G.R. No. 160399 - City of Iloilo vs. Honrado

The case centers on the disputed issuance of a writ of preliminary injunction by the Regional Trial Court (RTC), Branch 29, in Iloilo City.
The injunction was issued following the DOTC Department Order No. 2002-31, which regulated the establishment and operation of Private Emission Testing Centers (PETCs).
The department order prescribed a quota of one PETC lane for every 15,000 registered vehicles in an LTO Registering District, initially leading to JPV Motor Vehicle Emission Testing and Car Care Center’s authorization to operate a four-lane PETC in Iloilo City.

Petitioner: The City of Iloilo, represented by Mayor Jerry P. Treaas, contended that:

Granting the writ of preliminary injunction would create a monopoly by preventing the issuance of new business permits for other PETC operators.
The injunction would effectively encroach on the Mayor’s discretionary power to regulate permits within the city.
JPV did not adequately establish a “right in esse” that justified such injunctive protection.

JPV Motor Vehicle Emission Testing & Car Care Center, represented by Jim P. Velez, sought the injunction on the basis that its existing capacity (60,000 vehicles) was sufficient to cater for the registered motor vehicle population in Iloilo City, which at the time amounted to 53,647 vehicles.
Grahar Emission Testing Center, another PETC operator, intervened claiming that amendments to the DOTC rules (reducing the required capacity per lane from 15,000 to 12,000 vehicles) rendered JPV’s capacity insufficient, thereby justifying the injunction to restrict the issuance of an additional permit.

In Civil Case No. 03-27648, JPV filed a complaint to prevent the petitioner from issuing a mayor’s permit for another PETC operator.
On June 24, 2003, the RTC issued an order granting JPV’s application for a writ of preliminary injunction, thereby enjoining the issuance of any mayor’s permit to operate an additional PETC.
The petitioner subsequently filed a motion for reconsideration of the June 24, 2003 order.
On August 15, 2003, the RTC denied the petitioner's motion for reconsideration, thereby reaffirming the preliminary injunction.
On November 5, 2003, the petitioner directly elevated the matter to the Court via a petition for certiorari, alleging grave abuse of discretion and lack or excess of jurisdiction by the RTC in issuing and sustaining the injunction.

Whether the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction by:

Granting the writ of preliminary injunction on its initial issuance (June 24, 2003) without a full hearing on the merits.
Failing to properly consider whether granting the injunctive relief would effectively prejudge the merits of the case by preventing the petitioner from exercising its regulatory powers.

Whether the lower court’s actions in denying the petitioner’s subsequent motion for reconsideration (August 15, 2003) further contributed to an abuse of discretion.
Whether the issuance of the writ of preliminary injunction was in consonance with the guidelines stipulated in Section 3, Rule 58 of the Rules of Court, particularly with regard to not deciding controverted facts or final merits.
Whether there exists a sufficient basis for the superior court to annul the assailed orders based on the doctrine of grave abuse of discretion inherent in the exercise of judicial power.