FIRST DIVISION
G.R. No. 151908 August 12, 2003SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL), petitioners,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent.
x---------------------------------------------------------x
G.R. No. 152063 August 12, 2003
GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM), petitioners,
vs.
COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS COMMISSION, respondents.
YNARES-SANTIAGO, J.:
Pursuant to its rule-making and regulatory powers,
the National Telecommunications Commission (NTC) issued on June 16, 2000
Memorandum Circular No. 13-6-2000, promulgating rules and regulations
on the billing of telecommunications services. Among its pertinent
provisions are the following:
(1) The billing statements shall be received by the
subscriber of the telephone service not later than 30 days from the end
of each billing cycle. In case the statement is received beyond this
period, the subscriber shall have a specified grace period within which
to pay the bill and the public telecommunications entity (PTEs) shall
not be allowed to disconnect the service within the grace period.
(2) There shall be no charge for calls that are
diverted to a voice mailbox, voice prompt, recorded message or similar
facility excluding the customer's own equipment.
(3) PTEs shall verify the identification and address
of each purchaser of prepaid SIM cards. Prepaid call cards and SIM cards
shall be valid for at least 2 years from the date of first use. Holders
of prepaid SIM cards shall be given 45 days from the date the prepaid
SIM card is fully consumed but not beyond 2 years and 45 days from date
of first use to replenish the SIM card, otherwise the SIM card shall be
rendered invalid. The validity of an invalid SIM card, however, shall be
installed upon request of the customer at no additional charge except
the presentation of a valid prepaid call card.
(4) Subscribers shall be updated of the remaining value of their cards before the start of every call using the cards.
(5) The unit of billing for the cellular mobile
telephone service whether postpaid or prepaid shall be reduced from 1
minute per pulse to 6 seconds per pulse. The authorized rates per minute
shall thus be divided by 10.1
The Memorandum Circular provided that it shall take
effect 15 days after its publication in a newspaper of general
circulation and three certified true copies thereof furnished the UP Law
Center. It was published in the newspaper, The Philippine Star, on June
22, 2000.2 Meanwhile, the provisions of the Memorandum
Circular pertaining to the sale and use of prepaid cards and the unit of
billing for cellular mobile telephone service took effect 90 days from
the effectivity of the Memorandum Circular.
On August 30, 2000, the NTC issued a Memorandum to
all cellular mobile telephone service (CMTS) operators which contained
measures to minimize if not totally eliminate the incidence of stealing
of cellular phone units. The Memorandum directed CMTS operators to:
a. strictly comply with Section B(1) of MC 13-6-2000
requiring the presentation and verification of the identity and
addresses of prepaid SIM card customers;
b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC 13-6-2000;
c. deny acceptance to your respective networks
prepaid and/or postpaid customers using stolen cellphone units or
cellphone units registered to somebody other than the applicant when
properly informed of all information relative to the stolen cellphone
units;
d. share all necessary information of stolen
cellphone units to all other CMTS operators in order to prevent the use
of stolen cellphone units; and
e. require all your existing prepaid SIM card customers to register and present valid identification cards.3
This was followed by another Memorandum dated October 6, 2000 addressed to all public telecommunications entities, which reads:
This is to remind you that the validity of all
prepaid cards sold on 07 October 2000 and beyond shall be valid for at
least two (2) years from date of first use pursuant to MC 13-6-2000.
In addition, all CMTS operators are reminded that all
SIM packs used by subscribers of prepaid cards sold on 07 October 2000
and beyond shall be valid for at least two (2) years from date of first
use. Also, the billing unit shall be on a six (6) seconds pulse
effective 07 October 2000.
For strict compliance.4
On October 20, 2000, petitioners Isla Communications
Co., Inc. and Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy
Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay,
an action for declaration of nullity of NTC Memorandum Circular No.
13-6-2000 (the Billing Circular) and the NTC Memorandum dated October 6,
2000, with prayer for the issuance of a writ of preliminary injunction
and temporary restraining order. The complaint was docketed as Civil
Case No. Q-00-42221 at the Regional Trial Court of Quezon City, Branch
77.5
Petitioners Islacom and Piltel alleged, inter alia,
that the NTC has no jurisdiction to regulate the sale of consumer goods
such as the prepaid call cards since such jurisdiction belongs to the
Department of Trade and Industry under the Consumer Act of the
Philippines; that the Billing Circular is oppressive, confiscatory and
violative of the constitutional prohibition against deprivation of
property without due process of law; that the Circular will result in
the impairment of the viability of the prepaid cellular service by
unduly prolonging the validity and expiration of the prepaid SIM and
call cards; and that the requirements of identification of prepaid card
buyers and call balance announcement are unreasonable. Hence, they
prayed that the Billing Circular be declared null and void ab initio.
Soon thereafter, petitioners Globe Telecom, Inc and
Smart Communications, Inc. filed a joint Motion for Leave to Intervene
and to Admit Complaint-in-Intervention.6 This was granted by the trial court.
On October 27, 2000, the trial court issued a
temporary restraining order enjoining the NTC from implementing
Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6,
2000.7
In the meantime, respondent NTC and its co-defendants
filed a motion to dismiss the case on the ground of petitioners'
failure to exhaust administrative remedies.
Subsequently, after hearing petitioners' application
for preliminary injunction as well as respondent's motion to dismiss,
the trial court issued on November 20, 2000 an Order, the dispositive
portion of which reads:
WHEREFORE, premises considered, the defendants'
motion to dismiss is hereby denied for lack of merit. The plaintiffs'
application for the issuance of a writ of preliminary injunction is
hereby granted. Accordingly, the defendants are hereby enjoined from
implementing NTC Memorandum Circular 13-6-2000 and the NTC Memorandum,
dated October 6, 2000, pending the issuance and finality of the decision
in this case. The plaintiffs and intervenors are, however, required to
file a bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00),
Philippine currency.
SO ORDERED.8
Defendants filed a motion for reconsideration, which was denied in an Order dated February 1, 2001.9
Respondent NTC thus filed a special civil action for
certiorari and prohibition with the Court of Appeals, which was docketed
as CA-G.R. SP. No. 64274. On October 9, 2001, a decision was rendered,
the decretal portion of which reads:
WHEREFORE, premises considered, the instant petition for certiorari and prohibition is GRANTED, in that, the order of the court a quo denying the petitioner's motion to dismiss as well as the order of the court a quo granting
the private respondents' prayer for a writ of preliminary injunction,
and the writ of preliminary injunction issued thereby, are hereby
ANNULLED and SET ASIDE. The private respondents' complaint and
complaint-in-intervention below are hereby DISMISSED, without prejudice
to the referral of the private respondents' grievances and disputes on
the assailed issuances of the NTC with the said agency.
SO ORDERED.10
Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 for lack of merit.11
Hence, the instant petition for review filed by Smart
and Piltel, which was docketed as G.R. No. 151908, anchored on the
following grounds:
A.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT
THE REGULAR COURTS HAS JURISDICTION OVER THE CASE.
B.
THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN
HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE
ADMINISTRATIVE REMEDY.
C.
THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
THAT THE BILLING CIRCULAR ISSUED BY THE RESPONDENT NTC IS
UNCONSTITUTIONAL AND CONTRARY TO LAW AND PUBLIC POLICY.
D.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
THE PRIVATE RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO
WARRANT THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.12
Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the following errors:
1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED
BECAUSE THE DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF
ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGAL
NULLIFICATION (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OF A
PURELY ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY IN THE
EXERCISE OF ITS RULE MAKING POWERS AND INVOLVES ONLY QUESTIONS OF LAW.
2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED
BECAUSE THE DOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT
APPLY WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.
3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED
BECAUSE THE DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT
APPLY WHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHEN
THERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO SUFFER GRAVE AND
IRREPARABLE INJURY.
4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED
BECAUSE PETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES
AVAILABLE TO THEM.
5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN
ISSUING ITS QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE
A CLEAR RIGHT TO AN INJUNCTION.13
The two petitions were consolidated in a Resolution dated February 17, 2003.14
On March 24, 2003, the petitions were given due course and the parties were required to submit their respective memoranda.15
We find merit in the petitions.
Administrative agencies possess quasi-legislative or
rule-making powers and quasi-judicial or administrative adjudicatory
powers. Quasi-legislative or rule-making power is the power to make
rules and regulations which results in delegated legislation that is
within the confines of the granting statute and the doctrine of
non-delegability and separability of powers.16
The rules and regulations that administrative
agencies promulgate, which are the product of a delegated legislative
power to create new and additional legal provisions that have the effect
of law, should be within the scope of the statutory authority granted
by the legislature to the administrative agency. It is required that the
regulation be germane to the objects and purposes of the law, and be
not in contradiction to, but in conformity with, the standards
prescribed by law.17 They must conform to and be consistent
with the provisions of the enabling statute in order for such rule or
regulation to be valid. Constitutional and statutory provisions control
with respect to what rules and regulations may be promulgated by an
administrative body, as well as with respect to what fields are subject
to regulation by it. It may not make rules and regulations which are
inconsistent with the provisions of the Constitution or a statute,
particularly the statute it is administering or which created it, or
which are in derogation of, or defeat, the purpose of a statute. In case
of conflict between a statute and an administrative order, the former
must prevail.18
Not to be confused with the quasi-legislative or
rule-making power of an administrative agency is its quasi-judicial or
administrative adjudicatory power. This is the power to hear and
determine questions of fact to which the legislative policy is to apply
and to decide in accordance with the standards laid down by the law
itself in enforcing and administering the same law. The administrative
body exercises its quasi-judicial power when it performs in a judicial
manner an act which is essentially of an executive or administrative
nature, where the power to act in such manner is incidental to or
reasonably necessary for the performance of the executive or
administrative duty entrusted to it. In carrying out their
quasi-judicial functions, the administrative officers or bodies are
required to investigate facts or ascertain the existence of facts, hold
hearings, weigh evidence, and draw conclusions from them as basis for
their official action and exercise of discretion in a judicial nature.19
In questioning the validity or constitutionality of a
rule or regulation issued by an administrative agency, a party need not
exhaust administrative remedies before going to court. This principle
applies only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function, and not when the
assailed act pertained to its rule-making or quasi-legislative power. In
Association of Philippine Coconut Dessicators v. Philippine Coconut Authority,20 it was held:
The rule of requiring exhaustion of administrative
remedies before a party may seek judicial review, so strenuously urged
by the Solicitor General on behalf of respondent, has obviously no
application here. The resolution in question was issued by the PCA in
the exercise of its rule- making or legislative power. However, only
judicial review of decisions of administrative agencies made in the
exercise of their quasi-judicial function is subject to the exhaustion
doctrine.
Even assuming arguendo that the principle of
exhaustion of administrative remedies apply in this case, the records
reveal that petitioners sufficiently complied with this requirement.
Even during the drafting and deliberation stages leading to the issuance
of Memorandum Circular No. 13-6-2000, petitioners were able to register
their protests to the proposed billing guidelines. They submitted their
respective position papers setting forth their objections and
submitting proposed schemes for the billing circular.21 After the same was issued, petitioners wrote successive letters dated July 3, 200022 and July 5, 2000,23
asking for the suspension and reconsideration of the so-called Billing
Circular. These letters were not acted upon until October 6, 2000, when
respondent NTC issued the second assailed Memorandum implementing
certain provisions of the Billing Circular. This was taken by
petitioners as a clear denial of the requests contained in their
previous letters, thus prompting them to seek judicial relief.
In like manner, the doctrine of primary jurisdiction
applies only where the administrative agency exercises its
quasi-judicial or adjudicatory function. Thus, in cases involving
specialized disputes, the practice has been to refer the same to an
administrative agency of special competence pursuant to the doctrine of
primary jurisdiction. The courts will not determine a controversy
involving a question which is within the jurisdiction of the
administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of
sound administrative discretion requiring the special knowledge,
experience and services of the administrative tribunal to determine
technical and intricate matters of fact, and a uniformity of ruling is
essential to comply with the premises of the regulatory statute
administered. The objective of the doctrine of primary jurisdiction is
to guide a court in determining whether it should refrain from
exercising its jurisdiction until after an administrative agency has
determined some question or some aspect of some question arising in the
proceeding before the court. It applies where the claim is originally
cognizable in the courts and comes into play whenever enforcement of the
claim requires the resolution of issues which, under a regulatory
scheme, has been placed within the special competence of an
administrative body; in such case, the judicial process is suspended
pending referral of such issues to the administrative body for its view.24
However, where what is assailed is the validity or
constitutionality of a rule or regulation issued by the administrative
agency in the performance of its quasi-legislative function, the regular
courts have jurisdiction to pass upon the same. The determination of
whether a specific rule or set of rules issued by an administrative
agency contravenes the law or the constitution is within the
jurisdiction of the regular courts. Indeed, the Constitution vests the
power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts, including the
regional trial courts.25 This is within the scope of judicial
power, which includes the authority of the courts to determine in an
appropriate action the validity of the acts of the political
departments.26 Judicial power includes the duty of the courts
of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the
Government.27
In the case at bar, the issuance by the NTC of
Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6,
2000 was pursuant to its quasi-legislative or rule-making power. As
such, petitioners were justified in invoking the judicial power of the
Regional Trial Court to assail the constitutionality and validity of the
said issuances. In Drilon v. Lim,28 it was held:
We stress at the outset that the lower court had
jurisdiction to consider the constitutionality of Section 187, this
authority being embraced in the general definition of the judicial power
to determine what are the valid and binding laws by the criterion of
their conformity to the fundamental law. Specifically, B.P. 129 vests in
the regional trial courts jurisdiction over all civil cases in which
the subject of the litigation is incapable of pecuniary estimation, even
as the accused in a criminal action has the right to question in his
defense the constitutionality of a law he is charged with violating and
of the proceedings taken against him, particularly as they contravene
the Bill of Rights. Moreover, Article X, Section 5(2), of the
Constitution vests in the Supreme Court appellate jurisdiction over
final judgments and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.29
In their complaint before the Regional Trial Court,
petitioners averred that the Circular contravened Civil Code provisions
on sales and violated the constitutional prohibition against the
deprivation of property without due process of law. These are within the
competence of the trial judge. Contrary to the finding of the Court of
Appeals, the issues raised in the complaint do not entail highly
technical matters. Rather, what is required of the judge who will
resolve this issue is a basic familiarity with the workings of the
cellular telephone service, including prepaid SIM and call cards – and
this is judicially known to be within the knowledge of a good percentage
of our population – and expertise in fundamental principles of civil
law and the Constitution.
Hence, the Regional Trial Court has jurisdiction to
hear and decide Civil Case No. Q-00-42221. The Court of Appeals erred in
setting aside the orders of the trial court and in dismissing the case.
WHEREFORE, in view of the foregoing, the
consolidated petitions are GRANTED. The decision of the Court of Appeals
in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated
January 10, 2002 are REVERSED and SET ASIDE. The Order dated November
20, 2000 of the Regional Trial Court of Quezon City, Branch 77, in Civil
Case No. Q-00-42221 is REINSTATED. This case is REMANDED to the court a
quo for continuation of the proceedings.
SO ORDERED.
Davide, Jr., C.J., Vitug, and Carpio, JJ., concur.
Azcuna, J., took no part.
Azcuna, J., took no part.
Footnotes
1 Rollo, G.R. No. 151908, pp. 225-228.
2 Rollo, G.R. No. 152063, p. 112.
3 Rollo, G.R. No. 151908, p. 229.
4 Id., p. 230.
5 Id., pp. 231-247.
6 Id., pp. 248-270.
7 Id., pp. 271-273, at 273; penned by Judge Vivencio S. Baclig.
8 Id., pp. 274-277.
9 Id., p. 278.
10 Id., pp. 123-132, at 131-132; penned by
Associate Justice Rodrigo V. Cosico, concurred in by Associate Justices
Ramon A. Barcelona and Alicia L. Santos.
11 Id., pp. 134-136.
12 Id., pp. 23-24.
13 Rollo, G.R. No. 152063, pp. 14-15.
14 Id., pp. 389-390.
15 Id., pp. 391-392.
16 Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue v. Court of Appeals, 329 Phil. 987, 1017 [1996].
17 Romulo, Mabanta, Buenaventura, Sayoc
and De Los Angeles v. Home Development Mutual Fund, G.R. No. 131082, 19
June 2000, 333 SCRA 777, 785-786.
18 Conte, et al. v. Commission on Audit, 332 Phil. 20, 36 [1996].
19 Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue, G.R. No. 119761, 29 August 1996, supra.
20 G.R. No. 110526, 10 February 1998, 286 SCRA 109, 117.
21 Rollo, G.R. No. 152063, pp. 57-78.
22 Id., pp. 79-86.
23 Id., pp. 87-89.
24 Fabia v. Court of Appeals, G.R. No. 132684, 11 September 2002.
25 Spouses Mirasol v. Court of Appeals, G.R. No. 128448, 1 February 2001, 351 SCRA 44, 51.
26 Santiago v. Guingona, Jr., G.R. No. 134577, 18 November 1998, 298 SCRA 756, 774.
27 CONSTITUTION, Art. VIII, Sec. 1, second paragraph.
28 G.R. No. 112497, 4 August 1994, 235 SCRA 135.
29 Id., at 139-140.
No comments:
Post a Comment