Case Digests
Case Digests, Constitutional Law 1 Digests, Law School

Case Digest: Chamber of Real Estate and Builders’ Association, Inc. v. Energy Regulatory Commission, G.R. No. 174697, 8 July 2010

Chamber of Real Estate and Builders’ Association, Inc. v. Energy Regulatory  Commission, G.R. No. 174697, 8 July 2010

TOPIC: Conditions for the Exercise of Judicial Review:  Legal Standing


This is a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction1 to nullify Section 2.6 of the Distribution Services and Open Access Rules (DSOAR), promulgated by respondent Energy Regulatory Commission (ERC) on January 18, 2006. Petitioner Chamber of Real Estate and Builders’ Associations, Inc. asserts that Section 2.6 of the DSOAR, which obligates certain customers to advance the amount needed to cover the expenses of extending lines and installing additional facilities, is unconstitutional and contrary to Republic Act No. 9136, otherwise known as “The Electric Power Industry Reform Act of 2001 (EPIRA).”

The petitioner alleged that the entities it represented applied for electrical power service, and MERALCO required them to sign pro forma contracts that (1) obligated them to advance the cost of the construction of new lines and other facilities and (2) allowed annual refunds at 25% of the gross distribution revenue derived from the customer’s electric service, until the amount advanced is fully paid, pursuant to Section 2.6 of the DSOAR.

The petitioner seeks to nullify Section 2.6 of the DSOAR, on the following grounds: (1) it is unconstitutional since it is oppressive and it violates the due process and equal protection clauses; (2) it contravenes the provisions of the EPIRA; and (3) it violates the principle of unjust enrichment.

Petitioner claims that Section 2.6 of the DSOAR is unconstitutional as it is oppressive to the affected end-users who must advance the amount for the installation of additional facilities. Burdening residential end-users with the installation costs of additional facilities defeats the objective of the law – the electrification of residential areas – and contradicts the provisions of the legislative franchise, requiring DUs to be financially capable of providing the distribution service. Moreover, the questioned provision violates the equal protection clause since the difference in treatment between end-users residing within 30 meters of the existing lines and those beyond 30 meters does not rest on substantial distinctions.

In addition, the petitioner alleges that the assailed provision contravenes Sections 2, 23, 41 and 43 of the EPIRA9 which are geared towards ensuring the affordability of electric power and the protection of consumers. Lastly, requiring consumers to provide the huge capital for the installation of the facilities, which will be owned by distribution utilities such as MERALCO, results in unjust enrichment.


Whether petitioner has legal standing to sue.


  1. The Petitioner Has No Legal Standing

We do not see the petitioner as an entity with the required standing to assail the validity of Section 2.6 of the DSOAR.

Legal standing or locus standi refers to a party’s personal and substantial interest in a case, arising from the direct injury it has sustained or will sustain as a result of the challenged governmental action. Legal standing calls for more than just a generalized grievance. The term “interest” means a material interest, an interest in issue affected by the governmental action, as distinguished from mere interest in the question involved, or a mere incidental interest. Unless a person’s constitutional rights are adversely affected by a statute or governmental action, he has no legal standing to challenge the statute or governmental action.

The petitioner expressly enumerates its members to be the following: developers, brokers, appraisers, contractors, manufacturers, suppliers, engineers, architects, and other persons or entities engaged in the housing and real estate business.21 It does not question the challenged DSOAR provision as a residential end-user and it cannot because the challenged provision only refers to the rights and obligations of DUs and residential end-users; neither the petitioner nor its members are residential end-users. In fact, the DSOAR has separate provisions for the extension of lines or installation of additional facilities for non-residential end-users, under its Section 2.7 entitled “Modifications and New Connections: Non-Residential.” Thus, neither the petitioner nor its members can claim any injury, as residential end-users, arising from the challenged Section 2.6 of the DSOAR, nor cite any benefit accruing to them as residential end-users that would result from the invalidation of the assailed provision.

The petitioner meets the objection to its capacity to bring suit through the claim that subdivision developers are directly affected by the assailed provision because MERALCO has asked them to advance the cost of installing additional lines and facilities, in accordance with Section 2.6 of the DSOAR.22 This claim is specious.

Section 1, Rule I of the Revised Rules and Regulations Implementing the Subdivision and Condominium Buyer’s Protective Decree (PD 957) and Other Related Laws provides the minimum design standards for subdivisions. These minimum standards include an electrical power supply, described under subsection C(7) thus:

  1. Electrical Power Supply System

Mandatory individual household connection to primary and/or alternate sources of power.

x x x x

Provision of street lighting per pole is mandatory at 50-meter distance and every other pole if distance is less than 50 meters.

Thus, subdivision developers are obligated under these rules to include in their design an electrical power supply system that would link individual households within their subdivision to primary and/or alternate sources of power. This requirement is intended to protect the rights of prospective subdivision homeowners,23 and exists regardless of the validity of Section 2.6 of the DSOAR.

In other words, the invalidation of Section 2.6 of the DSOAR would not permit subdivision developers to renege from their duty to ensure power supply and to pass the costs of installing a proper electrical power supply system to MERALCO. In this light, it is immaterial that MERALCO did require certain developers to sign the Agreement for Extension of Lines And/Or Additional Facilities24 as this was required under the provisions of the Magna Carta, not under the assailed DSOAR provision that, in the first place, does not govern the relationship of subdivision developers (who are not residential end-users) and MERALCO.

  1. 1. No Transcendental Issue Involved

The petitioner cites instances when the Court, in the exercise of its discretion, waived the procedural rule on standing in cases that raised issues of transcendental importance. We do not, however, view the present case as one involving a matter of transcendental importance so that a waiver of the locus standi rule should be recognized.


The Court, through Associate Justice Florentino P. Feliciano (now retired), provided the following instructive guides as determinants in determining whether a matter is of transcendental importance: (1) the character of the funds or other assets involved in the case; (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government; and (3) the lack of any other party with a more direct and specific interest in the questions being raised.

In this case, the three determinants are glaringly absent. Public funds are not involved. The allegations of constitutional and statutory violations of the public respondent agency are unsubstantiated by facts and are mere challenges on the wisdom of the rules, a matter that will be further discussed in this Decision. In addition, parties with a more direct and specific interest in the questions being raised – the residential end-users – undoubtedly exist and are not included as parties to the petition. As the Court did in Anak Mindanao Party-List Group v. Executive Secretary, we cannot waive the rule on standing where the three determinants were not established.

  1. Rule 65 is both a Wrong and Misapplied Remedy

The petitioner’s choice of remedy – a petition for certiorari under Rule 65 of the Rules of Court – is an incorrect remedy.

Rule 65, Section 1 of the Rules of Court mandates that the remedy of certiorari is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions:

Section 1. Petition for certiorari.—When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

Judicial functions are exercised by a body or officer clothed with authority to determine what the law is and what the legal rights of the parties are with respect to the matter in controversy. Quasi-judicial function is a term that applies to the action or discretion of public administrative officers or bodies given the authority to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action using discretion of a judicial nature. Thus, in Philnabank Employees Association v. Estanislao, we did not grant a petition for certiorari against the Department Secretary who did not act in any judicial or quasi-judicial capacity but merely promulgated the questioned implementing rules under the mandate of Republic Act No. 6971, the applicable law in this cited case.

Contrary to Section 2, Rule III of the Rules of Court, the petitioner and its members are not even parties who are aggrieved by the assailed DSOAR provision, as already discussed above. Even if they had been properly aggrieved parties, the petition must still be dismissed for violation of yet another basic principle applicable to Rule 65. This rule requires, for a petition for certiorari to be an appropriate remedy, that there be no appeal or plain, speedy, and adequate remedy in the ordinary course of law. Since the petitioner assails the validity of a rule or statute and seeks our declaration that the rule is unconstitutional, a petition for declaratory relief under Section 1, Rule 63 of the Rules of Court provides a remedy more appropriate than certiorari.

Furthermore, the Court of Appeals and the Supreme Court have original concurrent jurisdiction over petitions for certiorari; the rule on hierarchy of courts determines the venue of recourses to these courts. In original petitions for certiorari, the Supreme Court will not directly entertain this special civil action – as in the present case – unless the redress desired cannot be obtained elsewhere based on exceptional and compelling circumstances justifying immediate resort to this Court.

In the present case, the petitioner alleges that the constitutionality and legality of the assailed provision are of “immense importance to the public” and are a “recipe for financial ruin of the affected parties.”3 Moreover, it maintains that its petition raises transcendental and weighty issues that would merit the Honorable Court’s exercise of original jurisdiction. To support its position, it cites the cases of the Senate of the Philippines v. Ermita and Ople v. Torres.

Senate of the Philippines v. Ermita was a case for certiorari and prohibition, while our Decision in Ople v. Torres did not clearly state whether the case was filed as a petition for certiorari. But granting that both cases were filed as petitions for certiorari, they prompted the Court to suspend its rules of procedure as they involved clear violations of the Constitution which urgently needed to be addressed. Moreover, they were unquestionably filed by the proper parties.



We don’t spam! Read our privacy policy for more info.

You may also like...