Case Title:

IN RE: Petition for Assistance in the Liquidation of the Rural Bank of Bokod (Benguet),
Inc., Philippine Deposit Insurance Corporation v. BIR
G.R. No. 158261, 511 SCRA 123

Date:
December 18, 2006

Doctrine:
Section 52(C) of the Tax Code of 1997 and the BIR-SEC Regulations No. 1 regulate the
relations only as between the SEC and the BIR, making a certificate of tax clearance a
prior requirement before the SEC could approve the dissolution of a corporation. In
Spec. Proc. No. 91-SP-0060 pending before the RTC, RBBI was placed under
receivership and ordered liquidated by the BSP, not the SEC; and the SEC is not even
a party in the said case, although the BIR is. This Court cannot find any basis to extend
the SEC requirements for dissolution of a corporation to the liquidation proceedings of
RBBI before the RTC when the SEC is not even involved therein.

Facts:
Rural Bank of Bokod (Benguet), Inc. (RBBI) conducted a special examination of RBBI
was conducted by the Supervision and Examination Sector (SES) Department III of
what is now the Bangko Sentral ng Pilipinas (BSP), wherein various loan irregularities
were uncovered. In a letter, dated 20 May 1986, the SES Department III required the
RBBI management to infuse fresh capital into the bank, within 30 days from date of the
advice, and to correct all the exceptions noted. However, up to the termination of the
subsequent general examination conducted by the SES Department III, no concrete
action was taken by the RBBI management. A memorandum and report, dated 28
August 1990, were submitted by the Director of the SES Department III concluding that
the RBBI remained in insolvent financial condition and it can no longer safely resume
business with the depositors, creditors, and the general public. BSP liquidator of RBBI
caused the filing with the RTC of a Petition for Assistance in the Liquidation of RBBI, the
Monetary Board transferred to herein petitioner Philippine Deposit Insurance
Corporation (PDIC) the receivership/liquidation of RBBI.The respondent Bureau of
Internal Revenue (BIR), through Atty. Justo Reginaldo, manifested that PDIC should
secure a tax clearance certificate from the appropriate BIR Regional Office, pursuant to
Section 52(C) of Republic Act No. 842. PDIC argues that the closure of banks under
Section 30 of the New Central Bank Act is summary in nature and procurement of tax
clearance as required under Section 52(C) of the Tax Code of 1997 is not a condition
precedent.
Issue:
Whether or not submission of tax clearance is a requirement for a bank to be close and
placed under receivership.

Ruling/Ratio:
No. Section 52(C) of the Tax Code of 1997 and the BIR-SEC Regulations No. 1
regulate the relations only as between the SEC and the BIR, making a certificate of tax
clearance a prior requirement before the SEC could approve the dissolution of a
corporation. In Spec. Proc. No. 91-SP-0060 pending before the RTC, RBBI was placed
under receivership and ordered liquidated by the BSP, not the SEC; and the SEC is not
even a party in the said case, although the BIR is. This Court cannot find any basis to
extend the SEC requirements for dissolution of a corporation to the liquidation
proceedings of RBBI before the RTC when the SEC is not even involved therein. The
receiver shall immediately gather and take charge of all the assets and liabilities of the
institution, administer the same for the benefit of its creditors, and exercise the general
powers of a receiver under the Revised Rules of Court but shall not, with the exception
of administrative expenditures, pay or commit any act that will involve the transfer or
disposition of any asset of the institution: Provided, That the receiver may deposit or
place the funds of the institution in nonspeculative investments. The receiver shall
determine as soon as possible, but not later than ninety (90) days from takeover,
whether the institution may be rehabilitated or otherwise placed in such a condition that
it may be permitted to resume business with safety to its depositors and creditors and
the general public: Provided, That any determination for the resumption of business of
the institution shall be subject to prior approval of the Monetary Board.