Maria Elena Malaga, et al. vs. Manuel R. Penachos Jr. et al.

GR No. 86695 September 3, 1992

FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualification, Bids and
Awards Committee (PBAC) caused the publication for an Invitation to Bid for the construction of
a Micro Laboratory Building. The notice announced that the last day for submission of prequalification requirements (PRE-C1) was 2 December 1988, and that the bids would be opened
on 12 December 1988 at 3 pm. Petitioners Malaga and Najarro submitted their PRE-C1 at 2pm
of 2 December 1988 while petitioner Occena submitted on 5 December 1988. All three were not
allowed to participate in the bidding because their documents were considered late, having
been submitted after the cut-off time of 10 am of 2 December 1988. On 12 December,
petitioners file a complaint with the RTC against the chairman and PBAC members, claiming
that although they submitted their PRE-C1 on time, the PBAC refused without just cause to
accept them. On the same date, respondent Judge Labaquin issued a restraining order
prohibiting PBAC from conducting the bidding and awarding the project. On 16 December,
defendants filed a motion to lift the restraining order on the ground that the Court was prohibited
from issuing restraining orders, preliminary injunctions and preliminary mandatory injunctions by
PD No. 1818, which provides: Section 1. No court in the Philippines shall have jurisdiction to
issue any restraining order in any case, dispute, or controversy involving an infrastructure
project of the government to prohibit any person or persons, entity or government official
from proceeding with, or continuing the execution or implementation of any such project
Plaintiffs argue against the applicability of PD No. 1818, pointing out that while ISCOF was a
state college, it had its own charter and separate existence and was not part of the national
government or of any local political subdivision; that even if PD No. 1818 were applicable, the
prohibition presumed a valid and legal government project, not one tainted with anomalies like
the project at bar. On 2 January 1989, the RTC lifted the restraining order and denied the
petition for preliminary injunction. It declared that the building sought to be constructed was an
infrastructure project of the government falling within the coverage of PD 1818.
ISSUE: Whether or not the ISCOF is considered a government instrumentality such that it
would necessarily fall under the prohibition in PD 1818.
HELD: Yes, the 1987 Administrative Code defines a government instrumentality as follows:
Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This includes regulatory agencies, chartered institutions, and
GOCCs. The same Code describes a chartered institution thus: Chartered Institutionrefers to
any agency organized or operating under a special charter, and vested by law with functions
relating to specific constitutional policies or objectives. This includes state universities and
colleges, and the monetary authority of the state. It is clear from the above definitions that
ISCOF is a chartered institution and is therefore covered by PD 1818. HOWEVER, it is apparent
that the present controversy did not arise from the discretionary acts of the administrative body
nor does it involve merely technical matters. What is involved here is non-compliance with the
procedural rules on bidding which required strict observance. PD 1818 was not intended to

shield from judicial scrutiny irregularities committed by administrative agencies such as the
anomalies in the present case. Hence, the challenged restraining order was not improperly
issued by the respondent judge and the writ of preliminary injunction should not have been
denied.

Beja Sr. vs. Court of Appeals

207 SCRA 689
FACTS: Fidencio Beja Sr. an employee of Philippine ports authority, hired as Arrastre supervisor
in 1975. and later on appointed as terminal supervisor in 1988. On October 21, 1988, the
General Manager, Rogelio A. Dayan filed administrative case against Beja Sr. and Villaluz for
grave dishonesty. Grave misconduct willful violation of reasonable office rules and regulations
and conduct prejudicial to the best interest of the service. Consequently they were preventively
suspended for the charges. After preliminary investigation conducted by the district attorney for
region X, administrative case no. 11-04-88 was considered closed for lack of merit. On
December 13, 1988 another administrative case was filed against Beja by the PPA manager
also for dishonesty grave misconduct violation of office rules and regulations, conduct
prejudicial to the best interest of the service and for being notoriously undesirable. Beja was
also placed under preventive suspension pursuant to sec. 412 of PD No. 807. The case was
redocketed as administrative case n o. PPA-AAB-1-049-89 and thereafter, the PPA indorsed it
to the AAB for appropriate action. The AAB proceeded to hear the case and gave Beja an
opportunity to present evidence. However, on February 20, 1989, Beja filed petition for
certiorari with preliminary injunction before the Regional Trial Court of Misamis Oriental. Two
days later, he filed with the ABB a manifestation and motion to suspend the hearing of
administrative case no. PPA-AAB-1-049-89 on account of the pendency of the certiorari
proceeding before the court. AAB denied the motion and continued with the hearing of the
administrative case. Thereafter, Beja moved for the dismissal of the certiorari case and
proceeded to file before the Court for a petition for certiorari with preliminary injunction and/or
temporary restraining order.
ISSUE: Wether or not the Administrative Action Board of DOTC has jurisdiction over
administrative cases involving personnel below the rank of Assistant General Manager of the
Philippine Ports Authority, an attached agency of DOTC.
HELD: The PPA General Manager is the disciplining authority who may, by himself and without
the approval of the PPA Board of Directors, subject a respondent in an administrative case to
preventive suspension. His disciplining powers are sanctioned not only by Sec.8 of PD no. 857
but also by Sec. 37 of PD no. 807 granting the heads of agencies the Jurisdiction to investigate
and decide matters involving disciplinary actions against officers and employees in the PPA.
With respect to the issue, the Court qualifiedly rules in favor of the petitioner. The PPA was
created through PD no. 505 dated July 1974. Under the Law, the corporate powers of the PPA
were vested in a governing Board of Directors known as the Philippine Ports Authority Council.
Sec. 5(i) of the same decree gave the council the power to appoint, discipline and remove, and
determine the composition of the technical staff of the authority and other personnel. On
December 23, 1975, PD no. 505 was substituted by PD no. 857 sec. 4(a) thereof created the

Philippine Ports Authority which would be attached to the then Department of Public Works,
Transportation and Communication. When Executive order no. 125 dated January 30, 1987
reorganizing the Ministry of Transportation and Communication was issued, the PPA retained its
attached status. Administrative Code of 1987 classiffied PPA as an attached agency to the
DOTC. Book IV of the Administrative Code of 1987, the other two being supervision and control
and administrative supervision, Attachment is defined as the lateral relationship between the
department or its equivalent and the attached agency or corporation for purposes of policy and
program coordination. An attached agency has a larger measure of independence from the
Department to which it is attached than one which is under departmental supervision and
control or administrative supervision. This is borne out by the lateral relationship between the
Department and the attached agency. The attachment is merely for policy and program
coordination. With respect to administrative matters, the independence of an attached agency
from the department control and supervision is furthermore reinforced by the fact that even an
agency under a Departments administrative supervision is free from Departmental interference
with respect to appointments and other personnel actions in accordance with the
decentralization of personnel functions under the administrative Code of 1987. The Law
impliedly grants the general Manager with the approval of the PPA board of Directors the power
to investigate its personnel below the rank of Assistant Manager who may be charged with an
administrative offense. During such investigation, the PPA General Manager, may subject the
employee concerned to preventive suspension. The investigation should be conducted in
accordance with the procedure set out in Sec. 38 of PD no. 807. The Decision of the Court of
Appeal is AFFIRMED as so far as it upholds the power of the PPA General Manager to to
subject petitioner to preventive suspension and REVERSED insofar as it validates the
jurisdiction of the DOTC and/or the AAB to act on administrative case no. PPA AAB-1-049-89.
The AAB decision in said cased is hereby declared NULL and VOID and the case is
REMANDED to the PPA whose General Manager shall conduct with dispatch its reinvestigation.