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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 88550 April 18, 1990

INDUSTRIAL ENTERPRISES, INC., petitioner,vs.THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL CORPORATION,THE HON. GERONIMO VELASCO in his capacity as Minister of Energy and PHILIPPINENATIONAL BANK,respondents.

Manuel M. Antonio and Dante Cortez for petitioner.

Pelaez, Adriano & Gregorio for respondent MMIC.

The Chief Legal Counsel for respondent PNB.

MELENCIO-HERRERA, J .:

This petition seeks the review and reversal of the Decision of respondent Court of Appeals in CA-G.R. CV No. 12660, 1which ruled adversely against petitioner herein.

Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by theGovernment through the Bureau of Energy Development (BED) for the exploration of two coal

blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy foranother coal operating contract for the exploration of three additional coal blocks which, togetherwith the original two blocks, comprised the so-called "Giporlos Area."

IEI was later on advised that in line with the objective of rationalizing the country's over-all coalsupply-demand balance . . . the logical coal operator in the area should be the MarinduqueMining and Industrial Corporation (MMIC), which was already developing the coal deposit inanother area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded toMMIC (Rollo, p. 37). Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEIassigned and transferred to MMIC all its rights and interests in the two coal blocks which are thesubject of IEI's coal operating contract.

Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement withdamages against MMIC and the then Minister of Energy Geronimo Velasco before the RegionalTrial Court of Makati, Branch 150, 2alleging that MMIC took possession of the subject coal blockseven before the Memorandum of Agreement was finalized and approved by the BED; that MMICdiscontinued work thereon; that MMIC failed to apply for a coal operating contract for theadjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed uponand to assume IEI's loan obligation as provided in the Memorandum of Agreement (Rollo, p. 38).IEI also prayed that the Energy Minister be ordered to approve the return of the coal operatingcontract from MMIC to petitioner, with a written confirmation that said contract is valid andeffective, and, in due course, to convert said contract from an exploration agreement to adevelopment/production or exploitation contract in IEI's favor.

Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in anAmended Complaint when the latter with the Development Bank of the Philippines effected extra-

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judicial foreclosures on certain mortgages, particularly the Mortgage Trust Agreement, dated 13July 1981, constituted in its favor by MMIC after the latter defaulted in its obligation totallingaround P22 million as of 15 July 1984. The Court of Appeals eventually dismissed the caseagainst the PNB (Resolution, 21 September 1989).

Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.

In a summary judgment, the Trial Court ordered the rescission of the Memorandum ofAgreement, declared the continued efficacy of the coal operating contract in favor of IEI; orderedthe reversion of the two coal blocks covered by the coal operating contract; ordered BED to issueits written affirmation of the coal operating contract and to expeditiously cause the conversionthereof from exploration to development in favor of IEI; directed BED to give due course to IEI'sapplication for a coal operating contract; directed BED to give due course to IEI's application forthree more coal blocks; and ordered the payment of damages and rehabilitation expenses (Rollo,pp. 9-10).

In reversing the Trial Court, the Court of Appeals held that the rendition of the summary judgmentwas not proper since there were genuine issues in controversy between the parties, and moreimportantly, that the Trial Court had no jurisdiction over the action considering that, underPresidential Decree No. 1206, it is the BED that has the power to decide controversies relative tothe exploration, exploitation and development of coal blocks (Rollo, pp. 43-44).

Hence, this petition, to which we resolved to give due course and to decide.

Incidentally, the records disclose that during the pendency of the appeal before the AppellateCourt, the suit against the then Minister of Energy was dismissed and that, in the meantime, IEIhad applied with the BED for the development of certain coal blocks.

The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decidethe suit for rescission of the Memorandum of Agreement concerning a coal operating contractover coal blocks. A corollary question is whether or not respondent Court of Appeals erred inholding that it is the Bureau of Energy Development (BED) which has jurisdiction over said actionand not the civil court.

While the action filed by IEI sought the rescission of what appears to be an ordinary civil contractcognizable by a civil court, the fact is that the Memorandum of Agreement sought to be rescindedis derived from a coal-operating contract and is inextricably tied up with the right to develop coal-bearing lands and the determination of whether or not the reversion of the coal operating contractover the subject coal blocks to IEI would be in line with the integrated national program for coal-development and with the objective of rationalizing the country's over-all coal-supply-demandbalance, IEI's cause of action was not merely the rescission of a contract but the reversion orreturn to it of the operation of the coal blocks. Thus it was that in its Decision ordering therescission of the Agreement, the Trial Court, inter alia,declared the continued efficacy of thecoal-operating contract in IEI's favor and directed the BED to give due course to IEI's applicationfor three (3) IEI more coal blocks. These are matters properly falling within the domain of theBED.

For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D.No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive andintegrated national program for the exploration, exploitation, and development and extraction offossil fuels, such as the country's coal resources; adopting a coal development program;regulating all activities relative thereto; and undertaking by itself or through service contractssuch exploitation and development, all in the interest of an effective and coordinateddevelopment of extracted resources.

Thus, the pertinent sections of P.D. No. 1206 provide:

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Sec. 6. Bureau of Energy Development. There is created in the Department aBureau of Energy Development, hereinafter referred to in this Section as theBureau, which shall have the following powers and functions, among others:

a. Administer a national programfor the encouragement, guidance, andwhenever necessary, regulation of such business activity relative to

the exploration, exploitation, development, and extraction of fossil fuels such aspetroleum, coal, . . .

The decisions, orders, resolutions or actions of the Bureau may be appealed tothe Secretary whose decisions are final and executory unless appealed to thePresident. (Emphasis supplied.)

That law further provides that the powers and functions of the defunct Energy DevelopmentBoard relative to the implementation of P.D. No. 972 on coal exploration and development havebeen transferred to the BED, provided that coal operating contracts including the transfer orassignment of interest in said contracts, shall require the approval of the Secretary (Minister) ofEnergy (Sec. 12, P.D. No. 1206).

Sec. 12. . . . the powers and functions transferred to the Bureau of EnergyDevelopment are:

xxx xxx xxx

ii. The following powers and functions of the Energy Development Board underPD No. 910 . . .

(1)Undertake by itself or through other arrangements, such as service contracts,the active exploration, exploitation, development, and extraction of energy

resources. . .

(2) Regulate all activities relative to the exploration, exploitation, development,and extraction of fossil and nuclear fuels . . .

(P.D. No. 1206) (Emphasis supplied.)

P.D. No. 972 also provides:

Sec. 8. Each coal operating contract herein authorized shall . . . be executed bythe Energy Development Board.

Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, topass upon any question involving the Memorandum of Agreement between IEI and MMIC,revolving as its does around a coal operating contract, should be sustained.

In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction inmany cases involving matters that demand the special competence of administrative agencies. Itmay occur that the Court has jurisdiction to take cognizance of a particular case, which meansthat the matter involved is also judicial in character. However, if the case is such that itsdetermination requires the expertise, specialized skills and knowledge of the properadministrative bodies because technical matters or intricate questions of facts are involved, thenrelief must first be obtained in an administrative proceeding before a remedy will be supplied bythe courts even though the matter is within the proper jurisdiction of a court. This is the doctrine

of primary jurisdiction. It applies "where a claim is originally cognizable in the courts,and comesinto play whenever enforcement of the claim requires the resolution of issues which, under a

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regulatory scheme, have been placed within the special competence of an administrative body,in such case the judicial process is suspended pending referral of such issues to theadministrative body for its view" (United States v. Western Pacific Railroad Co., 352 U.S. 59,Emphasis supplied).

Clearly, the doctrine of primary jurisdiction finds application in this case since the question of

what coal areas should be exploited and developed and which entity should be granted coaloperating contracts over said areas involves a technical determination by the BED as theadministrative agency in possession of the specialized expertise to act on the matter. The TrialCourt does not have the competence to decide matters concerning activities relative to theexploration, exploitation, development and extraction of mineral resources like coal. Theseissues preclude an initial judicial determination. It behooves the courts to stand aside even whenapparently they have statutory power to proceed in recognition of the primary jurisdiction of anadministrative agency.

One thrust of the multiplication of administrative agencies is that the interpretationof contracts and the determination of private rights thereunder is no longer auniquely judicial function, exercisable only by our regular courts (Antipolo Realty

Corp. vs. National Housing Authority, 153 SCRA 399, at 407).

The application of the doctrine of primary jurisdiction, however, does not call for the dismissal ofthe case below. It need only be suspended until after the matters within the competence of theBED are threshed out and determined. Thereby, the principal purpose behind the doctrine ofprimary jurisdiction is salutarily served.

Uniformity and consistency in the regulation of business entrusted to anadministrative agency are secured, and the limited function of review by thejudiciary are more rationally exercised, by preliminary resort, for ascertaining andinterpreting the circumstances underlying legal issues, to agencies that are betterequipped than courts by specialization, by insight gained through experience, and

by more flexible procedure (Far East Conference v. United States, 342 U.S. 570).

With the foregoing conclusion arrived at, the question as to the propriety of the summaryjudgment rendered by the Trial Court becomes unnecessary to resolve.

WHEREFORE, the Court Resolved to DENY the petition. No costs.

SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes

1 Penned by Justice Nicolas P. Lapena, Jr. and concurred in by JusticesEmeterio C. Cui and Justo P. Torres.

2 Judge Benigno M. Puno, Presiding.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

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G.R. No. 151908 August 12, 2003

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION(PILTEL),petitioners,vs.NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent.

x---------------------------------------------------------x

G.R. No. 152063 August 12, 2003

GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC.(ISLACOM),petitioners,vs.COURT OF APPEALS (The Former 6th Division) and the NATIONALTELECOMMUNICATIONS COMMISSION, respondents.

YNARES-SANTIAGO,J

.:

Pursuant to its rule-making and regulatory powers, the National TelecommunicationsCommission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgatingrules and regulations on the billing of telecommunications services. Among its pertinentprovisions are the following:

(1) The billing statements shall be received by the subscriber of the telephone service notlater than 30 days from the end of each billing cycle. In case the statement is receivedbeyond this period, the subscriber shall have a specified grace period within which to paythe bill and the public telecommunications entity (PTEs) shall not be allowed todisconnect the service within the grace period.

(2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt,recorded message or similar facility excluding the customer's own equipment.

(3) PTEs shall verify the identification and address of each purchaser of prepaid SIMcards. Prepaid call cards and SIM cards shall be valid for at least 2 years from the date offirst use. Holders of prepaid SIM cards shall be given 45 days from the date the prepaidSIM card is fully consumed but not beyond 2 years and 45 days from date of first use toreplenish the SIM card, otherwise the SIM card shall be rendered invalid. The validity ofan invalid SIM card, however, shall be installed upon request of the customer at noadditional charge except the presentation of a valid prepaid call card.

(4) Subscribers shall be updated of the remaining value of their cards before the start ofevery call using the cards.

(5) The unit of billing for the cellular mobile telephone service whether postpaid orprepaid shall be reduced from 1 minute per pulse to 6 seconds per pulse. The authorizedrates per minute shall thus be divided by 10.1

The Memorandum Circular provided that it shall take effect 15 days after its publication in anewspaper of general circulation and three certified true copies thereof furnished the UP LawCenter. It was published in the newspaper, The Philippine Star, on June 22, 2000.2Meanwhile,the provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards andthe unit of billing for cellular mobile telephone service took effect 90 days from the effectivity of

the Memorandum Circular.

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On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service(CMTS) operators which contained measures to minimize if not totally eliminate the incidence ofstealing of cellular phone units. The Memorandum directed CMTS operators to:

a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation andverification of the identity and addresses of prepaid SIM card customers;

b. require all your respective prepaid SIM cards dealers to comply with Section B(1) ofMC 13-6-2000;

c. deny acceptance to your respective networks prepaid and/or postpaid customers usingstolen cellphone units or cellphone units registered to somebody other than the applicantwhen properly informed of all information relative to the stolen cellphone units;

d. share all necessary information of stolen cellphone units to all other CMTS operatorsin order to prevent the use of stolen cellphone units; and

e. require all your existing prepaid SIM card customers to register and present valididentification cards.3

This was followed by another Memorandum dated October 6, 2000 addressed to all publictelecommunications entities, which reads:

This is to remind you that the validity of all prepaid cards sold on 07 October 2000 andbeyond shall be valid for at least two (2) years from date of first use pursuant to MC 13-6-2000.

In addition, all CMTS operators are reminded that all SIM packs used by subscribers ofprepaid 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 unit shall be on a six (6) seconds pulseeffective 07 October 2000.

For strict compliance.4

On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino TelephoneCorporation filed against the National Telecommunications Commission, Commissioner JosephA. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C.Dacanay, an action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (theBilling Circular) and the NTC Memorandum dated October 6, 2000, with prayer for the issuanceof a writ of preliminary injunction and temporary restraining order. The complaint was docketedas Civil Case No. Q-00-42221 at the Regional Trial Court of Quezon City, Branch 77.5

Petitioners Islacom and Piltel alleged, inter alia,that the NTC has no jurisdiction to regulate thesale of consumer goods such as the prepaid call cards since such jurisdiction belongs to theDepartment of Trade and Industry under the Consumer Act of the Philippines; that the BillingCircular is oppressive, confiscatory and violative of the constitutional prohibition againstdeprivation of property without due process of law; that the Circular will result in the impairmentof the viability of the prepaid cellular service by unduly prolonging the validity and expiration ofthe prepaid SIM and call cards; and that the requirements of identification of prepaid card buyersand call balance announcement are unreasonable. Hence, they prayed that the Billing Circularbe declared null and void ab initio.

Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint

Motion for Leave to Intervene and to Admit Complaint-in-Intervention.6

This was granted by thetrial court.

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On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC fromimplementing Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6,2000.7

In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the case on theground of petitioners' failure to exhaust administrative remedies.

Subsequently, after hearing petitioners' application for preliminary injunction as well asrespondent's motion to dismiss, the trial court issued on November 20, 2000 an Order, thedispositive portion of which reads:

WHEREFORE, premises considered, the defendants' motion to dismiss is hereby deniedfor lack of merit. The plaintiffs' application for the issuance of a writ of preliminaryinjunction is hereby granted. Accordingly, the defendants are hereby enjoined fromimplementing NTC Memorandum Circular 13-6-2000 and the NTC Memorandum, datedOctober 6, 2000, pending the issuance and finality of the decision in this case. Theplaintiffs and intervenors are, however, required to file a bond in the sum of FIVEHUNDRED THOUSAND PESOS (P500,000.00), Philippine currency.

SO ORDERED.8

Defendants filed a motion for reconsideration, which was denied in an Order dated February 1,2001.9

Respondent NTC thus filed a special civil action for certiorari and prohibition with the Court ofAppeals, which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a decision wasrendered, the decretal portion of which reads:

WHEREFORE, premises considered, the instant petition for certiorari and prohibition is

GRANTED, in that, the order of the court a quo denying the petitioner's motion to dismissas well as the order of the court a quogranting the private respondents' prayer for a writof preliminary injunction, and the writ of preliminary injunction issued thereby, are herebyANNULLED and SET ASIDE. The private respondents' complaint and complaint-in-intervention below are hereby DISMISSED, without prejudice to the referral of the privaterespondents' grievances and disputes on the assailed issuances of the NTC with the saidagency.

SO ORDERED.10

Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 forlack of merit.11

Hence, the instant petition for review filed by Smart and Piltel, which was docketed as G.R. No.151908, anchored on the following grounds:

A.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THENATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULARCOURTS HAS JURISDICTION OVER THE CASE.

B.

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THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDINGTHAT THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLEADMINISTRATIVE REMEDY.

C.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THEBILLING CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONALAND CONTRARY TO LAW AND PUBLIC POLICY.

D.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATERESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANTTHE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.12

Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning

the following errors:

1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THEDOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF ADMINISTRATIVEREMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGALNULLIFICATION (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OFA PURELY ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY INTHE EXERCISE OF ITS RULE MAKING POWERS AND INVOLVES ONLYQUESTIONS OF LAW.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THEDOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY

WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.

3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THEDOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLYWHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHENTHERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO SUFFERGRAVE AND IRREPARABLE INJURY.

4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSEPETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES AVAILABLETO THEM.

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITSQUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A CLEARRIGHT TO AN INJUNCTION.13

The two petitions were consolidated in a Resolution dated February 17, 2003. 14

On March 24, 2003, the petitions were given due course and the parties were required to submittheir respective memoranda.15

We find merit in the petitions.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or

administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make

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rules and regulations which results in delegated legislation that is within the confines of thegranting statute and the doctrine of non-delegability and separability of powers.16

The rules and regulations that administrative agencies promulgate, which are the product of adelegated legislative power to create new and additional legal provisions that have the effect oflaw, should be within the scope of the statutory authority granted by the legislature to the

administrative agency. It is required that the regulation be germane to the objects and purposesof the law, and be not in contradiction to, but in conformity with, the standards prescribed bylaw.17They must conform to and be consistent with the provisions of the enabling statute in orderfor such rule or regulation to be valid. Constitutional and statutory provisions control with respectto what rules and regulations may be promulgated by an administrative body, as well as withrespect to what fields are subject to regulation by it. It may not make rules and regulations whichare inconsistent with the provisions of the Constitution or a statute, particularly the statute it isadministering or which created it, or which are in derogation of, or defeat, the purpose of astatute. In case of conflict between a statute and an administrative order, the former mustprevail.18

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is

its quasi-judicial or administrative adjudicatory power. This is the power to hear and determinequestions of fact to which the legislative policy is to apply and to decide in accordance with thestandards laid down by the law itself in enforcing and administering the same law. Theadministrative body exercises its quasi-judicial power when it performs in a judicial manner anact which is essentially of an executive or administrative nature, where the power to act in suchmanner is incidental to or reasonably necessary for the performance of the executive oradministrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrativeofficers or bodies are required to investigate facts or ascertain the existence of facts, holdhearings, weigh evidence, and draw conclusions from them as basis for their official action andexercise of discretion in a judicial nature.19

In questioning the validity or constitutionality of a rule or regulation issued by an administrative

agency, a party need not exhaust administrative remedies before going to court. This principleapplies only where the act of the administrative agency concerned was performed pursuant to itsquasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. InAssociation of Philippine Coconut Dessicators v. Philippine CoconutAuthority,20it was held:

The rule of requiring exhaustion of administrative remedies before a party may seek judicialreview, so strenuously urged by the Solicitor General on behalf of respondent, has obviously noapplication here. The resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agenciesmade in the exercise of their quasi-judicial function is subject to the exhaustion doctrine.

Even assuming arguendo that the principle of exhaustion of administrative remedies apply in thiscase, the records reveal that petitioners sufficiently complied with this requirement. Even duringthe drafting and deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000, petitioners were able to register their protests to the proposed billing guidelines. Theysubmitted their respective position papers setting forth their objections and submitting proposedschemes for the billing circular.21After the same was issued, petitioners wrote successive lettersdated July 3, 200022and July 5, 2000,23asking for the suspension and reconsideration of the so-called Billing Circular. These letters were not acted upon until October 6, 2000, when respondentNTC issued the second assailed Memorandum implementing certain provisions of the BillingCircular. This was taken by petitioners as a clear denial of the requests contained in theirprevious letters, thus prompting them to seek judicial relief.

In like manner, the doctrine of primary jurisdiction applies only where the administrative agencyexercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes,

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the practice has been to refer the same to an administrative agency of special competencepursuant to the doctrine of primary jurisdiction. The courts will not determine a controversyinvolving a question which is within the jurisdiction of the administrative tribunal prior to theresolution of that question by the administrative tribunal, where the question demands theexercise of sound administrative discretion requiring the special knowledge, experience andservices of the administrative tribunal to determine technical and intricate matters of fact, and a

uniformity of ruling is essential to comply with the premises of the regulatory statuteadministered. The objective of the doctrine of primary jurisdiction is to guide a court indetermining whether it should refrain from exercising its jurisdiction until after an administrativeagency has determined some question or some aspect of some question arising in theproceeding before the court. It applies where the claim is originally cognizable in the courts andcomes into play whenever enforcement of the claim requires the resolution of issues which,under a regulatory scheme, has been placed within the special competence of an administrativebody; in such case, the judicial process is suspended pending referral of such issues to theadministrative body for its view.24

However, where what is assailed is the validity or constitutionality of a rule or regulation issuedby the administrative agency in the performance of its quasi-legislative function, the regular

courts have jurisdiction to pass upon the same. The determination of whether a specific rule orset of rules issued by an administrative agency contravenes the law or the constitution is withinthe jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review orthe power to declare a law, treaty, international or executive agreement, presidential decree,order, instruction, ordinance, or regulation in the courts, including the regional trial courts.25Thisis within the scope of judicial power, which includes the authority of the courts to determine in anappropriate action the validity of the acts of the political departments.26Judicial power includesthe duty of the courts of justice to settle actual controversies involving rights which are legallydemandable and enforceable, and to determine whether or not there has been a grave abuse ofdiscretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentalityof the Government.27

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and itsMemorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power.As such, petitioners were justified in invoking the judicial power of the Regional Trial Court toassail the constitutionality and validity of the said issuances. In Drilon v. Lim,28it was held:

We stress at the outset that the lower court had jurisdiction to consider theconstitutionality of Section 187, this authority being embraced in the general definition ofthe judicial power to determine what are the valid and binding laws by the criterion oftheir conformity to the fundamental law. Specifically, B.P. 129 vests in the regional trialcourts jurisdiction over all civil cases in which the subject of the litigation is incapable ofpecuniary estimation, even as the accused in a criminal action has the right to question inhis defense the constitutionality of a law he is charged with violating and of the

proceedings taken against him, particularly as they contravene the Bill of Rights.Moreover, Article X, Section 5(2), of the Constitution vests in the Supreme Courtappellate jurisdiction over final judgments and orders of lower courts in all cases in whichthe constitutionality or validity of any treaty, international or executive agreement, law,presidential decree, proclamation, order, instruction, ordinance, or regulation is inquestion.29

In their complaint before the Regional Trial Court, petitioners averred that the Circularcontravened Civil Code provisions on sales and violated the constitutional prohibition against thedeprivation of property without due process of law. These are within the competence of the trialjudge. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do notentail highly technical matters. Rather, what is required of the judge who will resolve this issue is

a basic familiarity with the workings of the cellular telephone service, including prepaid SIM andcall cards and this is judicially known to be within the knowledge of a good percentage of ourpopulationand expertise in fundamental principles of civil law and the Constitution.

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Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221.The Court of Appeals erred in setting aside the orders of the trial court and in dismissing thecase.

WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decisionof the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution

dated January 10, 2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000of the Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Q-00-42221 isREINSTATED. This case is REMANDED to the court a quo for continuation of the proceedings.

SO ORDERED.

Davide, Jr., C.J., Vitug, and Carpio, JJ., concur.Azcuna, J.,took no part.

Footnotes

1Rollo, G.R. No. 151908, pp. 225-228.

2Rollo, G.R. No. 152063, p. 112.

3Rollo, G.R. No. 151908, p. 229.

4Id., p. 230.

5Id., pp. 231-247.

6Id., pp. 248-270.

7Id., pp. 271-273, at 273; penned by Judge Vivencio S. Baclig.

8Id., pp. 274-277.

9Id., p. 278.

10Id., pp. 123-132, at 131-132; penned by Associate Justice Rodrigo V. Cosico,concurred in by Associate Justices Ramon A. Barcelona and Alicia L. Santos.

11Id., pp. 134-136.

12Id., pp. 23-24.

13Rollo, G.R. No. 152063, pp. 14-15.

14Id., pp. 389-390.

15Id., pp. 391-392.

16Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue v. Court of Appeals,329 Phil. 987, 1017 [1996].

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17Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles v. Home DevelopmentMutual Fund, G.R. No. 131082, 19 June 2000, 333 SCRA 777, 785-786.

18Conte, et al. v. Commission on Audit, 332 Phil. 20, 36 [1996].

19Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue, G.R. No. 119761,29 August 1996, supra.

20G.R. No. 110526, 10 February 1998, 286 SCRA 109, 117.

21Rollo, G.R. No. 152063, pp. 57-78.

22Id., pp. 79-86.

23Id., pp. 87-89.

24Fabia v. Court of Appeals, G.R. No. 132684, 11 September 2002.

25Spouses Mirasol v. Court of Appeals, G.R. No. 128448, 1 February 2001, 351 SCRA44, 51.

26Santiago v. Guingona, Jr., G.R. No. 134577, 18 November 1998, 298 SCRA 756, 774.

27CONSTITUTION, Art. VIII, Sec. 1, second paragraph.

28G.R. No. 112497, 4 August 1994, 235 SCRA 135.

29Id., at 139-140.