Standard Chartered Bank (Philippine Branch), Paul Simon Morris, Sundara

Ramesh, Owen Belman, Sanjay Aggarwal, Rajamani Chandrashekar,

Marivel Gonzales, Ma. Ellen Victor, Chona G. Reyes, Zenaida Iglesias,
Ramona Bernad, Michaelangelo Aguilar, and Fernand Tansingco,
petitioners, vs. Senate Committee on Banks, Financial Institutions and
Currencies, as represented by its Chairperson, Hon. Edgardo J. Angara,
respondent
Nachura, J. (27 December 2007)
Facts:
Before February 1, 2005, Senator Enrile introduced P.S. Resolution No. 166.
On February 1, 2005, Senator Enrile delivered a privilege speech denouncing SCBPhilippines for selling unregistered foreign securities in violation of the Securities
Regulation Code (R.A. No. 8799) and urging the Senate to immediately conduct an
inquiry, in aid of legislation, to prevent similar fraudulent activity. The
aforementioned Senate Committee, acting through Senator Angara, set the initial
hearing on February 28, 2005.
In turn, SCB-Philippines submitted to the Senate Committee a
letter dated February 24, 2005, stressing that there were cases pending in court
allegedly involving the same issues in the legislative inquiry, thereby challenging
the jurisdiction of the Committee to continue with the inquiry. The investigation
started on February 28, 2005. Senator Enrile moved that subpoenaes be issued to
those who did not attend the hearing and that the Senate request the Department
of Justice, through the Bureau of Immigration and Deportation, to issue an HDO
against them and/or include them in the Bureaus Watch List, a motion that was
approved.
Towards the end of the hearing, SCB-Philippines made an Opening
Statement that brought to the attention of the Senate Committee the lack of proper
authorization from affected clients for the bank to make disclosures of their
accounts and the lack of copies of the accusing documents mentioned in Senator
Enrile's privilege speech, and reiterated that there were pending court cases
regarding the alleged sale in the Philippines by SCB-Philippines of unregistered
foreign securities. The February 28, 2005 hearing was then adjourned without a
clear subsequent hearing date. The petitioners were later served
with subpoenae ad testificandum and duces tecum to compel them to attend and
testify at a hearing set on March 15, 2005. As such, this Petition for Prohibition (With
Prayer for Issuance of Temporary Restraining Order and/or Injunction) was filed by
the petitioners.
Issues:
1. Whether or not, by citing Bengzon, Jr. v. Senate Blue Ribbon Committee, the
issue that SCB-Philippines illegally sold unregistered foreign securities is
already preempted by the courts that took cognizance of the foregoing cases,
thus leading to the Senate Committee encroaching upon the judicial powers
vested solely in these courts with this inquiry
2. Whether or not the inquiry was actually in aid of collection.

3. Whether or not the Senate Committee has the power to hold the petitioners
in contempt
4. Whether or not the petitioners right to privacy has been violated
Held:
1. The Bengson ruling does not apply in this case.
2. No, it is not.
3. Yes, it has the power to hold the petitioners in contempt. Also, the Committee
is justified in holding the petitioners in contempt.
4. No, it has not been violated.
Ratio:
1. In the Bengson ruling, the inquiry was not in aid of legislation. Thus, the Court
held that the requested probe failed to comply with Article VI, Section 21 of
the Constitution. P.S. Resolution No. 166 stated that the inquiry was in aid of
legislation, so Article VI, Section 21 is not violated. Furthermore, the mere
filing of a criminal or an administrative complaint before a court or a quasijudicial body does not automatically bar the conduct of legislative
investigation. The exercise of sovereign legislative authority is not
subordinate to a criminal or administrative investigation.
2. Atty. Bocobo did not file a complaint before the Senate to recover his
investment. As confirmed during the initial hearing on February 28, 2005, he
requested the Senate to conduct an inquiry into the purportedly illegal
activities of SCB-Philippines, in order to prevent similar fraudulent activity by
banks in general. Baviera, on the other hand, was not a complainant, but a
witness in the investigation.
3. The exercise by Congress or by any of its committees of the power to punish
contempt is based on the principle of self-preservation: As the branch of the
government vested with legislative power, Congress can assert its authority
and punish disobedient acts. Such power is sui generis, as it attaches not to
the discharge of legislative functions, but to the sovereign character of the
legislature as one of the 3 independent and coordinate branches of
government. The petitioners statement that the investigation was in aid of
collection is a direct challenge against the authority of the Senate
Committee, as it ascribes ill motive to the latter, thus justifying holding them
in contempt.
4. The right to privacy is not an absolute right. Legitimate congressional
inquiries can, in some instances, overrule the right to privacy. Employing
the rational basis relationship test, there is no infringement of the individuals
right to privacy as the requirement to disclosure information is for a valid
purpose.