G.R. No. 212894 - Department of Health vs. Pascua

Case Summary (G.R. No. 212894)

Procurement and Bidding Antecedents

The bidding dispute related to the modernization project for Fabella Hospital. The modernization became imperative because the land occupied by Fabella Hospital was owned by Home Guaranty Corporation, requiring the hospital to transfer to a new site. The process began with the submission of approved terms of reference for Phase 1 of the project by Architect Maria Rebecca M. Penafiel of the National Center for Health Facility Development (NCHFD) of DOH to the COBAC Secretariat on February 14, 2013.

The project’s Invitation to Bid (ITB) for Phase 1 was posted on PhilGEPS on April 6, 2013, and it was published on June 4, 2013 in two national newspapers, the Philippine Star and the Philippine Daily Inquirer, and was posted in conspicuous places within DOH premises. A pre-bid conference occurred on June 11, 2013, and on June 25, 2013 the bids were opened. Out of four bidders, three were declared eligible, including JDLC. On July 1, 2013, Tokwing Construction Corporation was initially declared to have submitted the Lowest Calculated Bid. However, on July 25, 2013, the COBAC informed Tokwing Construction that it failed post-qualification because it did not submit certified true copies of the required documents.

On August 6, 2013, the COBAC sent JDLC a notice that it had submitted the Lowest Calculated Bid. After review and deliberations, COBAC resolved that JDLC submitted the second Lowest Calculated and Responsive Bid. COBAC thereafter submitted its resolution to the head of the procuring entity on December 11, 2013.

Cancellation of Procurement and Mandamus Proceedings

After the COBAC’s resolution, DOH was advised to review financing options for the modernization project. As a result of that instruction, DOH cancelled the procurement. The NCHFD informed the COBAC Secretariat of the cancellation. With the cancellation in place, JDLC filed a Petition for the Issuance of the Writ of Mandamus dated January 24, 2014 before the RTC.

After petitioners filed their Comment, JDLC filed a Motion for Leave to File and Admit Attached Amended and Supplemental Petition for Mandamus and Certiorari, with an extremely urgent application for a TRO and/or writ of preliminary injunction. The amended course of action challenged the cancellation of the procurement process and sought relief leading to an award of the project to JDLC.

RTC’s TRO and Preliminary Injunction Orders

On June 18, 2014, the RTC issued an Order granting JDLC’s application for a TRO for twenty (20) days, enjoining DOH and all persons acting for it from conducting a rebidding or awarding to a third party the infrastructure project, or any aspect thereof, or from taking acts that would render the principal issues moot and academic or prejudice JDLC’s rights. The RTC directed DOH to show cause on July 11, 2014 at 8:30 a.m. on why a writ of preliminary injunction should not be granted.

Following the TRO, on August 7, 2014, the RTC granted JDLC’s application for a writ of preliminary injunction, conditioned upon JDLC’s posting of an injunctive bond of P2,000,000.00, “to answer for all damages” that petitioners might sustain by reason of the injunction (and earlier TRO), should the court ultimately rule that the applicant was not entitled to such relief. Upon approval of the bond, the RTC issued the Writ of Preliminary Injunction on August 18, 2014.

Petitioners’ Rule 65 and Rule 45 Challenges

These injunctive issuances prompted petitioners to file G.R. No. 212894 and G.R. No. 213820, both under Rule 65. Petitioners alleged that Judge Pascua gravely abused discretion amounting to lack or excess of jurisdiction when he issued the TRO and the preliminary injunction in violation of R.A. No. 8975, which purportedly barred lower courts from issuing restraining orders or preliminary injunctions against national government infrastructure projects.

Petitioners also filed G.R. No. 213889 under Rule 45, assailing the RTC’s August 29, 2014 Decision. Petitioners insisted that their right to due process was violated because Judge Pascua did not conduct a hearing on the main case before issuing the assailed TRO and subsequent reliefs. In turn, JDLC opposed and prayed for dismissal.

Consolidation and Subsequent Developments Before the Supreme Court

On October 8, 2014, petitioners moved to consolidate the three cases, and the Court consolidated them by Resolution dated September 22, 2014. JDLC later sought reconsideration of consolidation. The Court, by Resolution dated October 17, 2016, required the parties to inform it within ten (10) days from notice of any supervening events or developments that might assist immediate disposition or render the cases moot.

Petitioners submitted a compliance dated March 16, 2017, stating that the Office of the Solicitor General had sought information from the Secretary of Health and that DOH reported no significant circumstance after COBAC Resolution No. 2014-027-A dated October 10, 2014, awarding the Design and Build of the Infrastructure Project in favor of JDLC, and after JDLC’s compliance filed on October 13, 2014. DOH added that JDLC had finalized planning and its design and that construction of Fabella Hospital had commenced.

JDLC also submitted compliance dated March 20, 2017. It informed the Court that on January 23, 2015, DOH issued a Notice to Proceed (NTP) and that on May 31, 2015 JDLC began works pursuant to the NTP. JDLC further reported an estimated accomplishment of approximately seventy percent (70%) of the project, as of the time of the compliance, and asserted that completion would proceed on schedule absent factors beyond its control. It also stated that the project budget had not been reverted and had been allotted and utilized by DOH. JDLC cited that its fifth progress billing had been endorsed for payment in the amount of PhP83,793,873.43 for accomplishment as of December 31, 2016.

JDLC also stated that on November 16, 2015, the Government Procurement Policy Board issued GPPB Resolution No. 30-2015 approving DOH’s request to resort to negotiated procurement to award Phase II to JDLC under Section 53.4 of the Revised IRR of R.A. 9184, and that on December 29, 2015 JDLC was awarded Phase II with an NTP, for a total contract amount of PhP713,868,550.65. JDLC characterized Phase II as involving construction of the second to sixth floors and noted that Phase II was being implemented simultaneously with the project subject of the petitions. JDLC argued that the Phase II award effectively recognized its eligibility and qualification, and therefore negated DOH’s claimed ineligibility concerns.

The Supreme Court’s Disposition: Mootness

The Supreme Court ruled that the petitions had become moot. It acknowledged that the reliefs sought in the petitions—(a) a determination that Judge Pascua committed grave abuse of discretion in issuing the twenty (20)-day TRO allegedly in violation of R.A. No. 8975; (b) a determination that he committed grave abuse in granting the prayer for and issuing the writ of preliminary injunction; and (c) a determination that the RTC committed reversible error in ordering petitioners to award the project to JDLC—had been overtaken by supervening events.

The Court identified those supervening events as: (one) the issuance of NTP Phase I by DOH in favor of JDLC on January 23, 2015; (two) the commencement of works on May 31, 2015; (three) JDLC’s estimated seventy percent (70%) accomplishment; and (four) the issuance of NTP Phase II in favor of JDLC for PhP713,868,550.65. The Court reasoned that because DOH issued the Notices to Proceed for Phase I and Phase II, JDLC had already commenced the modernization of the hospital. As a result, any judicial declaration regarding the legality of the TRO, the preliminary injunction, or the RTC’s later decision ordering the award would no longer serve any practical purpose or value.

The Court invoked the concept of moot and academic cases, citing Prof David v. Pres. Macapagal-Arroyo, where the Court defined a moot and academic case as one that ceases to present a justiciable controversy due to supervening events, so that a declaration would have no

Case Syllabus (G.R. No. 212894)

The case involved three consolidated petitions filed by the Department of Health (DOH), represented by the Secretary of Health (then Secretary Enrique T. Ona), and the Secretary of Health as Head of the Procuring Entity (collectively, petitioners).
The petitions were directed against Hon. Bonifacio S. Pascua, Presiding Judge of Branch 56, Regional Trial Court (RTC), Makati City (respondent judge), and against J.D. Legaspi Construction (respondent JDLC).
G.R. No. 212894 was a Petition for Certiorari under Rule 65 of the Rules of Court that assailed the RTC Order dated June 18, 2014, which granted a temporary restraining order (TRO) in favor of JDLC.
G.R. No. 213820 was a Petition for Certiorari under Rule 65 that assailed the RTC Order dated August 7, 2014 and the RTC Writ of Preliminary Injunction dated August 18, 2014.
G.R. No. 213889 was a Petition for Review on Certiorari under Rule 45 of the Rules of Court that assailed the RTC Decision dated August 29, 2014, which granted writs of certiorari and mandamus in favor of JDLC and ordered the award of the project to JDLC.
The Court consolidated the three petitions and later resolved them on mootness after the project proceeded.

Parties and Procedural Posture

Petitioners sued in the Court via three separate procedural routes under Rule 65 and Rule 45, all arising from the same procurement dispute.
Respondent judge acted as the RTC judge who issued the TRO, granted preliminary injunction, and later rendered a decision granting certiorari and mandamus.
Respondent JDLC was the private bidder who sought injunctive relief and then obtained judicial orders reversing the cancellation and compelling award.
Petitioners filed the Rule 65 petition in G.R. No. 212894 after the RTC issued a TRO despite the existence of RA 8975.
Petitioners then filed the Rule 65 petition in G.R. No. 213820 after the RTC required an injunctive bond and issued a writ of preliminary injunction.
Petitioners finally filed the Rule 45 petition in G.R. No. 213889 to challenge the RTC decision ordering the award of the project to JDLC.
The Court ultimately disposed of the consolidated petitions based on supervening events that rendered the requested reliefs non-useful.

Key Factual Allegations

The controversy centered on the bidding of the Dr. Jose Fabella Memorial Hospital infrastructure modernization project, which required transfer to a new site.
The modernization project became imperative because the land Fabella Hospital occupied was owned by Home Guaranty Corporation, requiring Fabella Hospital to transfer.
On February 14, 2013, Architect Maria Rebecca M. Penafiel of the National Center for Health Facility Development (NCHFD) submitted approved terms of reference for Phase 1 to the COBAC Secretariat.
On April 6, 2013, the Invitation to Bid (ITB) for Phase 1 was posted on PhilGEPS.
On June 4, 2013, the ITB was published in the Philippine Star and the Philippine Daily Inquirer, and it was also posted in conspicuous places within the DOH premises.
On June 11, 2013, a pre-bid conference was conducted.
On June 25, 2013, bids were opened and only three bidders were declared eligible, including JDLC.
On July 1, 2013, Tokwing Construction Corporation was initially declared to have submitted the Lowest Calculated Bid.
Tokwing Construction later failed post-qualification because it did not submit certified true copies of necessary documents.
On August 6, 2013, COBAC informed JDLC that it was declared as having submitted the Lowest Calculated Bid.
After review and deliberations, COBAC resolved that JDLC submitted the second Lowest Calculated and Responsive Bid.
On December 11, 2013, COBAC submitted its resolution to the head of the procuring entity.
After advice to review financing options, DOH cancelled the procurement process for the project, and NCHFD informed COBAC Secretariat of the cancellation.
Following the cancellation, JDLC filed a RTC petition for mandamus to address the procurement cancellation.
JDLC later sought amended and supplemental relief before the RTC, contesting the cancellation and praying for award to JDLC.

RTC TRO and Preliminary Injunction

On June 18, 2014, the RTC issued a TRO for twenty (20) days that enjoined DOH from conducting re-bidding or awarding the project or any aspect thereof to any third party, or from acts that would make the main case moot and academic or prejudice JDLC’s rights.
The RTC directed respondent to show cause on July 11, 2014 at 8:30 a.m. as to why a writ of preliminary injunction should not be granted.
Petitioners claimed that the RTC’s issuance of the TRO violated RA 8975, which bans lower courts from issuing restraining orders against National Government Infrastructure Projects.
On August 7,