respondent further submits that the issue at stake touches on the privacy of various companies and the substance of confidentiality. It is their contention that the confidentiality of transactions is the cornerstone of the relationships between the Respondent and her customers, and that the confidentiality is guaranteed by the Constitution, Statute, and Common law and that clear words which are devoid of ambiguities are required to take away these rights. Counsel relied on C.S.S. BOOKSHOPS LTD v. V R.T.M.C.R.C. [2006] 11 NWLR (Pt. 992) 530 at 577, Para E-G; DIN v. FEDERAL ATTORNEY-GENERAL [1988] 4 NWLR (Pt. 87) 147 at 148; OKARA v. NDILI [1989] 4 NWLR (Pt. 118) 700 at 711.

It was further submitted by Counsel that the Appellant acted ultra vires its powers when it embarked on investigation of 2nd Respondents' corporate customers and invariably the 2nd Respondent without fully complying with the letters and spirit of Section 315 (2) of CAMA, and that Section 315 (1) can only be utilized to investigate a particular/specific company and not to investigate many nameless corporate customers of the 2nd Respondent. He relied on OLORUNFEMI v. NED LTD [2003] 5 NWLR (Pt. 812) 1; INCAR (NIG) LTD PLC v. BOLEX ENT (NIG) [2001] 12 NWLR (Pt. 728) 646 at 680-681, Para H-B to submit that the Appellant acted ultra vires section 315 and that the drone of a power must at all times act intra vires. Counsel argued that the denial of the nation and the Appellant of revenue as deposed to in paragraph 3(f) of the Appellant's affidavit is not one of the grounds for appointment of investigators/inspectors under CAMA, and that the decision of the trial Court is justified on the ground of non-joinder of the affected Companies that are customers of the 2nd Respondent against who disclosures were sought by the Appellant in the Court below thus rendering the claim of the Appellant's claim incompetent and improperly constituted . Learned Counsel relied on NCC v. MTN [2008] 7 NWLR (Pt. 1086) 258, Para C-D; A.D. v. INEC (2003) LPELR-12445 CA to submit that where an action/relief is incompetent, the court ought to dismiss/strike it out. This Court is urged to dismiss this appeal.

On behalf of the 3rd Respondent, counsel submitted that where a statute provides that before a statutory power is exercised certain conditions must be satisfied, that power cannot be exercised unless those conditions have been satisfied, and that where a statute prescribes a particular method of exercising a statutory power, only that method should be adopted. He referred to AROWOLO v. ADESINA [2011] 2 NWLR (Pt. 1231) 315; APAPA v. INEC [2012] 8 NWLR (Pt. 1303) 409; CAC v. RTCCC [2009] 11 NWLR (Pt. 1151) 40; AGODA v. EMANUOTOR [1999] 8 NWLR (Pt. 615) 407; AUCHI POLY v. OKUOGHAE [2005] 10 NWLR (Pt. 933) 297 at 291-292 to submit that the Appellant is required to obtain an order of Court for it to obtain the requested information from the 3rd Respondents and that there is no Court order directing that the affairs of the 3rd Respondent should be investigated pursuant to which the Appellant can appoint inspectors to investigate the affairs of the 3rd Respondent.

Learned counsel submitted that where the words of a statute are clear and unambiguous, the court must give them their ordinary and plain meaning and that the courts are not entitled to read into a statute words which are expressly or impliedly excluded from it. He cited ORAKUL RESOURCES LTD v. NCC [2007] 16 NWLR (Pt. 1060) 270; BUHARI v. OBASANJO [2005] 13 NWLR (Pt. 941) 1; A.G ABIA STATE v. A.G. FEDERATION [2005] 12 NWLR (Pt 940) 452; RE: MBAMADU [2001] 18 NWLR (Pt. 744) 143 and BEWAJI v. OBASANJO [2008] 9 NWLR (Pt. 1093) 540
Learned counsel relied on SAUDE v. ABDULAHI [1989] 4 NWLR (Pt. 116) 387; FCMB v. ABIOLA & SONS LTD. [1991] 1 NWLR (Pt. 165) 14; CHUKWUGOR v. CHUKWUGOR [2006] 7 NWLR (Pt. 979) 302 to submit that by section 314 of CAMA, the Appellant cannot exercise its power of appointment of the inspectors over the affairs of the 3rd Respondent unless an application by the 3rd Respondent itself or by its members holding not less than one-quarter of the class of shares issued have been made to the Appellant, and this is not the case here. Counsel further submitted that Section 315 (1) and Section 315 (2) of CAMA cannot be read disjunctively or in isolation but as a whole and that the Court cannot make an order unless and until the circumstances enumerated under section 315 (2) of CAMA has been satisfied. He referred to A.G. KWARA STATE v. ABOLAJI [2009] 7 NWLR (Pt. 1139) 199; ABUBAKAR v. NASAMU (No. 2) [2012] 17 NWLR (Pt. 1330) 532.

Responding on the sole issue, 4th Respondent's Counsel submitted that section 315 of CAMA does not give the Appellant a legal or statutory right to demand or request an investigation of the nature being canvassed by the Appellant but rather enjoins the Appellant to apply for an Order of Court where it has been able to prove or give evidence that any of the instances listed under section 315 (2) exist. Learned counsel submitted that the 4th Respondent has discretion and not an obligation by law, to register the particulars of a charge created by any of its customers. Counsel cited SUNDAY EQUAMWENSE v. JAMES I. AMAGHIZEMWEN [1993] 9 NWLR (Pt. 315) 1 at 23 to submit that where a statute has prescribed a remedy for a certain inaction, or infraction that is the only remedy that is available for the alleged infraction of the statute. Counsel referred to C.A.C. v. DAVIS [2008] 1 NWLR (Pt. 1067) C.A. 60 at 77 Para D; OBI v. INEC [2007] 11 NWLR (Pt. 1046) S.C. 565 at 558 Para A-G to submit that where an issue in a statute is governed by a general provision and a specific provision, the latter will be invoked in the interpretation of the statute before the court. Counsel cited OVIAWE v. I.R.P (NIG) LTD [1997] 3 NWLR (Pt. 492) Pg. 126 at 139; UGWENYI v. NICON INSURANCE PLC [2004] 15 NWLR (Pt. 897) Pg. 612 at 618 to submit that where the provisions of a state are clear and unambiguous, the court must give those provisions their literal and ordinary interpretation. Counsel submitted that the 4th Respondent is bound to observe strict confidentiality between it and its customers. He urged the court to hold that this Appeal is grossly incompetent and lacks merit.

On his part, the 5th Respondent's counsel also submitted that the Appellant cannot carry out any investigation of its affairs or that of any other company without first obtaining a Court order pursuant to Section 315 (1) and (2) of CAMA. Counsel also submitted that Sections 7, 197, 198, and 315 - 322 of CAMA must be read together to enable the Court arrive at a just interpretation of these sections. Learned counsel contended that where provisions of statute on an issue carry both general and specific provisions, the specific provision will be had recourse to. He cited COTECNA INT'L LIMITED V. CHURCHGATE (NIG.) LIMITED; OBIUWEUBI V. C.B.N (2011) 7 NWLR (PT.1247) 465; MUDASIRU V. ABDULLAHI (2011) 7 NWLR (PT.1247) 591; CAC V. DAVIES (2008) 1 NWLR (PT.1067) 60 AT 77 PARAS C-E;

Counsel submitted that Appellant misinterpreted the law when it argued that the decision to investigate under Section 315 (2) (a) -(d) of CAMA is the commission's and not the Court. It is his contention that the whole section must be read together. On the authorities of ADESOLA V. ABIDOYE (1994) 14 NWLR (PT.637) 28; ADEWUNMI V. OVERNOR OF ONDO STATE (1996) 8 NWLR (PT. 464) 73 AT 116 counsel reiterated the submission that an Order of Court under Section 315(1) CAMA is a condition precedent for the Appellant to do any of the things under Section 315 (2) of CAMA. Counsel therefore urged this Court to dismiss this appeal since the Appellant have not complied with the mandatory requirement of obtaining Court order.

Counsel for the 6th Respondent opened his argument by submitting that the trial Court was right in striking out Relief 3 of the Plaintiff/Appellant's claim. It is the firm submission of counsel that the 6th Respondent is bound to observe confidentiality between it and its customers since the Plaintiff/Appellant failed to obtain a Court Order. He cited the cases of TURNER V. ROYAL BANK OF SCOTLAND PLC (1999) 2 ALL ER (COMM.) 664; HABIB (NIG.) BANK PLC V.KOYA (1992) 7 NWLR (PT.251) 43; TOURNIER V. NATIONAL PROVINCIAL BANK & UNION BANK OF ENGLAND (1924) 1 KB 461.

It is the contention of counsel that the 6th Respondent has no obligation under the Companies and Allied Matters Act (CAMA) to disclose information of transactions between it and all its customers when the customers are not under investigation by inspectors duly appointed by the Plaintiff/Appellant; that the 6th Respondent's obligation to disclose such confidential information can only arise when the Plaintiff/Appellant has appointed inspectors to investigate the affairs of an identified company which company must be a customer of the 6th Respondent and such inspectors need further clarification on the register of the Company. Counsel submitted that the 6th Respondent will be in breach of its confidentiality obligation with its customers/companies (both private and public companies) if it divulges any information about its customers without their consent or a Court order. He referred to Section 315 (2) CAMA; JACKSON V. ROYAL BANK OF SCOTLAND PLC (2005) 2 ALL ER 71. Counsel further submitted that the 6th Respondent is not an agent of companies to which it lends money upon registrable charge over the assets of such companies. The agency relationship implied by law between the 6th Respondent and its customers is only limited to their banker/customer relationship. He cited YESUFU V. AFRICAN CONTINENTAL BANK (1982) 1 SC 74 AT 92; ANGYU V. MALAMI (1992) 9 NWLR (PT.246) 242.

Counsel relied on Sections 7, 197, 199, and 315 - 322 of CAMA to submit that the Appellant cannot by itself or through its appointed inspectors demand for the information on loan transactions and documentation between 6th Respondent and its corporate customers suo motu without a Court Order or consent of the shareholders of a company. It is the submission counsel that Section 315 (2) of CAMA must be read in conjunction with 315(1) of CAMA and that CAMA does not give the Appellant power to investigate the affairs of 6th Respondent without a Court Order as provided in Section 315 (1) under the circumstances in section 315 (2) of the Act. The Appellant must first obtain a Court order before any information concerning its customers can be released to it. He also urged that this appeal be dismissed.

The discussion of the sole issue in this appeal no doubt rest on the construction of the effect of certain provisions of the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria, 2004, particularly sections 314 and 315 thereof.
Section 314 states:

(1) The Commission may appoint one or more competent inspectors to investigate the affairs of a company and to report on them in such manner as it may direct.
(2) The appointment may be made
(a) in the case of a company having a share capital on the application of members holding not less than one-quarter of the class of shares issued;
(b) in the case of a company not having a share capital, on the application of not less than one-quarter in number of the persons on the company's register of members; and
(c) in any other case, on application of the company.

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(3) The application shall be supported by such evidence as the Commission may require for the purpose of showing that the applicant or applicants have good reason for requiring the investigation.

Section 315 on the other hand provides:

(1) The Commission shall appoint one or more competent inspectors to investigate the affairs of a company and report on them in such manner as it directs, if the court by order declares that its affairs ought be so investigated.
(2) The Commission may make such an appointment if it appears to it that there are circumstances suggesting that
(a) the company's affairs are being or have been conducted with intent to defraud its creditors or the creditors of any other person, or in a manner which is unfairly prejudicial to some part of its members; or
(b) any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial, or that the company was formed for any fraudulent or unlawful purpose; or
(c) persons concerned with the company's formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards it or towards its members; or
(d) the company's members have not been given all the information with respect to its affairs which they might reasonably expect.
(3) Subsections (I) and (2) of this section shall be without prejudice to the powers of the Commission under section 322 of this Act and the power conferred by subsection (2) of this section, shall be exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.
(4) Reference in subsection (2) of this section to a company's members includes any of the following persons.
(a)      the personal representatives of a deceased member; and
(b) any person to whom shares have been transferred or transmitted by operation of law.

At pages 417 of the record, the learned trial judge held:

"In my view, following the provisions of Sections 314 - 315 and 317 of CAMA, the Law provides only 2 instances upon which the Plaintiff can appoint inspectors as follows:-
a. Section 314 of CAMA deals with the circumstances when the investigation may be undertaken by the Commission at the instance of a Company or certain class of its members.
b. Section 315 deals with when investigation shall be undertaken upon the direction of a Court.
In my view, Section 315(2) does not vest any power on the Plaintiff to undertake an investigation suo motu."

Furthermore, at page 426 to 427 of the record, he further held:

"I have stated earlier and I wish to repeat that Section 315(2) CAMA does not give the Plaintiff the power to investigate the affairs of Companies suo motu. Investigation under Section 315(2) shall only be undertaken upon the directors of the Court as provided in Section 315 (1) CAMA. Section 315(2) states the circumstances in which the Commission may make such an appointment...
It is clear that before the Plaintiff can seek an order under Section 315(1), it must that any one of the circumstances in Section 315(2) exists. It is only after a Court order has been obtained against the particular company that an inspection may be ordered."

The question then is whether the learned trial judge was right in his interpretation of section 315 and 316 of the Act.

My Lords, it is settled that the duty of the court to interpret the provisions of a statute in the clear tenor of the words contained in it. In KRAUS THOMPSON ORG. v. N.I.P.S.S [2004] 17 NWLR (PT 901) 44; (2004) LPELR - 171 (SC) pp. 11 - 12, paras G - B, the Supreme Court, per TOBI, JSC held:

"By the doctrine of separation of powers, it is the constitution function of the Legislature to make laws, including amendment and revocation and our duty in the judiciary is to interpret the amendment or revocation to achieve the intention of the Legislature. Where the intention of the Legislature is clear and unambiguous, courts of law must so interpret the provisions of the legislation. We cannot go outside the legislation in search for greener pastures for one of the parties.......”

Similarly, in ADESANOYE & ORS v ADEWOLE [2006] 14 NWLR (PT 1000) 242; (2006) LPELR - 143 (SC), 27, paras A - E, the learned Justice of the Supreme Court re-echoed:

"Where provision of a statute or rule of court is clear, the duty of the court is to interpret the clear provision by giving the plain wordings their ordinary interpretation without more. It is not the function of a court of law to sympathise with a party in the interpretation of a statute merely because the language of the statute is harsh or will cause hardship. That is not the Junction of the court. That is rather the Junction of the legislature.”

It is apparent therefore that in interpreting the provisions of section 314 and 315 of CAMA, the court should endeavour to construe the provisions in such a way as to discern the real intention of the draftsman.

Now, it is obvious from the provision of section 314(1), that the Appellant, that is, the Corporate Affairs Commission may appoint one or more competent inspectors to investigate the affairs of a company and to report on them in such manner as it may direct. Subsection (2) provides the instances (and upon whose application) the appointment may be made, that is, on application of members holding not less than one-quarter of the class of shares issued; on application of not less than one quarter in number of the persons on the company's register of member; and on application of the company. Subsection (3) prescribes that the application in subsection (2) shall be supported by such evidence as the Commission may require.

The provision of section 314 is clear on what it purports to relates to. While subsections (1) & (2) gives the Commission discretion as to the appointment of the inspectors, subsection (3) makes it mandatory that the application which MAY be considered by the Commission pursuant to subsection (2) SHALL be supported by any evidence that may be required by the Commission for the appointment of such inspectors. Evidently, the provision relates exclusively to powers conferred upon the Commission as to the appointment of inspectors. Therefore, no order of court is needed before inspectors will be appointed pursuant to section 314 of the Act.

With respect to section 315(1) of the Act, the Commission is granted similar power as under section 314(1) to investigate the affairs of a company. However, under section 315(1), the Commission must obtain order of court before such appointment will be made. Meanwhile, such order of the court must declare that the affairs of the company in question be so investigated. On the other hand, subsection (2) apparently gives the Appellant the discretion to appoint inspectors to investigate the affairs of a company in circumstances that falls under the paragraphs (a) to (d). Therefore, before the Appellant Commission can exercise the discretion granted unto it under subsection (2), it must be shown that either of the provision of paragraphs (a) to (d) had been satisfied.

I am inclined to agree with the learned counsel for the Appellant that there would not have been any need for the draftsman to include Sections 314(1) and 315(2) in the Act if the legislature intended strictly that the Appellant shall only undertake an investigation of a company incorporated under the Act pursuant to an order of court. While the use of the word 'SHALL' in section 315(1) presupposes the mandatory requirement of a court order by the Commission before it can appoint inspectors, the use of the word 'MAY' in section 314(1) and 315(1) presupposes the permissive discretion granted in favour of the Appellant subject to certain conditions prescribed thereunder.

To this extent, I must say that the argument put forward by the respective Respondents' counsel in their briefs to the effect that the Respondents are bound to observe strict confidentiality between it and its customers and that the trial court declined to grant any order in this regard because the Appellant's failed to meet the threshold required for the grant of the order is misconceived. Evidently, as stated above, the circumstances under section 315(2) are those the Act prescribes that the Commission consider in the exercise of the discretion conferred upon it thereon.

It is pertinent to say that provision with respect to the investigation of company's affairs under CAMA was made in order to ensure proper administration and management of the company. LORD DENNING in NORTHWEST HOLST v SECRETARY OF STATE FOR TRADE [1978] 3 ALL ER 280 apparently captured the background on the need for the appointment of inspectors for the investigation of companies, while construing section 165 of the United Kingdom Companies Act, 1948. The Learned Jurist stated emphatically that:

"It is important to know the background of the legislation. It sometimes happens that public companies are conducted in a way which is beyond the control of ordinary shareholders. The majority of the shares are in the hands of two or three individuals. These have control of the company's affairs. The other shareholders know little and are told little. They receive glossy annual reports. Most of them throw them into wastepaper basket. There is an annual general meeting but few shareholders attend. The whole management and control is in the hands of the directors. They are a self perpetuating oligarchy; and are virtually unaccountable. Seeing that the directors are the directors are the guardians of the company, the question is asked: quis custodiet ipsos custodies? Who will guard the guards themselves?"

I believe clearly that the essence of the specific and distinct provision of section 315(2) of CAMA it to allow the Appellant Commission as the regulatory body set up pursuant to section 7 of CAMA (through inspectors appointed) engage in what I deemed to be a "in house cleaning" of the company records and also decide the line of action to take, most especially in cases where there is deliberate and misleading information found as a result of the investigation. To construe the provision otherwise will result in rendering the commission as a toothless bulldog contrary to the intendment of the draftsman. The Appellant Commission is obviously a regulatory body empowered pursuant to section 7 of CAMA to carry out certain functions which shall be to:
a.. ...

b. ...
c. arrange or conduct an investigation into the affairs of any company where the interests of the shareholders and the public so demand:
d. perform such other functions as may be specified by any Act or enactment; and
e. undertake such activities as are necessary or expedient for giving full effect to the provisions of this Act "{Underline Mine)

In the light of the above provision, a contrary interpretation of section 315(2) will do violence to the clear functions of the commission towards achieving the purpose for which it was established under the Act. I am of the firm view that the Respondents' objection to the exercise of the Appellant's power under section 315 is as Lord Denning MR echoed in WALLERSTEINER v MOIR [1974] 3 ALL ER 217 at 293, unfounded as "they are made so as to delay the inquiry or to lessen the effects of the report of the inspectors." Section 315(2) of the Act is the only means by which the Appellant may, on its own volition, though subject to paragraphs (a) to (d), exercise part of its regulatory power under the Act by appointing inspectors to investigate the affairs of companies. It is of no moment for the Respondents to argue on the basis of confidentiality of its customers as the Act has clearly made provision backing the exercise embarked upon by the Appellant. A fortiori, registration of charges with the Appellant by companies under section 197 as well as other like registrations under the Act undoubtedly renders the record of charges a public document, and what the Commission through the inspectors may in essence do will be to ascertain the correctness and authenticity of the records at its disposal.

My Lords, the summary of the above construction of the combined provision of section 314 and 315 of the Companies and Allied Matters Act is that there are three ways and manner by which inspectors who are saddled with the responsibilities of investigating the affairs of a company. These include: (1) Appointment of inspectors on application of members of a company or the company itself under section 314(2); (2) Appointment of inspector(s) by order of court under section 315(1) and; (3) Appointment of inspector(s) by the Commission on its own motion (that is, the Appellant) under section 315(2). See J. OROJO, Company Law and Practice in Nigeria, 5th Edition, LexisNexis  Butterworths,  2008,  p.  221.   See  also J.E.O. ABUGU, in

PAGE| 18

Principles of Corporate Law in Nigeria, Lagos: MIJ Professional Publishers Limited, 2014, 659 - 660

This is a logical construction of the provisions of section 314 and 315, as any contrary interpretation will lead to the obfuscation of the intention of the draftsman. I am therefore of the firm view that the conclusion reached by the trial court is radically inconsistent with the intention of the legislature as per the extant provisions of the Act.

Having regard to the foregoing, the sole issue in this appeal is resolved in favour of the Appellant.

On the whole, the Appellant's appeal is meritorious and is hereby allowed. The judgment of IDRIS, J delivered on 18th day of March, 2013 is hereby set aside. By virtue of the power conferred upon this court under section 16 of the Court of Appeal Act, the Respondents/Defendants are hereby ordered to comply with the inspection exercise schedule of the Appellant/Plaintiff by supplying the information sought by the Appellant/Plaintiff, as per relief 3 of Appellant's Originating Summons dated 6th day of November, 2012.

5th RESPONDENT’S NOTICE

5th Respondent had filed a Notice of Intention to Contend that Judgment of the Trial Court be affirmed on grounds other than those relied on by the court below. Same is dated 6th of August, 2013 but deemed properly filed on 25th February, 2015 on two grounds thus:

"GROUND 1
Since it was common ground between the Appellant and the 5th Respondent that the 5th Respondent is an agent of a disclosed principal (that is the 5th Respondent's various customers who have created charges on their properties), the Learned Trial Judge ought not to have held that by a combined reading of Sections 107 - 199 of the Companies and Allied Matters Act, the 5th Respondent qualifies as a person interested in creating a charge and therefore under secondary obligation to ensure compliance with the Act. GROUND 2

The reasoning of the learned Trial Judge stands the age-long accepted principle of Agency Law that the agent of a disclosed principal is not liable for the acts or omissions of the Principal on its head."

The sole issue for determination as formulated by the 5th Respondent is:

"Whether by virtue of the Appellant's admission at the court below that paragraph 3 (i) of the affidavit in support of its 1st Amended Originating Summons (page 191 of the record) that the 5th Respondent is merely an agent of any company which creates a charge in its (5th Respondent's) favour, the Appellant can request for information from the 5th Respondent about its disclosed Principal"

Arguing the sole issue, 5th Respondent Counsel submitted as per Section 199 of CAMA that the 5th Respondent or any person so interested, that the agent of a company who has created a charge over its assets can elect, by an application to the commission, to register such charge. That the Appellant conceded in paragraph 3(i) of Affidavit in support of 1st Amended Originating Summons at page 191 of the Record that the Respondents are agents of the various companies who may have created charges over their assets in favour of the Respondents. Relying on OSIGWE V. PSPLS MANAGEMENT CONSORTIUM LIMITED (2009) 3 NWLR (PT.1128) 378 AT 399 - 400 PARAS F-A, 405 PARA A, counsel submitted that the 5th Respondent cannot in law be liable for the actions of the disclosed principles who are registered companies registered by and under the supervision of the Appellant. Counsel copiously quoted from the decision of OSIGWE v. PSPLS (Supra) to contend that by virtue of section 199 CAMA, the Act uses the word 'shall' in relation to the obligation of the company creating a charge to send particulars of the charge to the commission for registration but later used the word 'may' on the registration of such charge on the application of any person interested therein. 5th Respondent submitted that the Act does not place any obligation on the person so interested in the charge. Thus, that the provision for registration of charge by a person interested is merely directory and advisory. Relying on DAUDU V. UNAM (2002) 17 NWLR (PT.796) 362 AT 384; COTECNA INTL LTD V. CHURCHGATE (NIG.) LTD (2010) 18 NWLR (PT.1225) 346 AT 383, counsel submitted that this Court should give these words their ordinary meaning. In all, he finally concluded that the Appellant cannot request for information from the 5th Respondent about its disclosed principal while taking steps to conduct an investigation under Section 315 (20) of CAMA. He urged this Court to dismiss this appeal and award costs against the Appellant in favour of 5th Respondent.

In its Reply Brief, Appellant through his counsel argued that this issue is misconceived and incompetent and also that the submissions thereunder are substantively insupportable.

Counsel argued that the issue of agency based on OSIGWE's CASE was raised by the 5th Respondent at the Court below and same was decided against the 5th Respondent. It is the submission of counsel that section 317(1), (2), (3) & (4) of CAMA created the 5th Respondent a statutory agent of any company with which the Respondent executes any charge registerable under section 197 of CAMA; that in the peculiar circumstances of this case, where it is sought to saddle the 5th Respondent with liability under section 317(1) (a) - (c) of CAMA, by virtue of Section 317(4) of CAMA, the 5th Respondent is a necessary party to the action especially in view of the order sought from the court to direct the 5th Respondent to comply with section 317(l)(a) - (c) of CAMA on pain of punishment for contempt of court. He cited A.G. LAGOS STATE v A.G. FEDERATION & ORS (2003) 6 SCNJ 1 to submit that non-parties to a suit must not suffer any relief to be given against them. He argued that the any borrower company with which the 5th Respondent executes registerable charges with, have no obligation under section 317(1), (2), (3) & (4) of CAMA.

I believe the resolution of the instant issue revolves around the status of the 5th Respondent as agent of a borrower company vis a vis its liability as such with respect to circumstances of the
instant appeal. I must say as a preliminary point that the question of the Appellant being an agent of a borrower company was extensively treated by the learned trial judge in his judgment, particularly with respect to section 317 of CAMA. Meanwhile, as it relates to the instant issue, the learned trial judge held at pages 412-413 thus:

"It is now clearly beyond dispute that from a combined reading of Sections 197, 198 and 199 that all particulars of charges including the instruments by which such charges were created. If any, are required by law to be submitted to the Plaintiff for registration. The obligation to so submit to the Plaintiff for registration is imposed on the company creating the charge primarily and, secondarily on any other "person interested" therein.

It will clearly be absurd to imagine that the various Banks, who as Creditors to the Companies creating the charges envisaged by this Act and therefore more often than not parties or signatories to the "instruments by which charges are created" will not qualify as "person interested therein" and therefore under secondary obligation to ensure compliance with the mandatory provision of the Act for such registration. What is more, the reality of practice is that these Banks, as Creditors under the instrument creating the charges are joint custodian of the instruments creating the charge.

As Parties to the Charges envisaged under Section 197 of the Act by reason of being creditors to the Companies creating the charges, I agree that the Banks qualify as persons interested in the charges and therefore bound, albeit as a secondary obligation, to ensure that such charges comply with the mandatory requirement of law. The Banks and particular all the Defendants herein ought to perceive themselves as public institutions with a public duty to ensure compliance with statutory provisions such as provided in Section 197. To argue that the obligations is exclusively that of the companies creating the charge is whit greatest respect an act of irresponsibility as a corporate citizen and one which strikes as a deliberate attempt to aid and abet gross infraction of a mandatory provision of the law, should our court allow this, then an end has come to corporate responsibility and respect to extant laws....”

The 5th Respondent's counsel is urging us to vary the above reproduced portion of the judgment and hold that by virtue of its being an agent of the borrower company as per section 199 of the Act, it cannot be liable for the actions of the borrower company, who is a disclosed principal under that section. Section 199(1) of CAMA states:

"It shall be the duty of a company to send to the Commission for registration, the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under section 197 of this Act, but registration of any such charge may be effected on the application of any person interested therein.”

The above provision of the Act is clear and ought not to generate any controversy or diverse interpretation. The Act clearly makes it a mandatory duty of a company creating a charge to register same with the Appellant Commission. With the use of the word "shall", there is an ascription of a mandatory obligation on any such company creating a charge pursuant to section 197 of the Act to ensure that same is registered. The section however ascribed a discretionary or directive duty on such other persons who may be interested in the charges so created to ensure registration with the Appellant. This, I believe is the plain, simple and unambiguous intention of the draftsman.

It has been said, as a matter of fact and law that the primary duty of a judge is to expound and not to expand the law. In any case, the fundamental duty of the court is to bring to the fore, the intention of the legislature as expressed in a statute and nothing more. In AMAECHI v. INEC [2008] 5 NWLR (PT 1080) 227 SC; (2008) LPELR - 446 (SC), MOHAMMED, JSC stated.

"It is certainly not the duty of a Judge to interprete a statute to avoid its consequence. The consequences of a statute are those of the legislature, not the Judge. A Judge who regiments himself to the consequences of a statute is moving outside the domain of statutory interpretation. He has by that conduct engaged himself in morality which may be against the tenor of the statute and therefore not within his judicial power."

Similarly, GALADIMA, JSC reiterated in AROMOLARAN v. AGORO (2014) LPELR - 24037 (SC) p. 25, paras. B - F, thus:

"I must say that the duty of the court is to interprete the words contained in the statute and not to go outside the clear words in searching of an interpretation which is convenient to the court or to the parties in the process of interpretation. The court will not embark on a voyage of discovery. Where a statute is clear and unambiguous, as this case, this court will follow the literal rule of interpretation where the provision of the statute is clear and no more. In the case of ADEWUNMI v. A.G. EKITI STATE (2002) 2 NWLR (Pt. 751) 474, WALI JSC said at page 512: "In cases of statutory construction the court's authority is limited. Where the statutory language and legislative intent are clear and plain, the judicial inquiry terminates there."

It is instructive to note that while the conclusions by the learned trial judge that the 5th Respondent is a person interested in the charges created by companies that are his customers remain unassailable; the learned trial judge, however, with respect, erred when he held that the Act places a mandatory obligation, albeit secondary, on the 5th Respondent to comply with the provision of section 197(1) of the Act. This is not a correct interpretation of that section. As section 197(1) has stated that "registration of any such charge MAY be effected on the application of any person interested therein", the court's duty in this regard is to interprete strictly the clear provision of the section which gives the 5th Respondent a discretion on matters provided thereunder.

My Lords, the above however is not the end of the matter herein as the above interpretation of the provision of section 197(1) is not exclusive to the resolution of the issues at hand.

To this extent, I am inclined to agree with the Appellant's counsel and this is also clear from the issues joined, submissions made as well as the judgment of the trial court that the question of agency of the 5th Respondent in the particular context of this case does not solely arise from section 199(1) of CAMA. While the 5th Respondent's counsel's argument with respect to its status as agent under section 199(1) is unassailable, he however missed the point when he attempted to ascribe the interpretation and effect of the 5th Respondent's status as agent of a borrower company under that section vis a vis its status under section 317 of CAMA which states:

(1) When an inspector is appointed under section 314 or 315 of this Act, it shall be the duty of all officers and agents of the company, and of all officers and agents of any other body corporate whose affairs are investigated under section 316 of this Act –
(a) to produce to the inspector all books and documents of or relating to the company or, as the case may be, the other body corporate which are in their custody or power;
(b)  to attend before the inspector when required to do so; and
(c) otherwise to give the inspector all assistance in connection with the investigation which he is reasonably able to give.

(2) If the inspector considers that a person other than an officer or agent of the company or other body corporate is or may be in possession of information concerning its affairs, he may require that person to produce to him any books or documents in his custody or power relating to the company or other body corporate, to attend before him and otherwise to give him all assistance in connection with the investigation which he is reasonably able to give; and it is that person's duty to comply with the requirement.
(3) An inspector may examine on oath the officers and agents of the company or other body corporate, and any such person as is mentioned in subsection (2) of this section in relation to the affairs of the company or other body, and administer an oath accordingly.
(4) In this section, a reference to officers or to agents includes past, as well as present, officers or agents (as the case man be): and "agents" in relation to a company or other body corporate, includes its bankers and solicitors and persons employed by it as auditors, whether these persons are or are not officers of the company or other body corporate.
(5) An answer given by a person to a question put to him in exercise of powers conferred by this section (whether as it has effect in relation to an investigation under any of sections 314 to 316 of this Act as applied by any other section in this Act) may be used in evidence against him."

It is apparent from the construction of subsection (1) of section 317 reproduced above that the officers and agents of a company under investigation are under a mandatory obligation to accede to any request made by such investigating inspector pursuant to paragraph (a) to (c). The obligation as such rests on the officers and agents of the company and by virtue of subsection 4, reference to 'agents' as done under subsection (1) includes the bankers of a borrower company, as in the 5th Respondent in the instant case.

It is as a result of the foregoing that I agree with the Appellant's counsel that the principle of agency as discussed by the Supreme Court in the case of OSIGWE v PSLS MGT CONSORTIUM LTD (supra) does not apply to the instant case. Apparently, the instant case seeks judicial interpretation of statutory provisions relating to the determination of the specific question as to whether the 5th Respondent, a bank) and agent of a disclosed principal as argued by 5th Respondent's counsel) is exempted from discharge of statutory obligations as per section 317 of CAMA. I am therefore of the view and hereby hold that the Appellant can request for information from the 5th Respondent about its disclosed Principal, a borrower company.

This issue is resolved against the 5th Respondent.

In the final analysis, the 5th Respondent's Notice of intention to contend that the judgment be affirmed on grounds other than those relied on by the lower court lacks merit and is hereby dismissed. The part of the judgment of IDRIS, J delivered on 18th day of March, 2013 upon which the Respondent's Notice was filed is hereby affirmed. No order as to costs.

SAMUEL CHUKWUDUMEBI OSEJI: My lord A.O. OBASEKI-ADEJUMO JCA has afforded me the privilege of reading before now the lead judgment just delivered.

My lord has exhaustively addressed all the issues in contention and I am in agreement with the reasonings and conclusion contained therein.

I therefore have nothing extra to add. I hold that the appeal has merit and it is accordingly allowed.

I abide by the consequential orders made in the lead judgment including order as to cost.

SIDI DAUDA BAGE: I read in advance the judgment just delivered by my learned brother, ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA, and I agree with the reasoning contained therein and the conclusion arrived thereat. For the same reasons in the lead judgment I too hereby join my learned brother in holding that the 5th Respondent's Notice of intention to contend that the judgment be affirmed on grounds other than those relied on by the Lower Court lacks merit and is also hereby dismissed by me. The part of the judgment of IDRIS, J delivered on 18th day of March, 2013 upon which the Respondent's Notice was filed is hereby affirmed. No order as to costs.

Counsel

1. O. O. ADELEYE WITH O. V. IWEZE FOR APPELLANT
2. OYENIYI   SODIMU   WITH   C.N.    OMEKE   FOR 1st RESPONDENT
3. PROF. TAIWO OSIPITAN SAN WITH DAMILOLA SALISU FOR 2nd RESPONDENT
4. FRED ONUOBIA FOR 2nd RESPONDENT
5. AYOOLA AJAYI WITH JOHN EDAGIE AND FEMI IDOWU FOR 4th RESPONDENT
6. A. OLALERU WITH L. IBITAYO FOR 5™ RESPONDENT
7. EVELYN OBIOHA MISS WITH EHIOMA-UBEZE MISS. FOR 6th RESPONDENT.