ISSUE: The issue was whether or not NPB Resolution Nos. 2002-124 and 2002-125 were properly enacted.
FACTS: On June 8, 2001, Republic Act 9136, otherwise known as the “Electric Power Industry Reform Act of 2001” (EPIRA Law), was approved and signed into law by President Gloria Macapagal-Arroyo. It took effect on 26 June 2001. Under Section 48 of the EPIRA Law, a new National Power Board (NPB) of Directors was formed. An energy restructuring committee (Restructuring Committee) was also created to manage the privatization and the restructuring of the National Power Corporation (NPC), the National Transmission Corporation (TRANSCO), and the Power Sector Assets and Liabilities Corporation (PSALC). On November 18 , 2002, pursuant to Section 63 of the EPIRA Law and Rule 33 of the Implementing Rules and Regulations (IRR), the NPB passed NPB Resolution No. 2002-124, which provided for “Guidelines on the Separation Program of the NPC and the Selection and Placement of Personnel.” Under this Resolution, the services of all NPC personnel shall be legally terminated on January 31, 2003, and shall be entitled to separation benefits provided therein. On the same day, the NPB approved NPB Resolution 2002-125, constituting a Transition Team to manage and implement the NPC’s Separation Program. Contending that the assailed NPB Resolutions were void, petitioners filed, in their individual and representative capacities, the present Petition for Injunction to restrain respondents from implementing NPB Resolution Nos. 2002-124 and 2002- 125.
RATIO DECIDENDI: The Court’s Decision, written by Justice Minita V. Chico-Nazario, held that the Resolutions were invalid, because they lacked the necessary number of votes for their adoption. Under Section 48, the power to exercise judgment and discretion in running the affairs of the NPC was vested by the legislature upon the persons composing the National Power Board of Directors. When applied to public functionaries, discretion refers to a power or right conferred upon them by law, consisting of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, and uncontrolled by the judgment or conscience of others. Presumably, in naming the respective department heads as members of the board of directors, the legislature chose these secretaries of the various executive departments on the basis of their personal qualifications and acumen that had made them eligible to occupy their present positions as department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less their power to vote and approve board resolutions. Their personal judgments are what they must exercise in the fulfillment of their responsibilities. There was no question that the enactment of the assailed Resolutions involved the exercise of discretion, not merely a ministerial act that could be validly performed by a delegate. Respondents’ reliance on American Tobacco Company v. Director of Patents was misplaced. The Court explicitly stated in that case that, in exercising their own judgment and discretion, administrative officers were not prevented from using the help of subordinates as a matter of practical administrative procedure. Officers could seek such aid, as long as the legally authorized official was the one who would make the final decision through the use of personal judgment. In the present case, it is not difficult to comprehend that in approving NPB Resolutions 2002-124 and 2002-125, it is the representatives of the secretaries of the different executive departments and not the secretaries themselves who exercised judgment in passing the assailed Resolution. This action violates the duty imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the corporate powers of the NPC.