G.R. No. 196112, February 26, 2014
GMA NETWORK, INC., Petitioner, v. NATIONAL TELECOMMUNICATIONS COMMISSION, Respondent.
D E C I S I O N
Section 28. Violations of the orders, decisions, and regulations of the Commission and the terms and conditions of any certificates issued by the Commission shall prescribe after sixty days and violations of the provisions of this Act shall prescribe after one hundred and eighty days. (Emphasis and underscoring supplied)It asseverates that the NTC’s attempt to penalize it for supposedly operating with an expired PA should be deemed barred by the afore-cited limitation since the NTC’s action came only after the lapse of almost 10 years from the time its alleged violation took place - that is, after the subject PA expired on July 14, 1998.32crallawlibrary
Section 21. Every public service violating or failing to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission shall be subject to a fine of not exceeding two hundred pesos per day for every day during which such default or violation continues; and the Commission is hereby authorized or empowered to impose such fine, after due notice and hearing.In Globe Telecom, Inc. v. NTC,33 the Court intimated that the NTC’s imposition of a fine pursuant to Section 21 of the Public Service Act is made in an administrative proceeding, and thus, must comply with the requirements of notice and hearing. Also, in the same case, the Court classified the fine imposed under the same provision to be one which is regulatory and punitive in character, viz.:34crallawlibrary
The fines so imposed shall be paid to the Government of the Philippines through the Commission, and failure to pay the fine in any case within the time specified in the order or decision of the Commission shall be deemed good and sufficient reason for the suspension of the certificate of said public service until payment shall be made. The remedy provided in this section shall not be a bar to, or affect any other remedy provided in this Act but shall be cumulative and additional to such remedy or remedies. (Emphasis supplied)
Section 21 requires notice and hearing because fine is a sanction, regulatory and even punitive in character. Indeed, the requirement is the essence of due process. Notice and hearing are the bulwark of administrative due process, the right to which is among the primary rights that must be respected even in administrative proceedings. The right is guaranteed by the Constitution itself and does not need legislative enactment. The statutory affirmation of the requirement serves merely to enhance the fundamental precept. The right to notice and hearing is essential to due process and its non-observance will, as a rule, invalidate the administrative proceedings.In this relation, the Court, in Sambrano, ruled that the 60-day prescriptive period provided under Section 28 of the Public Service Act can be availed of as defenses only in criminal proceedings filed under Chapter IV thereof, and not in proceedings that pertain to the regulatory or administrative aspects of a public service utility’s observance of the terms and conditions of his permit to operate, viz.:35crallawlibrary
In citing Section 21 as the basis of the fine, NTC effectively concedes the necessity of prior notice and hearing. Yet the agency contends that the sanction was justified by arguing that when it took cognizance of Smart’s complaint for interconnection, “it may very well look into the issue of whether the parties had the requisite authority to operate such services.” As a result, both parties were sufficiently notified that this was a matter that NTC could look into in the course of the proceedings. The parties subsequently attended at least five hearings presided by NTC.
That particular argument of the NTC has been previously disposed of. But it is essential to emphasize the need for a hearing before a fine may be imposed, as it is clearly a punitive measure undertaken by an administrative agency in the exercise of its quasi-judicial functions. Inherently, notice and hearing are indispensable for the valid exercise by an administrative agency of its quasi-judicial functions. (Emphases and underscoring supplied; citations omitted)
This Court has already held, in Collector of Internal Revenue et al. vs. Buan, G. R. L-11438; and Sambrano v. Public Service Commission, G.R. L-11439 and L-11542, decided on July 31, 1958, that the 60-day prescriptive period fixed by section 28 of the Public Service Law is available as a defense only in criminal or penal proceedings filed under Chapter IV of the Act. Consequently, the Public Service Commission is not barred from receiving evidence of the prescribed violations for the purpose of determining whether an operator has or has not faithfully kept the conditions of his certificate of permit, whether he failed or not to render the services he is required to furnish to the customers, and whether or not the infractions are sufficient cause to cancel or modify the certificate. Proceedings of this kind are held primarily to ensure adequate and efficient service as well as to protect the public against the operator’s malfeasances or abuses; they are not penal in character. True, the cancellation of the certificate may mean for an operator actual financial hardship; yet the latter is merely incidental to the protection of the traveling public. Hence, in refusing to admit evidence of prescribed violations as part of the complainant’s case against the Philippine Rabbit Lines for a modification or cancellation of the latter’s permit, we hold that the Commission committed error.It is well to note that the criminal proceedings under Chapter IV of the Public Service Act, as mentioned in the Sambrano ruling, pertain to those found under Sections 23, 24, 25, and 2636 thereof as these provisions pertain to fines imposed “in the discretion of the court” - which means they are imposed in criminal court proceedings - as contradistinguished from Section 21 which may be imposed by the NTC (then, by the Public Service Commission), after due notice and hearing,
x x x x
The order appealed from is modified in the sense that the respondent Commission shall admit evidence of violations committed by the respondent Philippine Rabbit Bus Lines, Inc., even if no complaint against such violations were filed within 60 days from their commission. x x x. (Emphasis supplied)
Section 23. Any public service corporation that shall perform, commit or do any act or thing forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or both, in the discretion of the court.The argument is untenable.
REPUBLIC BROADCASTING SYSTEM, INC.GMA argues, therefore, that having been authorized to operate by the NTC itself through the latter’s continued issuance of temporary permits, the imposition of the fine becomes highly iniquitous if not legally unfounded.37crallawlibrary
is hereby granted a Temporary Permit to operate a BROADCASTING STATION located at Brgy. San Pedro, Puerto Princesa, Palawan.
[A] P.A. refers to an authority given to an entity qualified to operate a public utility for a limited period during the pendency of its application for, or before the issuance of its Certificate of Public Convenience (CPC). It has a general scope because it is akin to a provisional CPC in that it gives a public utility provider power to operate as such and be bound by the laws and rules governing public utilities, pending the issuance of its actual CPC.As may be gleaned from the NTC’s statement, the operational validity of a temporary permit flows only from “a previously updated PA.” This means that there should be an effective PA before a temporary permit is issued. The latter is a specific issuance which proceeds from a pre-requisite PA. While GMA may have been able to secure the successive issuance of temporary permits from the NTC to cover even the PA’s expired period, this does not detract from the apparent irregularity of the procedure. The fact remains that GMA operated its radio station between the time that its PA expired on July 14, 1998 and the application for its renewal was filed on April 13, 2002. Without an updated PA therefor, GMA should not have been issued temporary permits.
On the other hand, a [t]emporary [p]ermit is a document containing the call sign, authorized power, frequency/channel, class station, hours of operation, points of communication and equipment particulars granted to an authorized public utility. Its scope is more specific than a P.A. because it contains details and specifications under which a public utility x x x should operate x x x pursuant to a previously updated P.A. (Emphases and underscoring supplied)
The NTC, being the government agency entrusted with the regulation of activities coming under its special and technical forte, and possessing the necessary rule-making power to implement its objectives, is in the best position to interpret its own rules, regulations and guidelines. The Court has consistently yielded and accorded great respect to the interpretation by administrative agencies of their own rules unless there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law. (Emphases and underscoring supplied)Equally significant is the principle that the State cannot be put in estoppel by the mistakes or errors of its officials or agents.41 Hence, whatever irregularity had attended the issuance of the temporary permits in this case does not render correct what appears to be erroneous procedure. The NTC itself recognizes this when it stated in its Comment that:42crallawlibrary
Technically speaking, [GMA] should not have been issued a Temporary Permit. The Temporary Permits relied upon by [GMA] were issued to it on the assumption that its P.A. was up to date. Had [NTC] known that [GMA] had an expired P.A., it would not have granted [GMA] a Temporary Permit to operate its subject radio broadcasting station. Before [GMA] could legally operate its subject radio station, it should have both an updated P.A. and a Temporary Permit for such purpose.Verily, the Court agrees with the NTC’s submission that although GMA was granted numerous temporary permits, it does not remove the fact that it was operating on an expired PA, which infraction is subject to the penalty of fine under Section 21 of the Public Service Act.43 The Court, however, expresses that the NTC should be more circumspect with the enforcement of its internal procedures if only to prevent any future incident similar to the present case. The ideal of public accountability befittingly demands that administrative agencies, such as the NTC, devise appropriate governance systems to ensure that its rules and regulations are followed and complied, and deviations therefrom deterred and quelled. Truth be told, it is through an honest and effective bureaucracy that the government gains the people’s trust and deference.
* Designated Acting Chief Justice per Special Order No. 1644 dated February 25, 2014.
** Designated Acting Member per Special Order No. 1643 dated February 25, 2014.
1Rollo, pp. 3-46.
2 Id. at 52-65. Penned by Associate Justice Hakim S. Abdulwahid, with Associate Justices Ricardo R. Rosario and Samuel H. Gaerlan, concurring.
3 Id. at 67-68.
4 Id. at 96-100. Signed by Commissioner Ruel V. Canobas and Deputy Commissioners Jaime M. Fortes, Jr. and Douglas Michael N. Mallillin.
5 Id. at 110-115. Signed by Commissioner Gamaliel A. Cordoba and Deputy Commissioners Jaime M. Fortes, Jr. and Douglas Michael N. Mallillin.
6 Entitled “AN ACT GRANTING THE REPUBLIC BROADCASTING SYSTEM, INC. A FRANCHISE TO CONSTRUCT, INSTALL, OPERATE AND MAINTAIN RADIO AND TELEVISION BROADCASTING STATIONS IN THE PHILIPPINES.”
7Rollo, p. 167.
8 Entitled “CREATING A MINISTRY OF PUBLIC WORKS AND A MINISTRY OF TRANSPORTATION AND COMMUNICATIONS.”
9 Section 15 of EO 546 dated July 23, 1979.
10Rollo, pp. 69-78. Signed by Commissioner Simeon L. Kintanar.
11 Id. at 79.
12 Id. at 80.
13 Id. at 81.
14 Id. at 84-85.
15 Id. at 82.
16 Id. at 83.
17 Id. at 86-87.
18 Id. at 88-91.
19 Entitled the “AN ACT TO REORGANIZE THE PUBLIC SERVICE COMMISSION, PRESCRIBE ITS POWERS AND DUTIES, DEFINE AND REGULATE PUBLIC SERVICES, PROVIDE AND FIX THE RATES AND QUOTA OF EXPENSES TO BE PAID BY THE SAME, AND FOR OTHER PURPOSES.”
20Rollo, pp. 54-55.
21 Id. at 96- 100.
22 Id. at 101-109.
23 Id. at 110-115.
24 Id. at 116-141.
25 Id. at 52-65.cralawred
26 116 Phil. 552 (1962).
27Rollo, p. 59.
28 Id. at 60.
29 Id. at 63.
30 Id. at 67-68.
31 The NTC’s Order dated January 14, 1997 granting its PA provides that:chanRoblesVirtualawlibrary10. Applicant-Grantee shall secure with this Commission permit and licenses for its equipments, facilities and operations and shall x x x have at all times valid permits and licenses to cover its equipment, facilities and operations. (Id. at 75.)32 Id. at 260.
33 479 Phil. 1 (2004).
34 Id. at 38-39.
35Sambrano v. PSC and Phil. Rabbit Bus Lines, Inc., supra note 26, at 554-555.
36 Sections 23, 24, 25, and 26, Chapter IV of the Public Service Act provide:chanRoblesVirtualawlibrary
Section 23. Any public service corporation that shall perform, commit, or do any act or thing forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or both, in the discretion of the court.
Section 24. Any person who shall knowingly and willfully perform, commit, or do, or participate in performing, committing, or doing, or who shall knowingly and willfully cause, participate, or join with others in causing any public service corporation or company to do, perform or commit, or who shall advice, solicit, persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to perform, commit, or do any act or thing forbidden or prohibited by this Act, shall be punished by a fine not exceeding two thousand pesos, or imprisonment not exceeding two years, or both, in the discretion of the court: Provided, however, that for operating a private passenger automobile as a public service without having a certificate of public convenience for the same the offender shall be subject to the penalties provided for in section sixty-seven (j) of Act numbered thirty-nine hundred an ninety-two.
Section 25. Any person who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall knowingly and willfully cause or join or participate with others in causing any public service corporation or company to neglect, fail or omit to do or perform, or who shall advise, solicit, or persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to neglect, fail, or omit to do any act or thing required to be done by this Act, shall be published by a fine not exceeding two thousand pesos or by imprisonment not exceeding two years, or both, in the discretion of the court.
Section 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or operated by to in charge of the Commission or its agents, shall be deemed guilty of a misdemeanor and upon conviction shall be published by a fine not exceeding one thousand pesos or imprisonment not exceeding six months, or both in the discretion of the court.
Any public service permitting the destruction, injury to, or interference with, any such apparatus or appliances shall forfeit a sum not exceeding four thousand pesos for each offense. (Emphases supplied)
37 See rollo, pp. 269-271.
38 See Comment; id. at 333.
39 See Section 15 of EO 546 dated July 23, 1979.
40 G.R. No. 135992, January 31, 2006, 481 SCRA 163, 166-167.
41Republic of the Phils. v. CA, 361 Phil. 319, 329 (1999).
42 See Comment; rollo, p. 334.
43 Id. at 335.