G.R. No. 168914 - Metropolitan Cebu Water District vs. Adala

Respondent Margarita A. Adala filed an application on October 24, 2002, with the National Water Resources Board (NWRB) for a Certificate of Public Convenience (CPC) to operate and maintain a waterworks system in sitios San Vicente, Fatima, and Sambag in Barangay Bulacao, Cebu City.
Petitioner Metropolitan Cebu Water District (MCWD), a government-owned and controlled corporation created pursuant to P.D. 198, opposed the issuance of the CPC. The opposition was based on several grounds including the lack of consent from its Board of Directors and the alleged interference with its exclusive water supply rights.

At the initial hearing on December 16, 2002, respondent presented proof of compliance with the required notice and publication rules.
MCWD initially filed its formal opposition by mail; however, a copy had not reached the NWRB at the time of the hearing.
Respondent’s counsel provided the opposition copy during the hearing after receiving it from petitioner’s representative.

The NWRB, after holding hearings and conducting an ocular inspection of the area, rendered a Decision on September 22, 2003, dismissing MCWD’s opposition as “lacking merit and/or failure to state the cause of action” and granting the CPC to respondent.
The Decision granted the CPC for a period of five years with specific rates prescribed for various consumption blocks and attached detailed rules and regulations for the operation of the waterworks system.
MCWD filed a motion for reconsideration before the NWRB, which was subsequently denied in a Resolution dated May 17, 2004.
MCWD then appealed to the Regional Trial Court (RTC) of Cebu City; the RTC affirmed the NWRB Decision on February 10, 2005 and later denied MCWD’s motion for reconsideration by Order dated May 13, 2005.

The petition for review raised a procedural issue concerning whether MCWD’s General Manager, Engineer Armando H. Paredes, who filed the petition and signed the accompanying verification and certification of non-forum shopping, was specifically authorized by a board resolution to perform such acts.
MCWD presented its Board of Directors’ Resolution No. 015-2004 authorizing its lawyers “to file in behalf of the Metropolitan Cebu Water District” in expropriation and other cases.
The respondent contended that the resolution was merely a general authorization and did not specifically empower Engineer Paredes to sign the necessary legal documents, invoking related jurisprudence which requires express authority for signing verifications and certifications.

Whether the consent of the Board of Directors of the water district is a condition sine qua non for the grant of a Certificate of Public Convenience (CPC) by the NWRB.
Whether the term “franchise,” as used in Section 47 of P.D. 198 (as amended), should be interpreted to include not only franchises granted directly by Congress but also CPCs issued by administrative bodies such as the NWRB.
Whether the board resolution authorizing the filing of cases by Engineer Armando H. Paredes sufficiently empowered him to sign verifications and certifications against forum shopping on behalf of MCWD.
Whether Section 47 of P.D. 198, which restricts the grant of CPCs without the water district’s Board of Directors’ consent, is constitutional in light of the constitutional provisions on public utilities and non-exclusive authorizations.