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Case Digest: COMELEC, et. al. vs Judge Ma. Luisa Quijano-Padilla RTC of QC Branch 215 and Photokina Marketing Corporation, G.R. No. 151992

COMELEC, et. al. vs Judge Ma. Luisa Quijano-Padilla RTC of QC Branch 215 and Photokina Marketing Corporation, GR. No. 151992, September 8, 2002

Subject: Obligations and Contracts

FACTS

Congress passed Republic Act No. 8189, otherwise known as the "Voter’s Registration Act of 1996," providing for the modernization and computerization of the voters’ registration list and the appropriation of funds therefor "in order to establish a clean, complete, permanent and updated list of voters."

Pursuant to RA8189, COMELEC promulgated Resolution No. 00-0315 approving in principle the Voters’ Registration and Identification System Project (VRIS Project for brevity).

In September 1999, the COMELEC issued invitations to pre-qualify and bid for the supply and installation of information technology equipment and ancillary services for its VRIS Project.

Private respondent Photokina Marketing Corporation (PHOTOKINA) pre-qualified and was allowed to participate as one of the bidders. After the public bidding was conducted, PHOTOKINA’s bid in the amount of P6.588B and was declared the winning bidder. In September 2000, the COMELEC issued the Notice of Award to PHOTOKINA, which, in turn, immediately accepted the same. The parties then proceeded to formalize the contract.

However, under RA 8760 the budget appropriated by Congress for the COMELEC’s modernization project was only P1B and that the actual available funds under the Certificate of Availability of Funds (CAF) issued by the Chief Accountant of the COMELEC was only P1.2B.

ISSUE

Whether or not Photokina, a successful bidder, can compel a government agency to formalize a contract with it notwithstanding that its bid exceeds the amount appropriated by Congress for the project.

RULING

No.

Under the law (Art 1409, NCC), (4) those contracts expressly prohibited or declared void by law are inexistent and void from the beginning. These contracts cannot be ratified and the right to set up the defense of illegality cannot be waived.

In the case, there was an oversight of the legal requirements as early as the bidding stage. The first step of a Bids and Awards Committee (BAC) is to determine whether the bids comply with the requirements. The BAC shall rate a bid "passed" only if it complies with all the requirements and the submitted price does not exceed the approved budget for the contract." The amount appropriated is insufficient to cover the cost of the entire VRIS Project. There is no way that the COMELEC could enter into a contract with PHOTOKINA whose accepted bid was way beyond the amount appropriated by law for the project. This being the case, the BAC should have rejected the bid for being excessive or should have withdrawn the Notice of Award on the ground that in the eyes of the law, the same is null and void.

PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize the contract. Since PHOTOKINA’s bid is beyond the amount appropriated by Congress for the VRIS Project, the proposed contract is not binding upon the COMELEC and is considered void; and that in issuing the questioned preliminary writs of mandatory and prohibitory injunction and in not dismissing Special Civil Action No. Q-01-45405, respondent judge acted with grave abuse of discretion. Petitioners cannot be compelled by a writ of mandamus to discharge a duty that involves the exercise of judgment and discretion, especially where disbursement of public funds is concerned.

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