Case Summary (G.R. No. 168914)
Background and Initial Proceedings
On October 24, 2002, Margarita A. Adala applied to the NWRB for a Certificate of Public Convenience (CPC) to operate and maintain a waterworks system in the sitios of San Vicente, Fatima, and Sambag in Barangay Bulacao, Cebu City. During the initial hearing on December 16, 2002, the MCWD, a government-owned and controlled corporation created under Presidential Decree No. 198, opposed Adala's application. Despite MCWD's formal opposition being mailed prior to the hearing, the NWRB had not yet received it that day. Adala's counsel presented a copy of MCWD's opposition to the hearing officer.
MCWD's opposition was based on three main grounds: lack of consent from its Board of Directors for the issuance of the franchise, potential interference with MCWD's water supply, and the assertion that local residents were adequately served by MCWD. After reviewing the evidence and conducting an ocular inspection, the NWRB dismissed MCWD's opposition on September 22, 2003, stating it lacked merit and ruled in favor of Adala, granting her a CPC for a five-year period, with specified rates for water consumption.
RTC Decision and Appeal
MCWD's motion for reconsideration to the NWRB was denied on May 17, 2004. Consequently, MCWD appealed to the RTC of Cebu City, which upheld the NWRB's decision on February 10, 2005, and denied MCWD’s motion for reconsideration on May 13, 2005. This initiated MCWD's current petition for review, which presents two primary questions of law.
Key Legal Issues
The first question centers on whether the consent of the MCWD's Board of Directors is a prerequisite for the NWRB to grant a CPC. The second issue concerns the interpretation of the term "franchise" under Section 47 of P.D. 198, probing whether it refers solely to franchises granted through congressional legislation or also includes CPCs issued by the NWRB.
Procedural Grounds and Authority
Respondent Adala challenges the petition on procedural grounds, arguing that MCWD's General Manager, Engineer Armando H. Paredes, lacked specific authorization to file the petition. Drawing from established jurisprudence, Adala asserts that without a board resolution explicitly granting Paredes authorization for this particular instance, the petition should be dismissed.
MCWD contends that such an authorization exists, as reflected in Board of Directors Resolution No. 015-2004, which grants Paredes the authority to file cases on behalf of the corporation. The court finds that this resolution did not expressly empower Paredes to sign verifications and certifications related to forum shopping, potentially undermining the validity of the petition.
Interpretation of "Franchise"
MCWD argues that under Section 47 of P.D. 198, consent by the Board of Directors is a sine qua non condition for granting a CPC, extending the definition of "franchise" to include CPCs issued by the NWRB. In contrast, Adala posits that the term specifically applies only to franchises originating from congressional legislation. The NWRB resolution characterizes a CPC simply as a formal authority for operating a utility for which a franchise is not legally required.
The court acknowledges the implications of a narrow interpretation that might permit CPCs to be granted without BOd consent, effectively rendering the exclusive franchise concept meaningless. Drawing from past judgments, the court interprets "franchise" broadly, i
...continue readingCase Syllabus (G.R. No. 168914)
Case Overview
- The case involves a petition for review on certiorari challenging the Decision of the Regional Trial Court (RTC) of Cebu dated February 10, 2005.
- The RTC affirmed the Decision of the National Water Resources Board (NWRB) dated September 22, 2003, which favored respondent Margarita A. Adala.
- The core issue relates to the issuance of a Certificate of Public Convenience (CPC) for the operation of a waterworks system in certain sitios in Barangay Bulacao, Cebu City.
Background of the Case
- Respondent Margarita A. Adala filed an application with the NWRB on October 24, 2002, for a CPC to operate a waterworks system in specific areas.
- During the initial hearing on December 16, 2002, Adala presented proof of compliance with jurisdictional requirements, while the Metropolitan Cebu Water District (MCWD) opposed the application.
- MCWD's opposition was based on three grounds:
- Lack of consent from its Board of Directors for the issuance of the franchise.
- Potential interference with MCWD's existing water supply rights.
- Adequate service already being provided to the residents by MCWD.
NWRB Decision
- The NWRB dismissed MCWD's opposition, citing lack of merit and ruled in favor of Adala.
- The CPC was granted for five years with specific approved rates for water consumption.
- Recommendations were made for improved water supply infrastructure.