Between Negros OCC and Ayala Land: COA upholds property sale and lease contract

BACOLOD CITY, Philippines — The Commission on Audit (COA) has "approved with finality" its September 2012 decision in approving the contracts between the Negros Occidental provincial government and Ayala Land Inc. (ALI) on the sale and lease of its 7.7-hectare property in this city.

In a 5-page decision, dated Aug. 14, 2013, COA dismissed "for lack of merit" the motion for reconsideration of SM Prime Holdings Inc. (SMPHI) against the agency's decision last Sept. 21, 2012 approving the deed of conditional sale (DCS) and contract of lease (COL) between the LGU and ALI.

The final decision was signed by COA chairperson Ma. Gracia Pulido-Tan and Commissioners Heidei Mendoza and Rowena Guanzon.

Governor Alfredo Marañon Jr. Furnished the media a copy of the COA decision, which was the subject of SMPHI's motion for reconsideration filed on Nov. 13, last year.

In arguing the COA decision, SMPHI said: (1) COA went beyond its power in adjudicating on issues pending before the courts; and (2) COA should defer action on the approval of the DCS and COL to be consistent with the principle of "judicial courtesy," as explained in the case of Republic of the Philippines vs. Sandiganbayan (G.R. No. 166859, June 26, 2006).

On the other hand, the provincial government countered by contending that: (1) The SMPHI's MR was filed beyond the 30-day reglamentary period enunciated under Section 3, Rule 64 of the Rules of Court; and (2) COA has the primary, original and exclusive jurisdiction to adjudicate on the issues contained in the request of the provincial government and thus, prayed that the MR be dismissed for lack of merit.

COA, in its decision, said, "SMPHI failed to present valid and categorical arguments sufficient to overturn the findings of the Commission," and that the motion was received by the COA secretariat on Nov. 13, 2012, which was beyond the 30-day period for filing.

COA further said that the arguments of SMPHI, in its motion, were already disposed of and ruled upon by the commission in its COA Decision No. 2012-147 dated Sept. 21, 2012, thus it is unmeritorious, and that "contrary to the claim of SMPHI, this commission believes that its authority to decide on the issues pending before the courts is amply supported by law and jurisprudence."

This clearly belies the contention of SMPHI that COA went beyond its power in adjudicating on issues pending before the courts, the resolution read. The SC rulings clearly supports the action taken by the Commission, and SMPHI failed to present valid and categorical arguments sufficient to overturn the findings of the COA, the resolution added.

Marañon said: "At least it is over and this proves that we are right and what we are doing is according to the law."

SMPHI is questioning in court the decision of the Capitol's committee on awards and disposal of properties in July 2011 to award the sale and lease of the property to ALI which proposed the development of the P6-billion Capitol Civic Center in the 7.7-hectare property.

Based on the contracts approved by the COA in September last year, the deed of sale allows ALI to purchase 3.6587 hectares worth P750 million and lease of 4.0481 hectares at P2.95 million a month.

In reply to the latest COA decision, SMPHI said it "has an existing petition for certiorari, which raises legal issues regarding the bidding for the Capitol property. It is still pending with the Bacolod RTC.

"SMPHI is questioning the declaration by the provincial government of the failure of the public bidding and is hoping for a speedy determination of the legal issues plaguing the auction of the properties. The case arises from the time SM submitted the more superior bid. However, the province declared the bidding a 'failure,'" the company argued. (FREEMAN)