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GV DIVERSIFIED INTERNATIONAL, incorporated, Petitioner, - versus - |
G.R. No. 159245 Present: QUISUMBING,
J., Chairperson, CARPIO, CARPIO MORALES, TINGA, and VELASCO, JR., JJ. |
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COURT OF APPEALS,
CITY OF Respondents. |
Promulgated: August 31, 2006 |
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QUISUMBING, J.:
This
special civil action for certiorari seeks to annul the Decision,[1] dated
The pertinent facts are as follows:
On P635,999,929.79
payable in US dollars at the exchange rate of P37.50 to a dollar.
Pursuant
to the contract and upon petitioner’s request,[4]
the City released P23,000,000 to cover the expenses for topographic
surveys, feasibility studies, design development and preliminary engineering.
However, before petitioner could
continue with the implementation of the contract, respondent Vicente Y. Emano,
was declared winner in the election for mayor during the May 1998 elections. Mayor Emano created a special committee to
investigate the alleged irregular release of the amount of P23,000,000
to petitioner. The special committee
found the contract grossly disadvantageous to the government.
Thus, in December 2000, an amended
Build and Transfer Contract was forged between petitioner and the City. The amendment retained the project cost of P635,999,929.79
less the initial payment of P23,000,000, but made it payable in
Philippine pesos instead of US dollars.
Meanwhile, petitioner assigned all
its rights, obligations, and interests in the original and amended contracts in
favor of White Horse Trading Development and Construction (White Horse, for
brevity) for a consideration of P25,000,000. The City accordingly passed an ordinance
confirming the said assignment. Thereafter,
the City sent a notice to White Horse to commence work.
While work on the project was
underway, White Horse failed to comply with the cash consideration as agreed
upon under the deed of assignment. Hence,
petitioner rescinded the assignment with due notice to the City.
However, Mayor
Emano refused to recognize the same and instead,
rescinded the amended contract between petitioner and the City. Forthwith, the City caused the publication of
invitation to licensed contractors to pre-qualify and bid for the same project.
Claiming that the rescission of the
amended contract was unlawful, petitioner filed with the
On
Prior to the hearing on the
application for preliminary injunction, the City filed a Motion to Dismiss the
application for TRO and/or preliminary injunction and to quash the TRO already
issued. The City alleged that under
Presidential Decree No. 1818, the RTC had no jurisdiction to issue a TRO. It also lamented the lack of notice and
hearing before the issuance of the questioned TRO.
On
On
WHEREFORE,
to maintain the status quo, let [a] Writ of Preliminary Injunction be issued,
upon filing of the bond by the plaintiffs as required by the Rules of Court in
the sum of ONE MILLION PESOS (P1,000,000.00). Directing the defendants, from the commission
of the acts complained of and for opening the sealed bids for the South
Diversion Road and PCDG Cargo Bridge Project on July 17, 2002 or any other
dates, under the defendants’ “Invitation to Prequalify and to Bid” and other or
further documents issued in relation thereto and to desist from performing any
further act that may in one way or the other contravene the tenor of this
Order.
SO
ORDERED.[5]
The City
timely filed an Urgent Omnibus Motion for Reconsideration.[6] However, the RTC denied it for lack of merit.
Aggrieved, the City filed with the
Court of Appeals on
In its Resolution[7]
of
After hearing both parties, the Court
of Appeals rendered a Decision on
WHEREFORE,
the petition is GRANTED. The injunctive
writ issued pursuant to the
SO ORDERED.[8]
Not
satisfied with the said Decision, petitioner filed a Motion for
Reconsideration, which the appellate court denied for lack of merit in its
Resolution of
Hence, the instant special civil
action for certiorari raising as sole issue:
Whether the City
may be stopped by preliminary prohibitory injunction from awarding through
public bidding the completion of the
Stated otherwise, the issue is
whether the Court of Appeals committed grave abuse of discretion in lifting the
preliminary injunction issued by the RTC?
Petitioner contends that the amended
contract is the law between the parties, but the City unilaterally rescinded
the same without observing the stipulated procedure for termination. Petitioner avers that the questioned writ of
preliminary injunction was sought and issued in connection with a legal
question.
Relying on our rulings in
Second, petitioner claims P.D. No.
1818 does not apply when the implementation of the project has started, as is
allegedly the case herein. Third,
petitioner avers P.D. No. 1818 is inapplicable as there was, allegedly, grave
abuse of discretion on the part of the government authority being enjoined.
However,
Respondents stress that the opening
of the sealed bids should not be enjoined as it is an essential legal
requirement before a contract may be awarded. They also emphasize that petitioner, having
assigned all its rights and interests in favor of White Horse, has lost
standing to claim any injury arising from the City’s rescission of the amended
contract.
Further, respondents point out that
when the Court of Appeals lifted the writ of preliminary injunction issued by
the RTC, the City accordingly proceeded with the opening of the sealed bids. In fact, the winning bidder, UKC Builders,
Inc., had already resumed the implementation of the project. Thus, respondents allege, the present petition
is now moot.
We find the petition without merit.
P.D. No. 1818[14]
provides:
SECTION 1. No court in the Philippines shall have jurisdiction
to issue any restraining order, preliminary injunction, or preliminary
mandatory injunction in any case, dispute, or controversy involving an
infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the
government, including among others public utilities for the transport of the
goods or commodities, stevedoring and arrastre contracts, to prohibit any
person or persons, entity or government official from proceeding with, or
continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary for
such execution, implementation or operation.
The rationale behind the aforesaid prohibition, as expressed in the
second whereas clause of P.D. No. 1818, is to avoid disruption of
essential government projects in areas of activity critical to the country’s
economic development efforts. It states:
x x x x
WHEREAS, it is in the public interest to adopt a similar
prohibition against the issuance of such restraining orders or injunctions in
other areas of activity equally critical to the economic development effort of
the nation, in order not to disrupt or hamper the pursuit of essential government
projects;
x x x x
To boost the cited policy, Congress enacted Rep. Act No. 8975,[15]
which effectively superseded[16]
P.D. No. 1818. The twin objectives of Rep.
Act No. 8975 are: (1) to avoid unnecessary increase in construction costs; and
(2) to allow the public to enjoy soonest the benefits of the project. Thus:
SECTION 1. Declaration of Policy. – Article XII,
Section 6 of the Constitution states that the use of property bears a social
function, and all economic agents shall contribute to the common good. Towards this end, the State shall ensure the
expeditious and efficient implementation and completion of government
infrastructure projects to avoid unnecessary increase in construction,
maintenance and/or repair costs and to immediately enjoy the social and
economic benefits therefrom.
Rep. Act No. 8975 delineated more clearly the coverage of the
prohibition. Quoted below are its relevant
provisions:
SEC. 2. Definition of Terms. –
(a) “National government projects” shall refer to all current and future national government infrastructure, engineering works and service contracts, including projects undertaken by government-owned and controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition, supply and/or installation of equipment and materials, implementation, construction, completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the source of funding. (Emphasis supplied.)
x x x x
SEC. 3. Prohibition on the Issuance of Temporary Restraining
Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. –No
court, except the Supreme Court, shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the
government, or any of its subdivisions, officials or any person or entity,
whether public or private, acting under the government’s direction, to
restrain, prohibit or compel the following acts:
x x x x
(b) Bidding or awarding of contract/project of the national
government as defined under Section 2 hereof;
x x x x
SEC. 4. Nullity of Writs and Orders.–Any temporary
restraining order, preliminary injunction or preliminary mandatory injunction
issued in violation of Section 3 hereof is void and of no force and effect.
x x x x
Based on the aforequoted provisions,
a preliminary injunction issued by any court, other than the Supreme Court, for
the purpose of restraining the bidding or awarding of a national government
project, is void.
In this case,
the preliminary injunction issued by the RTC sought to restrain the City of
Consequently,
the Court of Appeals, in lifting the preliminary injunction issued by the RTC, did
not commit grave abuse of discretion. On
the contrary, the Court of Appeals in fact served the purpose of Rep. Act No.
8975. The lifting of the subject
preliminary injunction paved the way for the opening of the sealed bids
pursuant to the City’s invitation to qualified bidders. As a result, the implementation of the aforesaid
infrastructure project continued without any undue and costly delay, as
expressly mandated by Rep. Act No. 8975.
A contrary
ruling would only slow down government development efforts to the detriment of
the general public and cause the government to unnecessarily incur increased
construction costs. This, we cannot
allow without running afoul of the clear mandate of the law.
WHEREFORE, the petition is DISMISSED. The Decision, dated
Costs against
petitioner.
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
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ANTONIO T. CARPIO Associate Justice |
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CONCHITA CARPIO MORALES Associate Justice |
DANTE O. TINGA Associate Justice |
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PRESBITERO J. VELASCO,
JR. Associate Justice |
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A T T E S T A T I O N
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
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ARTEMIO V. PANGANIBAN Chief Justice |
[1] Rollo, pp. 24-38. Penned by Associate Justice Oswaldo D. Agcaoili, with Associate Justices Eliezer R. Delos Santos, and Regalado E. Maambong concurring.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] G.R. No. 86695,
[11] G.R. No. 108718,
[12] G.R. Nos. 115786-87,
[13] Erroneously written as “Rep. Act No. 8795.”
[14] Prohibiting Courts from Issuing Restraining
Orders or Preliminary Injunctions in Cases Involving Infrastructure and Natural
Resource Development Projects of, and Public Utilities Operated by the Government.
Took effect
[15] An Act to Ensure the Expeditious Implementation and Completion of Government
Infrastructure Projects by Prohibiting Lower Courts from Issuing Temporary
Restraining Orders, Preliminary Injunctions or Preliminary Mandatory
Injunctions, Providing Penalties for Violations Thereof, and for Other
Purposes. Took effect
[16] Bangus Fry Fisherfolk v. Lanzanas,
G.R. No. 131442,