GR 115381; (December, 1994) (Digest)
G.R. No. 115381 December 23, 1994
Kilusang Mayo Uno Labor Center, petitioner, vs. Hon. Jesus B. Garcia, Jr., the Land Transportation Franchising and Regulatory Board, and the Provincial Bus Operators Association of the Philippines, respondents.
FACTS
Petitioner Kilusang Mayo Uno Labor Center filed a petition for certiorari assailing the constitutionality and validity of several issuances from the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board (LTFRB). The challenged memoranda and circulars, including DOTC Memorandum Order No. 90-395, instituted a fare range scheme allowing provincial bus operators to adjust fares within 15% above or below the official LTFRB rate without prior application or public hearing. Another provision established a presumption of public need in favor of applicants for certificates of public convenience, shifting the burden of proof to oppositors.
The petitioner argued these policies constituted an unlawful delegation of the LTFRB’s regulatory mandate to fix just and reasonable fares, violating the Public Service Act. The LTFRB Chairman initially opined to the DOTC Secretary that implementing the fare range without a hearing was not legally feasible under Section 16(c) of the Public Service Act. Despite this, the policies were promulgated and implemented.
ISSUE
Whether the DOTC and LTFRB memoranda and circulars, which allowed fare adjustments without a hearing and established a presumption of public need, are valid.
RULING
The Supreme Court declared the assailed issuances null and void. The legal logic is anchored on the nature of public utilities and the statutory duties of the LTFRB. Public utilities, like common carriers, are businesses affected with public interest. Consequently, the state has the authority and duty to regulate them to protect the common good. This regulatory power is vested by law in the LTFRB under the Public Service Act.
Section 16(c) of the Public Service Act explicitly requires that the fixing of rates must follow a specific procedure: the rate must be proposed by the operator, published, and subjected to a public hearing before the LTFRB can approve it. The fare range scheme allowed operators to change rates unilaterally within a band, effectively delegating the rate-fixing function away from the Board without the safeguards of notice and hearing. This constituted an abdication of the LTFRB’s non-delegable duty to determine just and reasonable fares, a duty imbued with public trust. Similarly, creating a presumption of public need contravened the statutory process by relieving the applicant of its burden to prove public necessity. The Court held that these policies were issued with grave abuse of discretion, as they contravened the clear mandates of the Public Service Act designed to protect the riding public through due process in rate regulation.