Tuesday, January 26, 2016

Tawang Multi-Purpose Cooperative vs. La Trinidad Water District [GR No. 166471, March 22, 2011]

FACTS: Petitioner Tawang Multi-Purpose Cooperative is a cooperative organized to provide domestic water services in Barangay Tawang, La Trinidad, Benguet while respondent La Trinidad Water District is a local water utility created under Presidential Decree (PD) No. 198, as amended. La Trinidad Water District is authorized to supply water for domestic, industrial and commercial purposes within the municipality of La Trinidad, Benguet. Tawang Multi-Purpose Cooperative filed with the National Water Resources Board an application for a certificate of public convenience (CPC) to operate and maintain a waterworks system in Barangay Tawang. La Trinidad Water District opposed Tawang Multi-Purpoe Cooperative's application and claimed that, under Section 47 of PD No. 198, as amended, its franchise is exclusive.

ISSUE: Whether or not a public utility franchise may be exclusive in character

RULING: No. The 1935, 1973, and 1987 Constitution expressly and clearly prohibit the creation of franchise that are exclusive in character. The President, Congress and the Court cannot create indirectly franchises that are exclusive in character by allowing the Board of Directors of a water district and the Local Water Utilities Administration to create franchises that are exclusive in character. Section 47 of PD No. 198, as amended, allows the Board of Directors of La Trinidad Water District and Local Water Utilities Administration to create franchises that are xclusive in character. Clearly, Section 47 is patently unconstitutional.

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