In Jose Rizal L. Remo, et al. v. Administrator Edita S. Bueno, et al., the Supreme Court upheld the authority of the National Electrification Administration (NEA) to implement its decisions immediately, even while motions for reconsideration are pending. This ruling reinforces the NEA’s supervisory and regulatory powers over electric cooperatives, ensuring that administrative actions can be promptly enforced. The Court emphasized that the power to execute decisions immediately is crucial for effective oversight and does not preclude judicial review, thus maintaining a balance between administrative efficiency and the right to seek redress.

Power Play: Can NEA’s Decisions Jump the Gun on Reconsideration?

The consolidated cases, G.R. No. 175736 and G.R. No. 175898, revolved around the administrative complaint filed by member-consumers of Batangas II Electric Cooperative, Inc. (BATELEC II) against its Board of Directors for gross mismanagement and corruption. The NEA Board of Administrators found substantial evidence to hold the directors administratively liable and ordered their removal. Public respondent Edita S. Bueno, as the Administrator of NEA, ordered the reorganization of BATELEC II, leading to the election of a new set of officers. This action was challenged by the removed directors, who argued that the NEA’s decision could not be executed while their motion for reconsideration was pending. The Court of Appeals, however, upheld the NEA’s decision, prompting the directors to elevate the case to the Supreme Court.

At the heart of the controversy was the interpretation of Section 15 of the New Administrative Rules of Procedures of the NEA, which states that NEA decisions are immediately executory. Petitioners contended that this rule contravened Presidential Decree No. 269, the law creating the NEA, by effectively disallowing judicial review. They argued that the pendency of a motion for reconsideration should stay the execution of the NEA’s decision. The NEA countered that its rules of procedure were consistent with its mandate to supervise and control electric cooperatives, and that immediate execution was necessary for effective governance. The NEA also pointed out that the petitioners had engaged in forum shopping by filing multiple petitions with the Court of Appeals, seeking to prevent their removal from the board.

The Supreme Court sided with the NEA, holding that Section 15 of the NEA Rules of Procedures did not conflict with Presidential Decree No. 269. The Court emphasized that the NEA, as a quasi-judicial agency, had the authority to adopt its own rules of procedure, and that immediate execution of its decisions was necessary to carry out its mandate.

SECTION 24. Board of Directors. — (a) The business of a cooperative shall be managed by a board of not less than five directors, each of whom shall be a member of the cooperative or of another which is a member thereof. The by-laws shall prescribe the number of directors, their qualifications other than those prescribed in this Decree, the manner of holding meetings of the board and of electing successors to directors who shall resign, die or otherwise be incapable of acting. The by-laws may also provide for the removal of directors from office and for the election of their successors. Directors shall not receive any salaries for their services as such and, except in emergencies, shall not receive any salaries for their services to the cooperative in any other capacity without the approval of the members. The by-laws may, however, prescribe a fixed fee for attendance at each meeting of the board and may provide for reimbursement of actual expenses of such attendance and of any other actual expenses incurred in the due performance of a director’s duties.

The Court clarified that immediate execution did not preclude judicial review, as the aggrieved party could still seek recourse through a petition for review with the appropriate court. The Court also rejected the petitioners’ argument that the filing of a motion for reconsideration automatically stayed the execution of the decision. This position, the Court noted, would undermine the NEA’s ability to effectively supervise and control electric cooperatives. The Court explained that the power of supervision and control includes the authority to act directly, direct the performance of duty, restrain the commission of acts, review, approve, reverse or modify acts and decisions of subordinate officials or units, determine priorities in the execution of plans and programs, and prescribe standards, guidelines, plans and programs.

Building on this principle, the Court distinguished between the NEA’s quasi-judicial functions and its administrative responsibilities. The October 9, 2006 Order of respondent Bueno implementing the October 5, 2006 Decision of the NEA Board of Administrators was found by the Court of Appeals to be a valid exercise of both the NEA’s Administrator, in charge of the supervision and control aspect, and the Board, in charge of the quasi-judicial function. There was no grave abuse of discretion on respondent Bueno’s part. Neither do we find error in the Court of Appeals’ appreciation of the facts and the applicable rules and laws.

Furthermore, the Court addressed the issue of quorum, holding that with the removal of the petitioners from the board, the remaining directors constituted a quorum. Section 24(d) of Presidential Decree No. 269 states that “[a] majority of the board of directors in office shall constitute a quorum.” As such, the reorganization and election of new officers by the remaining directors was valid.

In addition to the legal issues, the Court also considered the practical implications of the case. The NEA argued that the continued presence of the petitioners on the board posed a threat to BATELEC II’s welfare, as member-consumers and employees had lost confidence in them. The NEA also presented evidence of the petitioners’ alleged mismanagement and corruption, which had led to financial losses for the cooperative. These considerations further supported the Court’s decision to uphold the NEA’s actions.

The Supreme Court also dismissed the petition for indirect contempt, finding that the petitioners had failed to prove their allegations that the respondents had willfully disobeyed the Court’s Status Quo Ante Order. The Court noted that the respondents had acted in good faith and had taken measures to avoid any untoward incidents. More specifically, it was held that NEA Bulletin No. 35 limits and delineates the Board members’ authority to avoid conflicts with REC management and staff. Thus, as Board members of BATELEC II, petitioners can only exercise authority when the Board is in session and when any of them has a special assigned duty.

This ruling has significant implications for the governance and regulation of electric cooperatives in the Philippines. It reinforces the NEA’s authority to take decisive action to address mismanagement and corruption, ensuring the efficient and reliable delivery of electricity to consumers. It also clarifies the relationship between the NEA’s quasi-judicial functions and its administrative responsibilities, providing a framework for future actions and decisions.

FAQs

In conclusion, the Supreme Court’s decision in Jose Rizal L. Remo, et al. v. Administrator Edita S. Bueno, et al. reaffirms the NEA’s crucial role in overseeing and regulating electric cooperatives. By upholding the validity of immediately executory decisions, the Court has empowered the NEA to act decisively in addressing issues of mismanagement and corruption. This ruling provides a clear legal framework for future actions and decisions, ensuring the efficient and reliable delivery of electricity to consumers across the Philippines.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: JOSE RIZAL L. REMO v. BUENO, G.R. Nos. 175736 & 175898, April 12, 2016