G.R. No. 176006 - National Power Corp. vs. Pinatubo Commercial

The National Power Corporation (NPC) issued Circular No. 99-75 dated October 8, 1999, establishing guidelines for the disposal of scrap aluminum conductor steel-reinforced (ACSR) wires.
The purpose of the circular was to decongest NPC installations, maintain good housekeeping, and generate additional income for NPC.
Items 3 and 3.1 of the circular limited qualified bidders exclusively to partnerships or corporations that directly use aluminum as raw material for producing finished products partly or wholly made of aluminum, or their duly appointed representatives, whether local or overseas.

In April 2003, NPC invited pre-qualification of bidders for the public sale of scrap ACSR cables.
Respondent, Pinatubo Commercial, a trader of scrap materials including aluminum, applied for pre-qualification but was denied by NPC in a letter dated April 29, 2003.
Pinatubo requested reconsideration, but NPC upheld the denial.

Pinatubo filed a petition for annulment of NPC Circular No. 99-75, praying for a temporary restraining order and/or writ of preliminary injunction against the Circular.
Pinatubo argued that the circular was unconstitutional for violating the substantive due process and equal protection clauses and contravening the government policy on competitive public bidding.
The RTC upheld Pinatubo’s contentions and declared items 3 and 3.1 of the circular unconstitutional for violating substantial due process, equal protection clause, and for restraining competitive free trade and commerce. The RTC denied attorney's fees and costs.
NPC’s motion for reconsideration was denied by the RTC.

NPC assailed the RTC decisions and raised one principal issue: whether the RTC gravely erred in declaring items 3 and 3.1 of NPC Circular No. 99-75 unconstitutional for violating substantial due process and equal protection clauses and restraining competitive trade.
NPC argued that the circular was an internal rule not requiring publication and was addressed only to NPC officials involved in disposal procedures.
NPC maintained that there was a reasonable distinction between manufacturers (direct users of aluminum) and traders, anchored on RA 7832 (Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994).
NPC justified limiting bidders to manufacturers as a measure to monitor the market and curb fencing of stolen NPC wires, asserting that traders could participate if tied up with manufacturers.

Whether NPC Circular No. 99-75 must be published to have binding force and effect.
Whether items 3 and 3.1 of NPC Circular No. 99-75:

Violated the substantive due process clause of the Constitution by depriving certain parties of rights without due process.
Violated the equal protection clause of the Constitution by unreasonably classifying bidders and excluding certain groups.
Restrained competitive free trade and commerce contrary to government procurement policies.