G.R. No. 227467 - Dissenting Opinion




G.R. No. 227467, August 3, 2021, ♦ Decision, Zalameda, [J] ♦ Dissenting Opinion, Leonen, [J] ♦ Concurring Opinion, Caguioa, [J] [ G.R. No. 227467. August 03, 2021 ] ATTY. JOAQUIN DELOS SANTOS, ENGR. EVELYN M. HATULAN AND CORNELIO V. TAMAYO, PETITIONERS, VS. COMMISSION ON AUDIT, RESPONDENT. DISSENTING OPINION LEONEN, J.: The Commission on Audit is bound to adhere to the fundamental requirements of due process in its proceedings. An accused should be duly informed of the charges against them and be given an opportunity to defend themself. Failure to observe their due process rights taints the whole administrative proceedings with invalidity. Before this Court are Atty. Joaquin Delos Santos; Engr. Evelyn M. Hatulan; and Cornelio V. Tamayo (Delos Santos, et al.), all members of the Bids and Awards Committee who, along with other local public officers1 of the government of Cabuyao, Laguna, were named accountable to pay P42,594,037.69 under Notice of Disallowance No. 2007-036-101(04),2 owing to a "suspension maturing into disallowance." This Notice of Disallowance was issued on November 19, 2007, well after Notice of Suspension No. 2007-002-101 (2004)3 dated February 26, 2007 had lapsed. It referred to Audit Observation Memorandum No. 2004-009-101, issued on October 14, 2004, and to another Memorandum issued on September 28, 2004, both of which required the submission of pertinent documents on the Cabuyao government's projects or contracts with Golden Deer Enterprises and RDC Construction Development Corporation.4 Delos Santos, et al. contended that they only learned about the Notice of Disallowance in 2013, when they received a Notice of Finality of Decision5 and an Order of Execution6 from the Commission on Audit, both dated September 3, 2012. On February 21, 2013, they requested a review of these issuances and copies of the material documents so they could answer the charges against them.7 However, Regional Director Nilda M. Blanco of the Commission on Audit denied their request. She reasoned that the Notice of Disallowance showed that petitioners had received it; that the disallowance became final and executory when no appeal was filed within six months from receipt; and that a review of the issuances was not in the Rules and Regulations on Settlement of Accounts and the 2009 Revised Rules of Procedure of the Commission on Audit.8 On September 17, 2013, Delos Santos, et al. filed an Omnibus Motion, praying that the Commission on Audit set aside the Notice of Finality of Decision and the Order of Execution, release the pertinent documents, and admit their appeal. They maintained that they were denied due process for not receiving the Notice of Disallowance.9 In an April 13, 2015 Decision,10 the Commission on Audit denied the Omnibus Motion. It denied Delos Santos, et al.'s claim of not receiving the Notice of Disallowance since their supposed signatures appeared on it. As such, the Commission ruled that the disallowance had become final.11 Delos Santos, et al. moved for reconsideration, but were denied on the same ground.12 Hence, they filed this Petition.ᇈWᑭHIL Petitioners assert that the Commission on Audit gravely abused its discretion in upholding the Notice of Finality of Disallowance and the Order of Execution. They maintain that they were denied due process because they did not receive the Notice; that their signatures were forged; and that the Notice itself did not specify the projects or contracts covered. They add that there was no bids and awards committee around that time, and no records were on file with the city hall certifying that the committee existed then.13 The majority rejects petitioners' claim that they did not receive the Notice of Disallowance. It adds that they failed to prove by clear and convincing evidence that their signatures had been forged.14 Even so, the majority holds that the case should be remanded to the Commission on Audit to conduct an exhaustive investigation on the matter and allow petitioners the opportunity to thoroughly ventilate their defenses.15 To the majority, the Notice of Disallowance was defective because it did not specify the facts and law on which the Commission on Audit's conclusions were reached. Citing Estalilla v. Commission on Audit,16 it held that the Commission on Audit should not have strictly applied the rule on immutability of judgment given the disparity in petitioners' salaries and the amount to which they are being made accountable.17 Finally, the majority finds that there must be an exhaustive investigation on the procurement process involving the two contractors, including the extent of the participation of petitioners and the responsible officers of the procuring entity in the disallowed transaction.18 I dissent. The Commission on Audit's outright denial of the Omnibus Motion deprived petitioners of their rights to due process, amounting to grave abuse of discretion. Due process in administrative proceedings demands that the tribunal properly inform a party of the charges against them, and afford them the opportunity to present their defenses and supporting evidence, which it must consider in making its decision.19 The essence of due process is the opportunity to be heard.20 In Ledesma v. Court of Appeals:21 Due process is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or ruling complained of.22 (Citations omitted) At its basic, administrative due process is about fairness in the conduct of proceedings.23 What is offensive to due process is the denial of the opportunity to be heard.24 In Fontanilla v. Commissioner Proper,25 this Court held that the petitioner was denied due process when he had not been informed of being possibly liable for the loss of government funds and was not able to explain his side in the entire fact-finding process. The case originated from his subordinate who, after having lost public funds, requested relief from money accountability. The Regional Director denied this request, and upon review, the Adjudication and Settlement Board did the same. Curiously, only at that late stage of review was Fontanilla brought in and held solidarily liable with his subordinate. In rejecting the Commission on Audit's contention that there was no denial of due process because Fontanilla was able to appeal, this Court held: While we have ruled in the past that the filing of a motion for reconsideration cures the defect in procedural due process because the process of reconsideration is itself an opportunity to be heard, this ruling does not embody an absolute rule that applies in all circumstances. The mere filing of a motion for reconsideration cannot cure the due process defect, especially if the motion was filed precisely to raise the issue of violation of the right to due process and the lack of opportunity to be heard on the merits remained. In other words, if a person has not been given the opportunity to squarely and intelligently answer the accusations or rebut the evidence presented against him, or raise substantive defenses through the proper pleadings before a quasi-judicial body (like the COA) where he or she stands charged, then a due process problem exists. This problem worsens and the denial of his most basic right continues if, in the first place, he is found liable without having been charged and this finding is confirmed in the appeal or reconsideration process without allowing him to rebut or explain his side on the finding against him. Time and again, we have ruled that the essence of due process is the opportunity to be heard.ℒαwρhi৷ In administrative proceedings, one is heard when he is accorded a fair and reasonable opportunity to explain his case or is given the chance to have the ruling complained of reconsidered.26 (Emphasis supplied, citations omitted) In Uy v. Commission on Audit,27 this Court found it unfair that the Commission on Audit held the respondent personally liable for the petitioners' claims without giving him an opportunity to be heard and to present evidence in his defense. It held: Accordingly, the fundamental requirements of procedural due process cannot be violated in proceedings before the COA. In the case at bar, former Governor Paredes was never made a party to nor served a notice of the proceedings before the COA. While administrative agencies exercising quasi-judicial powers are not hidebound by technical procedures, nonetheless, they are not free to disregard the basic demands of due process. Notice to enable the other party to be heard and to present evidence is not a mere technicality or a trivial matter in any administrative proceedings but an indispensable ingredient of due process. It would be unfair for COA to hold former Governor Paredes personally liable for the claims of petitioners amounting to millions of pesos without giving him an opportunity to be heard and present evidence in his defense. Our rulings holding that public officials are personally liable for damages arising from illegal acts done in bad faith are premised on said officials having been sued both in their official and personal capacities.28 (Emphasis supplied, citations omitted) Here, petitioners claim being denied due process as they were not given a copy of the Notice of Disallowance, and the first time they learned of it was when they received the Notice of Finality of Decision and Order of Execution. The Notice did not specify the covered projects or transactions, but merely referred to the Notice of Suspension and two Memoranda, copies of which were likewise not furnished to petitioners.29 The Commission on Audit, however, brushed aside their claims simply because of the purported signatures appearing beside their names in the Notice.30 At the very least, the Commission on Audit should have verified whether the signatures appearing on the Notice were indeed petitioners'. If petitioners' disclaimers were true, then the failure to file an appeal within the prescribed period would not have been their fault. The disallowance, therefore, could not have attained finality. Parenthetically, the majority has found the Notice of Disallowance itself to be defective for failure to specify the facts and the law on which the charges were made. Petitioners were also not given a real opportunity to present their side. After receiving the issuances, petitioners immediately sought their review and copies of the documents material to the case. Yet, their request was denied since the disallowance had already become final. Petitioners still moved for the Commission on Audit to set aside the issuances, release the documents, and admit their appeal. Yet again, their Omnibus Motion was denied on the ground of the disallowance's finality. Petitioners were utterly denied due process before being held liable. They were neither afforded the opportunity to defend their interests nor furnished with the material documents they requested, foreclosing their efforts to know the available remedies and adequately prepare for plausible defenses. As Buscaino v. Commission on Audit31 teaches, due process mandates that "every respondent be apprised of the nature and cause of the charge against [them], and the evidence in support thereof be shown or made available to [them] so that [they] can meet the charge with traversing or exculpatory evidence."32 That was not the case here. Petitioners' appeal was not even admitted and ruled on its merits. Considering the significant amount involved, the Commission on Audit should have endeavored not only to investigate whether petitioners were indeed served copies of the Notice of Disallowance, but more important, to determine the substantive aspect of their participations in the disallowed transactions and projects. What made a thorough review more impelling were petitioners' allegations that: (1) the mayor had been excluded by the Regional Director from liability for merely approving the payments and ensuring the completeness of documents with the municipal accountant;33 (2) no bids and awards committee was constituted at that time;34 and (3) there were no records on file with the city hall that the committee existed.35 Procedural rules cannot outweigh one's constitutionally guaranteed rights.36 Yet, here, the Commission on Audit blindly adhered to the procedural rules when it denied petitioners' appeal on the ground that the Notice of Disallowance had become final. In Bangko Sentral ng Pilipinas v. Commission on Audit,37 this Court stressed that the Commission on Audit's mandate to examine audit and settle government accounts and funds does not give it the authority to disregard the basic requirements of due process. Its action in that case was found to be tainted with grave abuse of discretion. Said this Court: It was an error amounting to grave abuse of discretion to hold Yap liable, and Dequita and the other bank officers of the Cotabato Branch jointly and solidarily liable with Yap for the cash shortage without an actual complaint being filed and without giving them the chance to defend themselves. Thus, the assailed Decision violated the basic tenets of due process and must be annulled and set aside.38 (Emphasis supplied) This Court has recognized certain justifications to suspend the rigid application of procedural rules, including the rule on immutability of judgments, such as: (a) matters of life, liberty, honor or property; (b) the existence of special or compelling circumstances; (c) the merits of the case; (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (e) lack of any showing that the review sought is merely frivolous and dilatory; and (f) the other party will not be unjustly prejudiced thereby.39 (Citations omitted) In Lanto v. Commission on Audit,40 this Court set aside the Commission on Audit's decision, despite its immutability, insofar as the petitioner's personal liability for the disallowance was concerned. This Court considered his right to property, the existence of compelling circumstances, and the merits of the case as sufficient justifications: First of all, the adverse result would surely make her personally liable for a substantial sum of monetary liability from which she had not directly benefited, thereby prejudicing her right to property. Secondly, the petitioner's good faith in certifying to the correctness of the payrolls based on available records about Labrador having actually reported to work, and on her absolute lack of knowledge of his having been dismissed and of the pendency of the criminal case in the Sandiganbayan constituted compelling circumstances that justified applying the exception in her favor. . . . . . . . And, thirdly, the fact that the petitioner was on foreign assignment when the COA rendered the assailed issuances plausibly explained why she did not seasonably assail or oppose the disallowances. We point out that the insistence of the COA that the POEA had filed in her behalf a motion for reconsideration during her absence from the country on a foreign assignment without the indication that she had expressly authorized the POEA to do so did not suffice to now defeat her right to be heard. Verily, only she could have exercised the right to be heard upon a matter that would subject her under the law to personal liability. In light of the foregoing circumstances, the COA's directive to withhold the petitioner's salary was void and produced no legal effect. As such, the assailed COA issuances did not attain finality and immutability as to her.41 (Citations omitted) More recently, in Ablong v. Commission on Audit,42 this Court has set aside the Commission on Audit's decision for violating a party's due process rights. We said: It is true that a Notice of Finality of Decision and an Order of Execution had already been rendered in this case. However, considering the non-observance of petitioners' right to due process, the same should be set aside. It is settled that "[v]iolation of due process rights is a jurisdictional defect" and that "a decision or judgment is fatally defective if rendered in violation of a party-litigant's right to due process."43 (Citations omitted) Here, the Commission on Audit should have taken cognizance of petitioners' appeal in the interest of substantial justice. Since the sum involved amounts to P42,594,037.69, upholding the disallowance without giving petitioners any opportunity to present their defense and adduce evidence has denied them their right to due process. The right to due process, in demanding fairness, intends liberty from arbitrariness.44 A decision made in violation of a party's right to due process is gravely defective,45 making the assailed proceeding wholly void.46 ACCORDINGLY, I vote to GRANT the Petition. Footnotes 1 Rollo, p. 7. Proceso Aguillo (mayor), Felix L. Galang, Jr. (municipal accountant), Elena A. Estelilla (municipal treasurer), Engr. Manolito P. Barundia (building official), and Pastor Canceran. Marcelina Marana and Manolita Barundia (members of the Bids and Awards Committee). 2 Id. at 46-48. 3 Id. at 72-73. 4 Ponencia, p. 2. 5 Rollo, pp. 49-50. 6 Id. at 51-52. 7 Id. at 53-54. 8 Id. at 55-56. 9 Id. at 57-59. 10 Id. at 60-63. 11 Id. at 61-62. 12 Id. at 71. 13 Id. at 36. 14 Ponencia, p. 6. 15 Id. at 8. 16 G.R. No. 217448, September 10, 2019, [Per J. Bersamin, En Banc]. 17 Ponencia, p. 8. 18 Id. 19 Gutierrez v. Commission on Audit, 750 Phil. 413, 430 (2015) [Per J. Leonen, En Banc]. 20 Id. citing Ledesma v. Court of Appeals, 565 Phil. 731-743 (2007) [Per J. Tinga, Second Division]. 21 565 Phil. 731 (2007) [Per J. Tinga, Second Division]. 22 Id. at 740. 23 Vivo v. Philippine Amusement and Gaming Corp., 721 Phil. 34, 39 (2013) [Per J. Bersamin, En Banc]. 24 Ablong v. Commission on Audit, G.R. No. 233308, August 18, 2020, (Per J. Reyes, Jr., En Banc]; Busuego v. Court of Appeals, 364 Phil. 116, 126 (1999) [Per J. Purisima, Third Division]. 25 787 Phil. 713 (2016) [Per J. Brion, En Banc). 26 Id. at 725-726. 27 385 Phil. 324 (2000) [Per J. Puno, En Banc]. 28 Id. at 337. 29 Rollo, pp. 13-14, 33. 30 Id. at 61. 31 369 Phil. 886 (1999) [Per J. Purisima, En Banc]. 32 Buscaino v. Commission on Audit, 369 Phil. 886, 902 (1999) [Per J. Purisima, En Banc]. 33 Rollo, pp. 17-18. 34 Id. at 39. 35 Id. at 36. 36 Fontanilla v. Commissioner Proper, 787 Phil. 713 (2016) [Per J. Brion, En Banc]. 37 818 Phil. 429 (2017) [Per J. Leonen, En Banc]. 38 Bangko Sentral ng Pilipinas v. Commission on Audit, 818 Phil. 429, 453 (2017) [Per J. Leonen, En Banc]. 39 Lanto v. Commission on Audit, 808 Phil. 1025, 1038 (2017) [Per J. Bersamin, En Banc]. 40 808 Phil. 1025 (2017) [Per J. Bersamin, En Banc]. 41 Id. at 1039-1040. 42 G.R. No. 233308, August 18, 2020, Per J. Reyes Jr., En Banc]. 43 Id. 44 Philippine National Construction Corp. v. NLRC, 354 Phil. 274, 282 (1988) (Per J. Romero, Third Division]. 45 Id. at 280. 46 Combate v. San Jose, Jr., 220 Phil. 365, 369 (1985) [Per J. Melencio-Herrera, First Division]. The Lawphil Project - Arellano Law Foundation