EN BANC
G.R. No. 218721, July 10, 2018
BINGA HYDROELECTRIC PLANT, INC., HEREIN REPRESENTED BY ITS EXECUTIVE VICE-PRESIDENT, ERWIN T. TAN, Petitioner, v. COMMISSION ON AUDIT AND NATIONAL POWER CORPORATION, Respondents.
D E C I S I O N
JARDELEZA, J.:
This is a petition for review on certiorari1 under Rule 64, in relation to Rule 65, of the Rules of Court, assailing the Decision No. 2013-0502 dated January 30, 2013 and the Resolution No. 2015-1343 dated April 6, 2015 of the Commission on Audit (COA), which denied petitioner's money claim in the amount of $5,000,000.00 and P40,118,442.79.
In March 2003, the Binga Hydroelectric Plant, Inc. (BHEPI)4 and the National Power Corporation (NPC),5 together with the Power Sector Assets and Liabilities Management Corporation (PSALM),6 entered into a Settlement Framework Agreement (SFA)7 for the complete resolution and settlement of all claims and disputes between BHEPI and NPC in connection with the Rehabilitate-Operate-Leaseback (ROL) Contract of the Binga Hydroelectric Power Plant located at Tinongdan, Itogon, Benguet. The SFA pertinently provided that NPC shall pay BHEPI an amount equivalent to $5,000,000.00. It was preconditioned on the complete settlement of the unpaid claims of the subcontractors and employees of BHEPI in the amount of $6,812,552.55 and upon their execution of absolute quitclaims and waivers of rights and claims against the NPC.8
BHEPI and NPC also agreed that BHEPI would exert its best efforts to negotiate with its subcontractors and employees to further reduce their claims on record. Any savings to be generated from this reduction shall be equally shared between the NPC and BHEPI.9
The SFA was endorsed by the Department of Justice (DOJ) and approved by the Secretary of the Department of Energy (DOE). It was adopted in toto by the Boards of the NPC and PSALM in their resolutions.10
In May 2005, due to the alleged failure of the NPC to comply with the conditions of the SFA, BHEPI filed a case for specific performance with damages before the Regional Trial Court (RTC) of Baguio City. BHEPJ demanded for the payment of $5,000,000.00, plus $1,700,000.00 representing 50% of generated savings realized from the reduction of the claims of its subcontractors and employees.11 The RTC dismissed the case, prompting BHEPI to appeal before the Court of Appeals (CA). During the pendency of the appeal, BHEPI and NPC filed a joint motion to approve compromise agreement.12 Assisted by the Office of the Solicitor General (OSG), the NPC agreed to pay BHEPI $5,000,000.00, representing complete settlement of the unpaid claims of subcontractors/employees, and P40,118,442.79 as savings realized from the reduction of the claims of subcontractors and employees, subject to certain conditions.13 The CA approved the Compromise Agreement14 and, accordingly, dismissed the appeal. An Entry of Judgment was subsequently issued.15
BHEPI moved for the execution of the judgment of the CA before the RTC, but the trial court noted that execution of money claims against the government including government-owned and controlled corporations (GOCCs) should be lodged before the COA.16 Thus, BHEPI filed its petition17 for money claim before the COA, praying that the COA take cognizance of the CA's judgment award on the Compromise Agreement.
In the assailed Decision, the COA denied BHEPI's money claim. The COA ruled that the power to compromise claims is vested exclusively in the Commission or Congress, pursuant to Section 20(1), Chapter IV, Subtitle B, Title I, Book V of Executive Order (EO) No. 292, also known as the Administrative Code of 1987. Thus, the Compromise Agreement not having been submitted to the COA for approval, as required by law, is null and void.18
The COA also ruled that PSALM, an indispensable party, was not a signatory to the Compromise Agreement. Even on the assumption that PSALM had assented to it, the COA held that the Compromise Agreement must still be denied because it was not supported with the necessary documents, and hence, the claim against the NPC's liability to BHEPI was unsubstantiated, and its reasonableness cannot be ascertained.19
BHEPI moved for reconsideration20 of the COA Decision, but it was also denied via a Resolution dated April 6, 2015.21 The COA reiterated its holding that the power to compromise a claim is vested in the Commission, the President or the Congress as provided under Section 20(1), Chapter IV, Subtitle B, Title I, Book V of EO No. 292. As such, it is Congress, upon the recommendation of the Commission and the President, which has the authority to compromise the claims of BHEPI against the NPC. The COA explained that in the exercise of its jurisdiction under the Section, it is mandated to confirm the veracity and validity of the claims of BHEPI before recommending to Congress the approval of the compromise. Having done so, the COA restated its earlier findings of the uncertainty of the reasonableness and validity of the compromised claims of unnamed subcontractors and employees and the alleged savings realized from the reduction of such unpaid claims in the absence of substantial supporting documents, such as vouchers, invoices, receipts, statement of accounts and other related papers within reach of accounting officers. The COA likewise found BHEPI's claim to the "savings" in the amount of P40,118,442.79 to be improper and highly doubtful.22
Accordingly, apart from denying BHEPI's motion for reconsideration, the COA also recommended to Congress, through the President of the Philippines, the denial of the claim embodied in the Compromise Agreement between BHEPI and the NPC.23
Hence, this petition which essentially raises the issue of whether the COA committed grave abuse of discretion in denying the money claim. BHEPI argues in the main that the Judgment on the Compromise Agreement24 is already final and immutable. Thus, the COA cannot anymore rule on the validity of the Compromise Agreement, as well as on the veracity of the money claim. BHEPI stresses that the Compromise Agreement, as approved by the OSG, was reached in good faith by the parties after the liability of the NPC had been thoroughly evaluated as early as the execution of the SFA. The SFA, in turn, had been reached by the parties, together with PSALM, DOE, and DOJ. BHEPI claims that contrary to the COA's assertion that the NPC's liability is unsubstantiated, evidence had been duly presented before the courts when it filed its action for specific performance.25
We deny the petition.
At the outset, we agree with the COA that the petition was filed out of time.26 The petition is filed under Rule 64, in relation to Rule 65, of the Rules of Court. Section 3 of Rule 64 provides that the petition shall be filed within 30 days from notice of the judgment or final order or resolution sought to be reviewed. The filing of a motion for new trial or reconsideration of said judgment or final order or resolution, if allowed under the procedural rules of the Commission concerned, shall interrupt this period. If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than five days in any event, reckoned from notice of denial.
BHEPI received the Decision of the COA on March 5, 2013 and filed a motion for reconsideration on March 20, 2013. The filing of this motion for reconsideration interrupted the 30-day reglementary period, thus, giving BHEPI a remaining 15-day period within which to file a petition for certiorari. Having received the notice of the denial of its motion on June 11, 2015, BHEPI had until June 26, 2015 to file a petition for certiorari. It, however, filed one only on July 8, 2015.27
We have said previously that the belated filing of a petition for certiorari under Rule 64 is fatal. Procedural rules should be treated with utmost respect and due regard since they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival claims and in the administration of justice. From time to time, however, we have recognized exceptions to the rules but only for the most compelling reasons, where stubborn obedience to the rules would defeat rather than serve the ends of justice. Every plea for a liberal construction of the rules must at least be accompanied by an explanation of why the party-litigant failed to comply with the rules and by a justification for the requested liberal construction. Where strong considerations of substantive justice are manifest in the petition, we may relax the strict application of the rules of procedure in the exercise of its legal jurisdiction.28
Here, there is no compelling reason why we should relax the rules. BHEPI, for one, did not advance any explanation in its petition as to why it failed to comply with procedural rules. With the COA pointing out the matter in its comment, BHEPI then invokes in its reply the relaxation of the strict application of procedural rules in the interest of substantial justice, harping on the alleged grievous error of the COA in overturning a final and executory decision of the CA. But as we will discuss shortly, this is not an error on the part of the COA. More importantly, the petition lacks merit.
To begin with, the COA is correct that the Compromise Agreement is null and void because the power to compromise the claims in this case is lodged with Congress.
Both BHEPI and the NPC argue that the NPC, as a GOCC, has the power to compromise claims under Section 36(2) of Presidential Decree (PD) No. 1445,29 to wit:
(2) The respective governing bodies of government-owned or controlled corporations, and self-governing boards, commissions or agencies of the government shall have the exclusive power to compromise or release any similar claim or liability when expressly authorized by their charters and if in their judgment, the interest of their respective corporations or agencies so requires. When the charters do not so provide, the power to compromise shall be exercised by the Commission in accordance with the preceding paragraph. (Emphasis supplied.)The only requirement under the second paragraph is that the government agency be authorized by its charter to compromise a particular claim. It does not state that the COA must approve the same.
Sec. 20. Power to Compromise Claims. - (1) When the interest of the Government so requires, the Commission may compromise or release in whole or in part, any settled claim or liability to any government agency not exceeding ten thousand pesos arising out of any matter or case before it or within its jurisdiction, and with the written approval of the President, it may likewise compromise or release any similar claim or liability not exceeding one hundred thousand pesos. In case the claim or liability exceeds one hundred thousand pesos, the application for relief therefrom shall be submitted, through the Commission and the President, with their recommendations, to the Congress x x x. (Emphasis supplied.)Under this provision, the authority to compromise a settled claim or liability exceeding P100,000.00 involving a government agency is vested, not in the COA, but exclusively in Congress. An agency of the Government refers to any of the various units of the Government, including a department, bureau, office, instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein.31 Thus, the provision applies to all GOCCs, with or without original charters. A GOCC cannot validly invoke its autonomy to enter into a compromise agreement that is in violation of the above provision.32
| Very truly yours, |
(SGD) | |
EDGAR O. ARICHETA | |
Clerk of Court |
Endnotes:
* Per Section 12, Republic Act No. 296, The Judiciary Act of 1948, as amended.
1Rollo. pp. 3-52.
2Id. at 59-66.
3Id. at 68-74.
4 A duly organized corporation under Philippine laws.
5 A government-owned and controlled corporation.
6 A government-owned and controlled corporation created by virtue of Republic Act No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001."
7Rollo, pp. 76-78.
8Id. at 59-60.
9Id. at 60.
10Id. at 8.
11Id. at 61.
12Id. at 131-136.
13Id. at 131-134. These conditions were: (a) Execution by BHEPI of all corresponding quitclaims and waivers of claims and rights against NPC for any other claims based on the SFA; (b) Submission and approval of the Compromise Agreement by the appropriate court, and the dismissal of the case filed by BHEPI for payment based on the SFA; and (c) Withdrawal/settlement/dismissal with prejudice of all other claims and cases filed by BHEPI in celation to the SFA to which NPC is a defendant.
14Id. at 120-124.
15Id. at 150.
16Id. at 151-153.
17Id. at 154-160.
18Id. at 63.
19Id. at 63-64.
20Id. at 178-219.
21Supra note 3.
22Rollo, pp. 72-73.
23Id. at 73.
24Id. at 142-149.
25Id. at 3-5.
26Id. at 360.
27Id. at 361; See The Law Firm of Laguesma Magsalin Consulta and Gastardo v. Commission on Audit, G.R. No. 185544, January 13, 2015, 745 SCRA 269.
28Osmeña v. Commission on Audit, G.R. No. 188818, May 31, 2011, 649 SCRA 654, 660. Citations omitted.
29 GOVERNMENT AUDITING CODE OF THE PHILIPPINES.
30 G.R. No. 178158, December 4, 2009, 607 SCRA 413.
31 Section 2 on Introductory Provisions of the Administrative Code of 1987.
32 See Strategic Alliance Development Corporation v. Radstock Securities Limited, supra at 489, where the Court so declared that the Philippine National Construction Corporation is "not 'just like any other private corporation' precisely because it is not a private corporation but indisputably a government owned corporation." (Emphasis omitted.)
33Id. at 486-487.
34 PD No. 1445, Sec. 26.
35Star Special Watchman and Detective Agency, Inc. v. Puerto Princesa City, G.R. No. 181792, April 21, 2014, 722 SCRA 66, 86.
36 Supreme Court Administrative Circular 10-2000 dated October 25, 2000, Re: Exercise of utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units, provides in part:
[I]t is settled jurisprudence that upon determination of State liability, the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in P. D. No. 1445, otherwise known as the Government Auditing Code of the Philippines x x x. All money claims against the Government must first be filed with the Commission on Audit which must act upon it within sixty days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and, in effect, sue the State thereby x x x. (Citing Department of Agriculture v. NLRC, G.R. No. 104269, November 11, 1993, 227 SCRA 693, 701-702, Republic v. Villasor, G.R. No. L-30671, November 28, 1973, 54 SCRA 83; P.D. No. 1445, Secs. 49-50.)
37 See Rallos v. City of Cebu, G.R. No. 202651, August 28, 2013, 704 SCRA 378, 401-402.
38 G.R. No. 87710, March 31, 1992, 207 SCRA 659.
39Euro-Med Laboratories, Phil., Inc. v. The Province of Batangas, G.R. No. 148106, July 17, 2006, 495 SCRA 301, 306.
40F.F. Mañacop Construction Co., Inc. v. Court of Appeals, G.R. No. 122196, January 15, 1997, 266 SCRA 235, 241.
41 See Philippine Operations, Inc. v. Auditor General of the Philippines, 94 Phil. 868, 875-876 (1954).
42Strategic Alliance Development Corporation v. Radstock Securities Limited, supra note 30 at 488. Italics in the original.
43 PSALM Board Resolution No. 03-09 (was mentioned as attached to the complaint but it cannot be found in the records, see rollo, p. 183) and NPC Board Resolution No. 2004-30 dated April 27, 2004 (id. at 323-324); Subsequently, NPC issued Board solution No. 2010-03 dated February 1, 2010 approving the Compromise Agreement (id. at 330-332).
44Power Sector Assets and Liabilities Management Corporation (PSALM) v. Court of Appeals (21st Division), G.R. No. 194226, February 15, 2017, 817 SCRA 551, 558-559.