G.R. No. 243818 . April 26, 2022
RAOUL C. VILLARETE, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

On November 7, 2003, the Lung Center of the Philippines (LCP), with petitioner Dr. Raoul C. Villarete as its Deputy Director for Medical Services, entered into a Lease Contract with Himex Corporation for medical equipment. The Commission on Audit (COA) issued an Audit Observation Memorandum and later a Notice of Suspension concerning the transaction. COA Decision No. 2005-067 affirmed the disallowance of the payments, holding Dr. Villarete, among others, liable for certifying the expenses as lawful. Dr. Villarete, along with the LCP and another official, filed a Memorandum on Appeal. On September 13, 2012, COA issued Decision No. 2012-138 denying the appeal. A copy of this Decision was allegedly served on September 18, 2012, to Dr. Villarete through a representative, Nieva Jean Cajipe. Only the LCP’s Officer-in-Charge filed a Motion for Reconsideration, which was denied. No Motion for Reconsideration was filed by Dr. Villarete. Subsequently, a Notice of Finality of Decision was issued and received by a certain “Chie” on behalf of Dr. Villarete. COA then issued an Order of Execution. Dr. Villarete filed a Motion to Lift the Order of Execution, claiming he was not notified of Decision No. 2012-138 and the subsequent Resolution denying the LCP’s motion. COA denied his motion and subsequent reconsideration, ruling the Decision had attained finality as he failed to file a motion for reconsideration despite alleged receipt. Dr. Villarete petitioned the Supreme Court, arguing a violation of due process as he was never properly served with the Decision.

ISSUE

Whether or not respondent Commission on Audit committed grave abuse of discretion in issuing its September 8, 2015 Letter and March 15, 2018 Resolution for denying petitioner Dr. Villarete of his right to due process.

RULING

Yes, the Commission on Audit committed grave abuse of discretion. The Supreme Court granted the petition. Procedural due process requires notice and an opportunity to be heard. The records showed that Decision No. 2012-138 was served on a person claimed to be Dr. Villarete’s representative, but there was no proof that this person was his secretary or an authorized agent. Service to an unauthorized person is not effective service. Since Dr. Villarete was not validly notified of the adverse Decision, he was deprived of the opportunity to file a motion for reconsideration and exhaust remedies available under COA rules. Consequently, Decision No. 2012-138 did not attain finality as to him. The COA’s insistence on finality despite the lack of proper service constituted a capricious and whimsical exercise of judgment, amounting to grave abuse of discretion. The Court nullified the Notice of Finality of Decision and the Order of Execution as they pertained to Dr. Villarete and directed that he be allowed to file a motion for reconsideration of Decision No. 2012-138.