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SMART and PILTEL vs NTC

GR 151908; August 12, 2003 ISSUE:


1. WON Respondent court erred in holding respondents
failed to exhaust administrative remedy.
Nature: 2. WON NTC has Jurisdiction over the case.
Consolidated Petition for Review of the assailed Decision of the 3. WON the Billing Circular issued by NTC is
CA unconstitutional.
FACTS: HELD:
1. Pursuant to its rule-making and regulatory powers, the 1. Administrative agencies possess quasi-legislative or
National Telecommunications Commission (NTC) issued a rule-making powers and quasi-judicial or administrative
Memorandum Circular No. 13-6-2000 (Billing circular), adjudicatory powers. Quasi-legislative or rule-making power is
promulgating rules and regulations on the billing of the power to make rules and regulations which results in
telecommunications services. delegated legislation that is within the confines of the granting
statute and the doctrine of non-delegability and separability of
2. The NTC issued a Memorandum to all cellular mobile powers.
telephone service (CMTS) operators which contained measures
to minimize if not totally eliminate the incidence of stealing of The rules and regulations should be within the scope of the statutory
cellular phone units. authority granted by the legislature to the administrative agency. It is
required that the regulation be germane to the objects and purposes of
3. This was followed by another Memorandum dated the law, and be not in contradiction to, but in conformity with, the
standards prescribed by law.
October 6, 2000 regulating the sale of prepaid cards . They must conform to and be consistent with the provisions of the
enabling statute in order for such rule or regulation to be valid. The
“This is to remind you that the validity of all prepaid cards sold on 07 administrative body exercises its quasi-judicial power when it performs in
October 2000 and beyond shall be valid for at least two (2) years from a judicial manner an act which is essentially of an executive or
date of first use pursuant to MC 13-6-2000. administrative nature, where the power to act in such manner is incidental
to or reasonably necessary for the performance of the executive or
In addition, all CMTS operators are reminded that all SIM packs used by administrative duty entrusted to it.
subscribers of prepaid cards sold on 07 October 2000 and beyond shall
be valid for at least two (2) years from date of first use. Also, the billing In questioning the validity or constitutionality of a rule or
unit shall be on a six (6) seconds pulse effective 07 October 2000. regulation issued by an administrative agency, a party need not
For strict compliance.” exhaust administrative remedies before going to court. This
principle applies only where the act of the administrative agency
4. Petitioners ISLACOM and Piltel filed an action with concerned was performed pursuant to its quasi-judicial function,
RTC for declaration of nullity of the Billing Circular and the NTC and not when the assailed act pertained to its rule-making or
Memorandum dated Oct. 6, 2000 with prayer for the issuance of quasi-legislative power.
writ of preliminary injunction and TRO. They questioned the
VALIDITY of such Memos. 2. In like manner, the doctrine of primary jurisdiction
Contention: applies only where the administrative agency exercises its quasi-
a. NTC has no jurisdiction to regulate the sale of consumer judicial or adjudicatory function. The objective of the doctrine of
goods such as the prepaid call cards since such primary jurisdiction is to guide a court in determining whether it should
refrain from exercising its jurisdiction until after an administrative agency
jurisdiction belongs to the Department of Trade and
has determined some question or some aspect of some question arising
Industry under the Consumer Act of the Philippines. in the proceeding before the court.
b. Billing circular is oppressive, confiscatory, and violative However, where what is assailed is the validity or constitutionality
of the constitutional prohibition against deprivation of of a rule or regulation issued by the administrative agency in the
property without due process of law; performance of its quasi-legislative function, the regular courts
c. Circular will result in the impairment of the viability and have jurisdiction to pass upon the same. The determination of
expiration of the prepaid SIM and call cards whether a specific rule or set of rules issued by an administrative
d. That the requirements of Identification of prepaid card agency contravenes the law or the constitution is within the
buyers and call balance announcement are jurisdiction of the regular courts.
unreasonable.
3. In the case at bar, the issuance by the NTC of
5. SMART and Globe telecom filed a Joint Motion for leave Memorandum Circular No. 13-6-2000 and its Memorandum
to intervene and to admit complaint-interventions. This was dated October 6, 2000 was pursuant to its quasi-legislative or
granted by trial court rule-making power. As such, petitioners were justified in invoking
the judicial power of the Regional Trial Court to assail the
6. The TRO was released and NTC filed motion to dismiss constitutionality and validity of the said issuances. Hence, the
the case on the ground that petitioner failed to exhaust admin Regional Trial Court has jurisdiction to hear and decide the case.
remedies
The Court of Appeals erred in setting aside the orders of the trial court
7. RTC rendered the decision enjoining the implementation and in dismissing the case
of the Memo circular and Memorandum. Motion for
Reconsideration Denied

8. NTC filed a special civil action for certiorari and


pihibition with CA. this was granted and the preliminary injunction
was annulled and set aside, likewise the complaint was
dismissed without reffereal of the grievances and disputes on the
assailed decision of the NTC with said agency.

9. SMART and Piltel, and Globe and islacom filed a


petition for review and these were consolidated.

Contention:
a. CA erred in holding that NTC has the jurisdiction over
the case and not the regular courts, applying the Doctrine of
Primary jurisdiction and Exhaustion of Admin remedies which in
this case does not apply because the instant case is for legal
nullification of a purely admin regulation promulgated by the
agency pursuant to its rule making power
b. CA erred in applying Doc of exhaustion of admin
remedy because the questions raised are purely legal
c. CA erred in declaring the respondents failed to exhaust
admin remedies available