Kara-an v. Office of the Ombudsman
REITERATIONFacts
The Antecedents: Petitioner Remberto C. Kara-an filed a complaint against the Board of Directors of the Al-Amanah Islamic Investment Bank of the Philippines ("Islamic Bank") for alleged violation of Republic Act No. 3019 ("RA 3019"). Petitioner claimed that the "clique of six" granted a loan of ₱250,000 to Compressed Air Machineries & Equipment Corporation ("CAMEC") without valid collateral and approved a real estate mortgage without requiring the cancellation of a prior subsisting mortgage and without the written consent of the first mortgagee, thus entering into a contract manifestly and grossly disadvantageous to the government. Procedural History: The complaint was endorsed to the Ombudsman, who required the respondents (incumbent and former members of the Bank's Board) to comment. Respondents stated they were not members of the Board when the CAMEC transaction occurred in 1986. Petitioner alleged their failure to disclose predecessors' names made them participants in the crime. The Ombudsman dismissed the complaint for lack of merit, reasoning that respondents were not yet directors at the time of the transaction and that if the transaction began during their term, subordinate officials, including the complainant, were responsible for the alleged misconduct. The Ombudsman denied petitioner's motion for reconsideration, reiterating that respondents were appointed after the 1986 EDSA Revolution and thus could not have approved the 1986 loan. The Petition: Petitioner seeks to reverse the Ombudsman's Resolution and Order, alleging that the Ombudsman officials failed to conduct appropriate investigations and committed grave abuse of discretion.
Issue(s)
Whether the Ombudsman officials conducted appropriate investigations according to their mandates. Whether crimes have been committed. Whether Tupaan A. Datu-Imam, Michael O. Mastura, Farouk A. Carpizo, and other members of the Philippine Amanah Bank Board of Directors are guilty or liable. Whether the Ombudsman officials acted with patent grave abuse of discretion amounting to excess or lack of jurisdiction.
Ruling
The Supreme Court affirmed the Resolution dated 27 January 1995 and the Order dated 17 April 1995 of the Office of the Ombudsman, dismissing the petition for lack of merit.
Ratio Decidendi
On the propriety of the remedy and the Ombudsman's investigatory powers: The Court held that a petition for review on certiorari under Rule 45 is the wrong remedy for decisions of the Ombudsman in preliminary investigations of criminal cases; a petition for certiorari under Rule 65 is appropriate when alleging grave abuse of discretion. The Court reiterated its policy of non-interference with the Ombudsman's constitutionally mandated investigatory and prosecutory powers, emphasizing that the Ombudsman has the sole power to investigate and prosecute acts or omissions of public officials. The Court will not substitute its judgment for that of the Ombudsman unless there is a clear showing of grave abuse of discretion amounting to lack or excess of jurisdiction. The Ombudsman has discretion on whether to conduct a preliminary investigation and can dismiss a complaint outright for lack of merit, even after requiring comments from respondents. On whether the dismissal of the complaint was proper: The Court found no grave abuse of discretion on the part of the Ombudsman. The Ombudsman correctly dismissed the complaint because the respondents, except for Farouk A. Carpizo, were not yet directors of the Bank's Board when the CAMEC loan was approved in 1986. The Ombudsman's finding that the complainant himself, as Officer-in-Charge of the Makati Branch, was responsible for screening loan applications and that subordinate officials made favorable reports to the Board was also upheld. The Court cannot compel the Ombudsman to order the production of documents if, in its judgment, they are not necessary to establish probable cause. On the dismissal of the charge against Farouk A. Carpizo: The Court sustained the Ombudsman's dismissal of the charge against Carpizo. Although Carpizo was a director when the loan was approved, the mere fact of processing and approval during his incumbency did not automatically establish probable cause against him without a showing of his personal participation in any irregularity. The Ombudsman correctly noted that subordinate officials had studied and favorably endorsed the loan. On the denial of the motion for reconsideration or reinvestigation: The Court found the denial proper. The petitioner's motion largely shifted blame to other individuals (Datu-Imam and Mastura) and reiterated arguments already passed upon. The Ombudsman's finding that the petitioner was the officer-in-charge at the time of the loan's release, even if he did not screen the application, was not denied. The Court noted that releasing loan proceeds without verifying mortgage documents could still constitute liability. The Court also commented on the petitioner's verbose pleadings.
Main Doctrine
The Supreme Court will not interfere with the Ombudsman's exercise of its constitutionally mandated investigatory and prosecutory powers, including the discretion to dismiss a complaint for lack of merit, unless there is grave abuse of discretion amounting to lack or excess of jurisdiction. A petition for review on certiorari under Rule 45 is the wrong remedy for decisions of the Ombudsman in preliminary investigations of criminal cases; a petition for certiorari under Rule 65 is appropriate when alleging grave abuse of discretion.