AGRA VS. COMMISSION ON AUDIT CITATION: GR No.

167807 DECEMBER 6, 2011

PONENTEL Leonardo-de Castro, J

FACTS:

On July 1, 1989, RA 6758 or the Compensation and Position Classification Act of 1989
took effect. Section 12 of which states that:

Section 12. Consolidation of allowances and compensation - All allowances,

except for representation and transportation allowances; including clothing and
laundry allowances; subsistence allowance of marine officers and crew on board
government vessels and hospital personnel; hazard pay; allowances of foreign
service personnel stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM, shall be deemed
included in the standardized salary rates herein prescribed. Such other additional
compensation, whether in cash or in kind, being received by the incumbents only
as of July 1, 1989 not integrated into the standardized salary rates shall continue
to be authorized.

Thereafter, the DBM, pursuant to its authority to implement RA 6758, issued DBM-CCC
No. 10 otherwise known as the IRR of the said law. Pertinent provision of the IRR is its
Section 5.5 which states that:

5.5. The following allowances/fringe benefits authorized to GOCCs/GFIa pursuant

to the aforementioned issuances ARE NOT likewise integrated in the basic salary
and allowed to be continued only for incumbents of positions as of June 30, 1989
who are authorized and actually receiving said allowances/benefits as of said date,
at the same terms and conditions prescribed in said issuances:

5.5.1 Rice subsidy

A group of NEA employees who were hired after October 31, 1989 claimed that they did
not receive rice allowances which prompted their filing of a special civil action for
mandamus against NEA before the Regional Trial Court. The RTC rendered a decision in
favor of the NEA Employees on December 15, 1999. The branch clerk of court issued a
certification stating that such judgement has become final and executory. NEA filed an
appeal to the CA, however the CA ordered the extinguishment of the funds of NEA. Thus,
NEA filed an appeal before the Supreme Court. Meanwhile the RTC held in abeyance the
execution of the December 15, 199 decision.

The SC reversed and set aside the CA decision and reinstated the RTC decision stating,
among other things:

Under Commonwealth Act No. 327, as amended, by Section 26 of P.D. No. 1445,
it is the COA which has primary jurisdiction to examine, audit and settle “all debts
and claims of any sort” due from or owing the Government or any of its
subdivisions, agencies and instrumentalities, including government-owned or
control corporations and their subsidiaries. With respect to money claims arising
from the implementation of RA No 6758, their allowance or disallowance is for the
COA to decide, subject only to the remedy of appeal by petition for certiorari to this
Court.
Thereafter in 2001 the Office of the Government Corporate Counsel (OGCC) in response
to the request of the then NEA Administrator stated that since there was no appeal made
in the December 15, 1999 decision by the RTC, such had become the law of the case
which must now be applied. Pursuant to such opinion, the NEA issued Resolution No. 29
approving the entitlement of rice allowances to NEA employees hired after October 31,
1989

However, the resident auditor of COA did not allow the payment of the rice allowance for
those who are not incumbent as of June 30, 1989.

Motion for reconsideration was filed before the COA but the same was denied, and hence
this petition.

ISSUE: WON the RTC has jurisdiction over the claim of NEA employees.

HELD: NO. The RTC has no jurisdiction to decide on the allowance or disallowance of
money claims arising from the implementation of RA 6758. Under the doctrine of primary
jurisdiction, when an administrative body clothed with original and exclusive jurisdiction,
courts are utterly without power and authority to exercise concurrently such jurisdiction.
Accordingly, all the proceedings of the court in violation of that doctrine and all orders and
decisions reached thereby are null and void. It will be noted that money claims are
cognizable by the COA and its decision is appealable only to the Supreme Court. The
lower courts have nothing to do with such genus of transactions. The SC observed
however that the RTC acted prudently in halting implementation of the writ of execution to
allow the parties to preempt the action of the COA.