Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82805:56644&catid=1580&Itemid=566
Timestamp: 2019-04-23 10:47:47+00:00

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G.R. No. 196112, February 26, 2014 - GMA NETWORK, INC., Petitioner, v. NATIONAL TELECOMMUNICATIONS COMMISSION, Respondent.
GMA NETWORK, INC., Petitioner, v. NATIONAL TELECOMMUNICATIONS COMMISSION, Respondent.
Assailed in this petition for review on certiorari1 are the Decision2 dated October 12, 2010 and a Resolution3 dated March 9, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 112437 which affirmed the Orders dated May 25, 20094 and January 8, 20105 of respondent National Telecommunications Commission in BMC Case No. 93-538, imposing a fine against petitioner GMA Network, Inc. for operating a radio station with an expired provisional authority.
GMA, by virtue of its legislative franchise, filed with the NTC an application for the issuance of a Certificate of Public Convenience (CPC) to install, operate and maintain a 5-kilowatt amplitude modulation (AM) radio station in Puerto Princesa City, Palawan, docketed as BMC Case No. 93-538. Pending approval, the NTC issued an Order10 dated January 14, 1997, provisionally authorizing GMA to install, operate and maintain said radio station. The provisional authority (PA) was valid for 18 months from date, or until July 14, 1998, and expressly stated that it may be “subject to amendment, alteration, suspension, revocation or cancellation when public welfare, morals and national security so requires or when grantee operates beyond its authorization granted.” As manifested in its Compliance11 dated January 27, 1997, GMA accepted the terms and conditions stated in the PA.
In an Order17 dated February 26, 2009, the NTC set the Ex-Parte Motion for clarificatory hearing and also directed GMA to submit a written explanation (within 10 days from receipt) why it should not be administratively sanctioned for the motion’s late filing and for operating its radio station with an expired PA.
In an Order21 dated May 25, 2009, the NTC renewed GMA’s PA for three (3) years, or until July 14, 2012, but, pursuant to Section 21 of the Public Service Act, imposed upon it a fine of P152,100.00 for operating its radio station with an expired PA from July 14, 1998 to September 13, 2002, or for 1521 days (the fine having been pegged at the rate of P100 per day).
In a Decision25 dated October 12, 2010, the CA dismissed the appeal, finding no merit in GMA’s contention that the violation committed had already prescribed pursuant to Section 28 of the Public Service Act. Citing the 1962 case of Sambrano v. PSC and Phil. Rabbit Bus Lines, Inc.26 (Sambrano), it held that the abovementioned 60-day prescriptive period is only available as a defense in criminal proceedings, and not to those which are administrative in character.27 Hence, since the assailed fine was imposed by the NTC to administratively sanction GMA for its non-compliance with the conditions of its PA pursuant to Section 21 of the Public Service Act,28 the 60-day prescriptive period cannot be raised by GMA as a defense. Further, the CA found that the NTC’s imposition of the assailed fine at the reduced rate of P50.00 per day was well within the limit of Section 21 of the Public Service Act, noting too that the fine was, at best, minimal and conservative in light of the duration of GMA violation.29 It appears though that the CA did not address GMA’s argument anent the fact that its continued operation was based on temporary permits issued by the NTC.
Feeling aggrieved, GMA moved for reconsideration which was, however, denied in a Resolution30 dated March 9, 2011, hence, this petition.
The essential issue in this case is whether or not the CA erred in upholding the P76,050.00 fine imposed by the NTC upon GMA.
Section 21. Every public service violating or failing to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission shall be subject to a fine of not exceeding two hundred pesos per day for every day during which such default or violation continues; and the Commission is hereby authorized or empowered to impose such fine, after due notice and hearing.
Section 21 requires notice and hearing because fine is a sanction, regulatory and even punitive in character. Indeed, the requirement is the essence of due process. Notice and hearing are the bulwark of administrative due process, the right to which is among the primary rights that must be respected even in administrative proceedings. The right is guaranteed by the Constitution itself and does not need legislative enactment. The statutory affirmation of the requirement serves merely to enhance the fundamental precept. The right to notice and hearing is essential to due process and its non-observance will, as a rule, invalidate the administrative proceedings.
In citing Section 21 as the basis of the fine, NTC effectively concedes the necessity of prior notice and hearing. Yet the agency contends that the sanction was justified by arguing that when it took cognizance of Smart’s complaint for interconnection, “it may very well look into the issue of whether the parties had the requisite authority to operate such services.” As a result, both parties were sufficiently notified that this was a matter that NTC could look into in the course of the proceedings. The parties subsequently attended at least five hearings presided by NTC.
This Court has already held, in Collector of Internal Revenue et al. vs. Buan, G. R. L-11438; and Sambrano v. Public Service Commission, G.R. L-11439 and L-11542, decided on July 31, 1958, that the 60-day prescriptive period fixed by section 28 of the Public Service Law is available as a defense only in criminal or penal proceedings filed under Chapter IV of the Act. Consequently, the Public Service Commission is not barred from receiving evidence of the prescribed violations for the purpose of determining whether an operator has or has not faithfully kept the conditions of his certificate of permit, whether he failed or not to render the services he is required to furnish to the customers, and whether or not the infractions are sufficient cause to cancel or modify the certificate. Proceedings of this kind are held primarily to ensure adequate and efficient service as well as to protect the public against the operator’s malfeasances or abuses; they are not penal in character. True, the cancellation of the certificate may mean for an operator actual financial hardship; yet the latter is merely incidental to the protection of the traveling public. Hence, in refusing to admit evidence of prescribed violations as part of the complainant’s case against the Philippine Rabbit Lines for a modification or cancellation of the latter’s permit, we hold that the Commission committed error.
In view of the foregoing, the Court thus finds GMA’s reliance on the 60-day prescriptive period under Section 28 of the Public Service Act to be misplaced considering that the fine it assails was imposed in an administrative and not a criminal proceeding. Akin to the action taken by the Public Service Commission in the Sambrano case, the fine imposed by the NTC was made in line with its authority to enforce the rules and regulations concerning the conduct and operation of GMA as a public service utility, which was particularly meted out to ensure its compliance with the terms and conditions of its PA. There being no cogent reason to depart from established jurisprudence on the matter, the Court therefore holds that the NTC’s action in this case had not been barred under the parameters of Section 28 of the Public Service Act.
Section 23. Any public service corporation that shall perform, commit or do any act or thing forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or both, in the discretion of the court.
The applicable provision is Section 21 of the Public Service Act as it specifically governs the NTC’s imposition of a fine not exceeding P200.00 per day for every day during which the public service utility’s violation or non-compliance with the terms and conditions of the certificate/s issued by the NTC continues. On the other hand, Section 23 of the Public Service Act deals with a public service corporation’s performance, commission or doing of any forbidden or prohibited act under the same law, as well as its neglect, failure or omission to do or perform an act or thing required thereunder. As earlier mentioned, the proceedings under Section 23 pertain to criminal proceedings conducted in court, whereby the fine imposed, if so determined, is made in the court’s discretion, whereas Section 21 pertains to administrative proceedings conducted by the NTC on the grounds stated thereunder. As the present case evidently involves the latter violation, Section 21 and not Section 23 of the Public Service Act applies. Thus, finding that the fine imposed by the NTC at the reduced rate of P50.00 per day is consistent with the P200.00 per day limitation under Section 21 of the Public Service Act, the fine of P76,500.00 for GMA’s failure to comply with the terms and conditions of its PA for a period of 1,521 days was proper. The conscionability of the amount imposed should not be at issue as it is the law itself which had provided the allowable threshold for the amount therefor.
is hereby granted a Temporary Permit to operate a BROADCASTING STATION located at Brgy. San Pedro, Puerto Princesa, Palawan.
The Court finds no merit in this contention.
[A] P.A. refers to an authority given to an entity qualified to operate a public utility for a limited period during the pendency of its application for, or before the issuance of its Certificate of Public Convenience (CPC). It has a general scope because it is akin to a provisional CPC in that it gives a public utility provider power to operate as such and be bound by the laws and rules governing public utilities, pending the issuance of its actual CPC.
As may be gleaned from the NTC’s statement, the operational validity of a temporary permit flows only from “a previously updated PA.” This means that there should be an effective PA before a temporary permit is issued. The latter is a specific issuance which proceeds from a pre-requisite PA. While GMA may have been able to secure the successive issuance of temporary permits from the NTC to cover even the PA’s expired period, this does not detract from the apparent irregularity of the procedure. The fact remains that GMA operated its radio station between the time that its PA expired on July 14, 1998 and the application for its renewal was filed on April 13, 2002. Without an updated PA therefor, GMA should not have been issued temporary permits.
Technically speaking, [GMA] should not have been issued a Temporary Permit. The Temporary Permits relied upon by [GMA] were issued to it on the assumption that its P.A. was up to date. Had [NTC] known that [GMA] had an expired P.A., it would not have granted [GMA] a Temporary Permit to operate its subject radio broadcasting station. Before [GMA] could legally operate its subject radio station, it should have both an updated P.A. and a Temporary Permit for such purpose.
Verily, the Court agrees with the NTC’s submission that although GMA was granted numerous temporary permits, it does not remove the fact that it was operating on an expired PA, which infraction is subject to the penalty of fine under Section 21 of the Public Service Act.43 The Court, however, expresses that the NTC should be more circumspect with the enforcement of its internal procedures if only to prevent any future incident similar to the present case. The ideal of public accountability befittingly demands that administrative agencies, such as the NTC, devise appropriate governance systems to ensure that its rules and regulations are followed and complied, and deviations therefrom deterred and quelled. Truth be told, it is through an honest and effective bureaucracy that the government gains the people’s trust and deference.
All told, the fine against GMA in the amount of P76,500.00 for its failure to comply with the terms and conditions of its PA stands, without prejudice to any separate administrative proceeding which may be initiated against any public officer responsible for the aforementioned irregularity.
Carpio,*Acting C.J., (Chairperson), Del Castillo, Perez, and Leonen,**JJ., concur.
* Designated Acting Chief Justice per Special Order No. 1644 dated February 25, 2014.
** Designated Acting Member per Special Order No. 1643 dated February 25, 2014.
2 Id. at 52-65. Penned by Associate Justice Hakim S. Abdulwahid, with Associate Justices Ricardo R. Rosario and Samuel H. Gaerlan, concurring.
4 Id. at 96-100. Signed by Commissioner Ruel V. Canobas and Deputy Commissioners Jaime M. Fortes, Jr. and Douglas Michael N. Mallillin.
5 Id. at 110-115. Signed by Commissioner Gamaliel A. Cordoba and Deputy Commissioners Jaime M. Fortes, Jr. and Douglas Michael N. Mallillin.
9 Section 15 of EO 546 dated July 23, 1979.
10Rollo, pp. 69-78. Signed by Commissioner Simeon L. Kintanar.
21 Id. at 96- 100.
26 116 Phil. 552 (1962).
33 479 Phil. 1 (2004).
35Sambrano v. PSC and Phil. Rabbit Bus Lines, Inc., supra note 26, at 554-555.
Section 23. Any public service corporation that shall perform, commit, or do any act or thing forbidden or prohibited or shall neglect, fail or omit to do or perform any act or thing herein to be done or performed, shall be punished by a fine not exceeding twenty-five thousand pesos, or by imprisonment not exceeding five years, or both, in the discretion of the court.
Section 24. Any person who shall knowingly and willfully perform, commit, or do, or participate in performing, committing, or doing, or who shall knowingly and willfully cause, participate, or join with others in causing any public service corporation or company to do, perform or commit, or who shall advice, solicit, persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to perform, commit, or do any act or thing forbidden or prohibited by this Act, shall be punished by a fine not exceeding two thousand pesos, or imprisonment not exceeding two years, or both, in the discretion of the court: Provided, however, that for operating a private passenger automobile as a public service without having a certificate of public convenience for the same the offender shall be subject to the penalties provided for in section sixty-seven (j) of Act numbered thirty-nine hundred an ninety-two.
Section 25. Any person who shall knowingly and willfully neglect, fail, or omit to do or perform, or who shall knowingly and willfully cause or join or participate with others in causing any public service corporation or company to neglect, fail or omit to do or perform, or who shall advise, solicit, or persuade, or knowingly and willfully instruct, direct, or order any officer, agent, or employee of any public service corporation or company to neglect, fail, or omit to do any act or thing required to be done by this Act, shall be published by a fine not exceeding two thousand pesos or by imprisonment not exceeding two years, or both, in the discretion of the court.
Section 26. Any person who shall destroy, injure, or interfere with any apparatus or appliance owned or operated by to in charge of the Commission or its agents, shall be deemed guilty of a misdemeanor and upon conviction shall be published by a fine not exceeding one thousand pesos or imprisonment not exceeding six months, or both in the discretion of the court.
37 See rollo, pp. 269-271.
38 See Comment; id. at 333.
39 See Section 15 of EO 546 dated July 23, 1979.
40 G.R. No. 135992, January 31, 2006, 481 SCRA 163, 166-167.
41Republic of the Phils. v. CA, 361 Phil. 319, 329 (1999).
42 See Comment; rollo, p. 334.

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