ILLICIANC v CCMMISSICN CN AUDI1

IAC1S

eLlLloner 8anulfo lellclano ls Lhe Ceneral Manager of Lhe LeyLe MeLropollLan WaLer ulsLrlcL (LMWu for
brevlLy) A Speclal AudlL 1eam from CCA 8eglonal Cfflce no vlll audlLed Lhe accounLs of
LMWu SubsequenLly LMWu recelved a leLLer from CCA daLed 19 !uly 1999 requesLlng paymenL of
audlLlng fees As Ceneral Manager of LMWu peLlLloner senL a reply daLed 12 CcLober 1999 lnformlng
CCA's 8eglonal ulrecLor LhaL Lhe waLer dlsLrlcL could noL pay Lhe audlLlng fees eLlLloner clLed as basls
for hls acLlon SecLlons 6 and 20 of resldenLlal uecree 198 as well as SecLlon 18 of 8epubllc AcL no
6738 1he 8eglonal ulrecLor referred peLlLloner's reply Lo Lhe CCA Chalrman on 18 CcLober 1999
Cn 19 CcLober 1999 peLlLloner wroLe CCA Lhrough Lhe 8eglonal ulrecLor asklng for refund of all
audlLlng fees LMWu prevlously pald Lo CCA
Cn 16 March 2000 peLlLloner recelved CCA Chalrman Celso u Cangan's 8esoluLlon daLed 3 !anuary
2000 denylng hls requesLs eLlLloner flled a moLlon for reconslderaLlon on 31 March 2000 whlch CCA
denled on 30 !anuary 2001
Cn 13 March 2001 peLlLloner flled a eLlLlon for CerLlorarl under 8ule 64 Lo annul Lhe Commlsslon on
AudlL's (CCA") 8esoluLlon daLed 3 !anuary 2000 and Lhe ueclslon daLed 30 !anuary 2001 denylng Lhe
MoLlon for 8econslderaLlon ALLached Lo Lhe peLlLlon were resoluLlons of Lhe vlsayas AssoclaLlon of
WaLer ulsLrlcLs (vAWu) and Lhe hlllpplne AssoclaLlon of WaLer ulsLrlcLs (AWu) supporLlng Lhe
peLlLlon
eLlLloner Lheorlzes LhaL whaL u 198 creaLed was Lhe Local WaLers uLlllLles AdmlnlsLraLlon (LWuA")
and noL Lhe LWus eLlLloner clalms LhaL LWus are creaLed pursuanL Lo" and noL creaLed dlrecLly by u
198 1hus peLlLloner concludes LhaL u 198 ls noL an orlglnal charLer" LhaL would place LWus wlLhln
Lhe audlL [urlsdlcLlon of CCA as deflned ln SecLlon 2(1) ArLlcle lxu of Lhe ConsLlLuLlon eLlLloner
elaboraLes LhaL u 198 does noL creaLe LWus slnce lL does noL expressly dlrecL Lhe creaLlon of such
enLlLles buL only provldes for Lhelr formaLlon on an opLlonal or volunLary basls eLlLloner adds LhaL Lhe
operaLlve acL LhaL creaLes an LWu ls Lhe approval of Lhe Sanggunlan 8esoluLlon as speclfled ln u 198

ISSUL
WCn a Local WaLer ulsLrlcL (LWu) LMWu Lo be speclflc ls a CCCC sub[ecL Lo Lhe audlL [urlsdlcLlon of
Lhe CCA

kULING
1he Supreme CourL ulSMlSSLu Lhe eLlLlon for CerLlorarl
1he lssue has long been seLLled ln uavao ClLy WaLer ulsLrlcL v Clvll Servlce Commlsslon CverLurnlng Lhe
docLrlne seL ln Lhe sald case ls noL posslble as Lhere are no new accepLable argumenLs Lo do so
A prlvaLe corporaLlon ls one creaLed by vlrLue of a general law lL cannoL be creaLed by Lhe LeglslaLure
Lhrough a speclal charLer WhaL Lhe LeglslaLure can creaLe Lhrough a speclal charLer ls a publlc
corporaLlon ln shorL Congress cannoL enacL a law creaLlng a prlvaLe corporaLlon wlLh a speclal
charLer Such leglslaLlon would be unconsLlLuLlonal rlvaLe corporaLlons may exlsL only under a general
law lf Lhe corporaLlon ls prlvaLe lL musL necessarlly exlsL under a general law SLaLed dlfferenLly only
corporaLlons creaLed under a general law can quallfy as prlvaLe corporaLlons under exlsLlng laws LhaL
general law ls Lhe CorporaLlon Code excepL LhaL Lhe CooperaLlve Code governs Lhe lncorporaLlon of
cooperaLlves 1o clalm LhaL LWus are prlvaLe corporaLlons wlLh a speclal charLer ls Lo admlL LhaL Lhelr
exlsLence ls consLlLuLlonally lnflrm
Cbvlously LWus are noL prlvaLe corporaLlons because Lhey are noL creaLed under Lhe CorporaLlon
Code LWus are noL reglsLered wlLh Lhe SecurlLles and Lxchange Commlsslon SecLlon 14 of Lhe
CorporaLlon Code sLaLes LhaL All corporaLlons organlzed under Lhls code shall flle wlLh Lhe SecurlLles
and Lxchange Commlsslon arLlcles of lncorporaLlon x x x" LWus have no arLlcles of lncorporaLlon no
lncorporaLors and no sLockholders or members 1here are no sLockholders or members Lo elecL Lhe
board dlrecLors of LWus as ln Lhe case of all corporaLlons reglsLered wlLh Lhe SecurlLles and Lxchange
Commlsslon 1he local mayor or Lhe provlnclal governor appolnLs Lhe dlrecLors of LWus for a flxed Lerm
of offlce
eLlLloner furLher conLends LhaL a law musL creaLe dlrecLly and expllclLly a CCCC ln order LhaL lL may
have an orlglnal charLer ln shorL peLlLloner argues LhaL one speclal law cannoL serve as enabllng law
for several CCCCs buL only for one CCCC SecLlon 16 ArLlcle xll of Lhe ConsLlLuLlon mandaLes LhaL
Congress f not excepL by general law" provlde for Lhe creaLlon of prlvaLe corporaLlons 1hus Lhe
ConsLlLuLlon prot one speclal law Lo creaLe one prlvaLe corporaLlon requlrlng lnsLead a general
law" Lo creaLe prlvaLe corporaLlons ln conLrasL Lhe same SecLlon 16 sLaLes LhaL CovernmenLowned or
conLrolled corporaLlons f be creaLed or esLabllshed by speclal charLers" 1hus Lhe ConsLlLuLlon
pert Congress Lo creaLe a CCCC wlLh a speclal charLer 1here ls however no prohlblLlon on
Congress Lo creaLe several CCCCs of Lhe same class under one speclal enabllng charLer