Dominguez v. Castillejos Consumers Assn.
CLARIFICATIONFacts
1. The Antecedents: The underlying dispute concerns the removal of the petitioners, members of the Board of Directors of Zambales II Electric Cooperative, Inc. (ZAMECO II), from their positions. The complaint was initiated by the Castillejos Consumers Association, Inc. (CASCONA), an organization of electric consumers served by ZAMECO II, seeking the petitioners' removal based on a June 25, 1998 Financial Audit Report of ZAMECO II for the period January 1, 1989, to September 30, 1997. The National Electrification Administration (NEA), after proceedings before its Administrative Committee, issued a resolution on November 24, 2004, removing the petitioners from office and disqualifying them from holding similar positions in the future. This resolution was based on the NEA-ADCOM's report and a July 24, 2003 Audit Report, which the petitioners claimed they were not notified of, thus denying them due process. 2. Procedural History: The petitioners first sought reconsideration from the NEA, which was denied, and then elevated the matter to the Court of Appeals (CA) via a Rule 43 petition (CA-G.R. No. SP 88845), challenging the NEA's resolution and decision. Concurrently, they filed a separate Rule 65 special civil action with the CA (CA-G.R. SP No. 88195), questioning the NEA's designation of a Project Supervisor. The CA consolidated these cases and, on October 4, 2006, denied both petitions, and subsequently denied their motion for reconsideration. The petitioners then filed the present Rule 45 petition for review with the Supreme Court, which, in a March 13, 2009 decision, remanded the case to the CA to resolve the factual issue of ZAMECO II's registration with the Cooperative Development Authority (CDA) to determine the NEA's continued jurisdiction. The CA submitted its report on March 25, 2010, finding that ZAMECO II's registration with the CDA did not comply with the referendum requirement under the Electric Power Industry Reform Act (EPIRA) Implementing Rules. 3. The Petition: The petitioners filed a Rule 45 petition for review with the Supreme Court, arguing that the EPIRA abrogated the NEA's power over electric cooperatives and that they were denied due process, later filing a supplemental petition asserting that ZAMECO II's registration with the CDA on December 4, 2007, had divested the NEA of its jurisdiction. The Supreme Court, in its March 13, 2009 decision, acknowledged the due process violation but found substantial evidence for removal, remanding the case to the CA to determine the validity of ZAMECO II's registration with the CDA. The CA's subsequent report indicated non-compliance with conversion requirements, leading the Supreme Court, in its final resolution, to deny the petition, holding that ZAMECO II's failure to comply with the referendum requirement under the EPIRA and the Cooperative Code meant its registration with the CDA was invalid, thus preserving the NEA's jurisdiction.
Issue(s)
Whether the National Electrification Administration (NEA) retained jurisdiction to enforce its removal order against the petitioners despite ZAMECO II's subsequent registration with the Cooperative Development Authority (CDA). Whether ZAMECO II's registration with the CDA was valid, thereby ousting the NEA of its supervisory and disciplinary jurisdiction. Whether R.A. No. 9520, or the Philippine Cooperative Code of 2008, impliedly repealed the NEA's jurisdiction over electric cooperatives registered with the CDA.
Ruling
WHEREFORE, premises considered, the Court DENIES the petition with finality for lack of merit. Costs against the petitioners.
Ratio Decidendi
Yes, the NEA retained jurisdiction. The Court reiterated its March 13, 2009 Decision, holding that the NEA's regulatory and disciplinary power over electric cooperatives, as granted by P.D. No. 269 as amended by P.D. No. 1645, is not dependent on any creditor-debtor relationship. The passage of the EPIRA, which transferred the financial obligations of electric cooperatives to PSALM, did not abrogate the NEA's power of supervision and control, including its authority to investigate and impose disciplinary sanctions on the board of directors. The EPIRA itself, in Section 58, expressly states that the NEA shall continue to exercise its functions under P.D. No. 269, as amended, insofar as they are consistent with the Act. Therefore, the NEA's jurisdiction, which had already attached when the complaint was filed in 2002, continued to exist. No, ZAMECO II's registration with the CDA was not valid. Based on the CA's factual findings upon remand, ZAMECO II failed to comply with the mandatory conversion requirements under the EPIRA and its Implementing Rules and Regulations. Specifically, ZAMECO II did not conduct the required referendum to secure the approval of a simple majority of its members for its conversion into a stock cooperative. The petitioners' counsel even admitted this failure during the CA proceedings. A mere issuance of a certificate of registration by the CDA, without complying with the substantive and procedural requirements for conversion, does not validly place an electric cooperative outside the NEA's jurisdiction. The Court emphasized that the registration was merely a 'paper registration' and could not be used to subvert the NEA's authority. No, R.A. No. 9520 did not impliedly repeal the NEA's jurisdiction. The Court, applying principles of statutory construction, held that repeals by implication are not favored. A holistic reading of R.A. No. 9520 reveals that it did not dispense with the conversion requirements. In fact, Articles 127 and 128 of said law continued the requirement of a referendum for an electric cooperative's registration with the CDA. The law distinguishes between cooperatives 'duly registered' (which requires compliance with conversion procedures like the referendum) and those 'deemed registered' (which applies to cooperatives that validly registered under the old Cooperative Code within the prescribed period). Since ZAMECO II failed to comply with the referendum requirement under the EPIRA, it cannot be considered 'duly registered' under R.A. 9520, and thus remains under the NEA's jurisdiction. Furthermore, the subsequent enactment of R.A. No. 10531 (NEA Reform Act of 2013) further strengthened and confirmed the NEA's supervisory powers over all electric cooperatives, regardless of their registration status.
Main Doctrine
The National Electrification Administration (NEA) retains its supervisory and disciplinary jurisdiction over electric cooperatives organized under Presidential Decree No. 269, as amended, unless the cooperative has validly converted and registered with the Cooperative Development Authority (CDA). A mere issuance of a CDA certificate of registration is insufficient to oust the NEA of its jurisdiction. The cooperative must strictly comply with the statutory requirements for conversion, such as the conduct of a referendum as mandated by the Electric Power Industry Reform Act of 2001 (EPIRA) and its implementing rules, and subsequently by the Philippine Cooperative Code of 2008.