Office of the Ombudsman vs. Andutan, Jr.

A public official's valid resignation from service before the filing of an administrative complaint divests the Ombudsman of jurisdiction to institute administrative proceedings against him, even if the alleged offense was committed while he was still in office. The one-year period in Section 20(5) of R.A. 6770 is merely directory and does not bar the Ombudsman from investigating, but the Ombudsman cannot exercise disciplinary authority over a person who is no longer a public servant at the time the case is filed.

Uldarico P. Andutan, Jr. was the Deputy Director of the One-Stop Shop Tax Credit and Duty Drawback Center of the Department of Finance (DOF), a position that was political or non-career in nature. On June 30, 1998, then Executive Secretary Ronaldo Zamora issued a Memorandum directing all non-career officials or those occupying political positions to vacate their positions effective July 1, 1998. The Ombudsman, through its Fact Finding and Intelligence Bureau (FFIB), investigated anomalies in the illegal transfer of Tax Credit Certificates (TCCs) to Steel Asia Manufacturing Corporation, which led to both criminal and administrative charges against Andutan and several other government officials and private individuals.

Uldarico P. Andutan, Jr. was formerly the Deputy Director of the One-Stop Shop Tax Credit and Duty Drawback Center of the Department of Finance (DOF). On June 30, 1998, then Executive Secretary Ronaldo Zamora issued a Memorandum directing all non-career officials or those occupying political positions to vacate their positions effective July 1, 1998. Pursuant to this Memorandum, Andutan resigned from the DOF on July 1, 1998.

On September 1, 1999, the Fact Finding and Intelligence Bureau (FFIB) of the Ombudsman criminally charged Andutan, together with Antonio P. Belicena, former DOF Undersecretary; Rowena P. Malonzo, DOF Tax Specialist I; and Benjamin O. Yao, Augustus S. Lapid, and Antonio M. Lorenzana of Steel Asia Manufacturing Corporation, and Eulogio L. Reyes of Devmark Textiles Ind. Inc., with Estafa through Falsification of Public Documents and violations of Section 3(a), (e) and (j) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act. As government employees, Andutan, Belicena and Malonzo were likewise administratively charged with Grave Misconduct, Dishonesty, Falsification of Official Documents and Conduct Prejudicial to the Best Interest of the Service.

The criminal and administrative charges arose from anomalies in the illegal transfer of Tax Credit Certificates (TCCs) to Steel Asia. During the investigation, the FFIB found that Steel Asia fraudulently obtained TCCs worth ₱242,433,534.00. The FFIB concluded that Belicena, Malonzo and Andutan — in their respective capacities — irregularly approved the issuance of the TCCs to several garment/textile companies and allowed their subsequent illegal transfer to Steel Asia.

On November 11, 1999, the Ombudsman ordered the respondents to submit their counter-affidavits. Only Malonzo complied, prompting the Ombudsman to set a Preliminary Conference on March 13, 2000. Upon the respondents' failure to appear at the March 20, 2000 hearing, the Ombudsman deemed the case submitted for resolution. On July 30, 2001, the Ombudsman found the respondents guilty of Gross Neglect of Duty. Having been separated from the service, Andutan was imposed the penalty of forfeiture of all leaves, retirement and other benefits and privileges, and perpetual disqualification from reinstatement and/or reemployment in any branch or instrumentality of the government, including government owned and controlled agencies or corporations.

After failing to obtain a reconsideration of the decision, Andutan filed a petition for review on certiorari before the Court of Appeals. On July 28, 2004, the CA annulled and set aside the Ombudsman's decision, ruling that the Ombudsman should not have considered the administrative complaints because Section 20 of R.A. 6770 provides that the Ombudsman may not conduct the necessary investigation of any administrative act or omission complained of if the complaint was filed after one year from the occurrence of the act or omission complained of, and because the administrative case was filed after Andutan's forced resignation.

• Directory Nature of Section 20(5): The Ombudsman argued that Section 20 of R.A. 6770 is not mandatory; the use of the word "may" indicates that Section 20 is merely directory or permissive, and it is not ministerial upon the Ombudsman to dismiss an administrative complaint as long as any of the circumstances under Section 20 is present.

• Constitutional Mandate: The Ombudsman urged the Court to examine its mandate under Section 13, Article XI of the 1987 Constitution and hold that an imposition of a one-year prescriptive period on the filing of cases unconstitutionally restricts its mandate.

• Resignation Does Not Moot the Case: Relying on Section VI(1) of Civil Service Commission Memorandum Circular No. 38, the Ombudsman argued that as long as the breach of conduct was committed while the public official or employee was still in the service, a public servant's resignation is not a bar to administrative investigation, prosecution and adjudication.

• Accessory Penalties: The Ombudsman argued that even if Andutan had already resigned, there is a need to determine whether there remain penalties capable of imposition, like bar from reentering public service and forfeiture of benefits.

• Substantial Evidence: The Ombudsman reiterated that its findings against Andutan are supported by substantial evidence.

• Section 20(5) as Prohibition: Andutan argued that Section 20(5) does not purport to impose a prescriptive period but simply prohibits the Office of the Ombudsman from conducting an investigation where the complaint was filed more than one year from the occurrence of the act or omission complained of; the phrase "may not conduct the necessary investigation" means the Ombudsman is prohibited to act on cases falling under the enumerated circumstances.

• Mootness Due to Resignation: Andutan argued that the administrative case against him was moot because he was no longer in the public service at the time the case was commenced; unlike the cases cited by the Ombudsman where investigations were commenced prior to resignation, he had already resigned before the administrative case was initiated, and his resignation was not preemptive but was done pursuant to the Memorandum issued by Executive Secretary Zamora.

• Accessory Penalties Cannot Stand Alone: Andutan argued that the Ombudsman's opinion that accessory penalties may still be imposed is untenable since it is a fundamental legal principle that accessory follows the principal, and the former cannot exist independently of the latter.

• Due Process Violation: Andutan submitted that the Ombudsman's findings were void because procedural and substantive due process were not observed, and the findings lacked legal and factual bases.

• Directory or Mandatory Nature of Section 20(5): Whether Section 20(5) of R.A. 6770 prohibits the Ombudsman from conducting an administrative investigation a year after the act was committed.

• Effect of Resignation on Jurisdiction: Whether Andutan's resignation renders moot the administrative case filed against him.

• Substantial Evidence: Assuming that the administrative case is not moot, whether the Ombudsman's findings are supported by substantial evidence.

• Directory or Mandatory Nature of Section 20(5): No. Section 20(5) of R.A. 6770 is merely directory; the Ombudsman is not prohibited from conducting an investigation a year after the supposed act was committed. The use of the word "may" is permissive and operates to confer discretion upon the Ombudsman.

• Effect of Resignation on Jurisdiction: Yes. Andutan's resignation divests the Ombudsman of its right to institute an administrative complaint against him. Although the Ombudsman is not precluded by Section 20(5) from conducting the investigation, it can no longer institute an administrative case against Andutan because he was not a public servant at the time the case was filed.

• Substantial Evidence: Not reached. Consistent with the holding that Andutan is no longer the proper subject of an administrative complaint, the Court found no reason to delve on the Ombudsman's factual findings.

• Directory or Mandatory Nature of Section 20(5): The Court relied on settled jurisprudence, particularly Office of the Ombudsman vs. De Sahagun, which held that administrative offenses do not prescribe because they pertain to the character of public officers and employees, and the object sought is not punishment but the improvement of public service and preservation of public's faith and confidence in government. In Melchor vs. Gironella, the Court held that the period in Section 20(5) does not refer to prescription of the offense but to the discretion given to the Ombudsman on whether to investigate. The use of "may" is permissive and operates to confer discretion, while "shall" is imperative. The CA's declaration that the negative phrase "may not" is mandatory in tenor was rejected as not supported by jurisprudence on statutory construction. Thus, even if the administrative case was filed beyond the one-year period, the Ombudsman was well within its discretion to conduct the investigation.

• Effect of Resignation on Jurisdiction: The Court distinguished the present case from prior jurisprudence. In cases like Pagano vs. Nazarro, Jr. and Baquerfo vs. Sanchez, the public officials resigned either to prevent the continuation of a case already filed or to pre-empt the imminent filing of one. Here, neither situation obtains. Andutan's resignation was neither his choice nor of his own doing; he was forced to resign pursuant to the Executive Secretary's Memorandum. He resigned on July 1, 1998, while the administrative case was filed on September 1, 1999 — one year and two months after his resignation. The Ombudsman's assertion that Andutan pre-empted the filing of a case by resigning was unfounded. The Court disagreed with the Ombudsman's interpretation of Section VI of CSC Memorandum Circular No. 38, holding that if accepted, any official — even if separated from service for a long time — may be subject to disciplinary authority ad infinitum, which is inconsistent with the principal motivation of the law to improve public service and not to punish the public official.

• Accessory Penalties: The Court rejected the Ombudsman's argument that the availability of accessory penalties justifies the continuation of the administrative case. Reading Pagano in context, the justification for continuing the administrative case notwithstanding resignation was the official's "bad faith" in filing her certificate of candidacy to pre-empt the case, not the availability of accessory penalties. The State must perform its task of preserving the inviolability of public office within the limits set by law, particularly the limits of jurisdiction. Under the "threefold liability rule," the wrongful acts or omissions of a public officer may give rise to civil, criminal and administrative liability; even if the Ombudsman may no longer file an administrative case against a resigned official, it may still file criminal and civil cases. In fact, a criminal case for Estafa and violations of the Anti-Graft and Corrupt Practices Act had already been filed against Andutan.

• Directory vs. Mandatory Statutory Construction — The use of the word "may" in a statute is permissive and operates to confer discretion, while the word "shall" is imperative and operates to impose a duty which may be enforced. Applied here, Section 20(5) of R.A. 6770, which states that the Ombudsman "may not conduct the necessary investigation" if the complaint was filed after one year, is directory in nature and does not bar the Ombudsman from investigating complaints filed beyond the one-year period.

• Resignation and Administrative Jurisdiction — A public official's resignation does not render moot an administrative case that was filed prior to the official's resignation, nor does it preclude the finding of administrative liability when the resignation was made to prevent the continuation of a case already filed or to pre-empt the imminent filing of one. However, where the official has validly resigned before the administrative case is filed — particularly where the resignation was forced and not preemptive — the Ombudsman is divested of jurisdiction to institute administrative proceedings against him.

• Threefold Liability Rule — The wrongful acts or omissions of a public officer may give rise to civil, criminal and administrative liability. Even if the Ombudsman may no longer file an administrative case against a public official who has already resigned or retired, the Ombudsman may still file criminal and civil cases to vindicate the alleged transgressions.

• "Clearly, Section 20 of R.A. 6770 does not prohibit the Ombudsman from conducting an administrative investigation after the lapse of one year, reckoned from the time the alleged act was committed. Without doubt, even if the administrative case was filed beyond the one (1) year period stated in Section 20(5), the Ombudsman was well within its discretion to conduct the administrative investigation." — This passage resolves the first issue, confirming the directory nature of Section 20(5) and the Ombudsman's discretion to investigate regardless of the one-year period.

• "Although the Ombudsman is not precluded by Section 20(5) of R.A. 6770 from conducting the investigation, the Ombudsman can no longer institute an administrative case against Andutan because the latter was not a public servant at the time the case was filed." — This passage states the core ratio decidendi: resignation before the filing of the administrative case divests the Ombudsman of jurisdiction.

• "If we agree with this interpretation, any official – even if he has been separated from the service for a long time – may still be subject to the disciplinary authority of his superiors, ad infinitum. We believe that this interpretation is inconsistent with the principal motivation of the law – which is to improve public service and to preserve the public's faith and confidence in the government, and not the punishment of the public official concerned." — This passage explains why the Ombudsman's broad interpretation of CSC Memorandum Circular No. 38 was rejected, emphasizing the policy underlying administrative discipline.

• "Plainly, our justification for the continuation of the administrative case – notwithstanding Pagano's resignation – was her 'bad faith' in filing the certificate of candidacy, and not the availability of accessory penalties." — This passage clarifies the proper reading of Pagano vs. Nazarro, Jr. and distinguishes the availability of accessory penalties as a mere consequence of bad-faith resignation, not an independent ground for continuing administrative proceedings.

• Office of the Ombudsman vs. De Sahagun, G.R. No. 167982, August 13, 2008, 562 SCRA 122 — Controlling precedent on the directory nature of Section 20(5) of R.A. 6770 and the rule that administrative offenses do not prescribe; quoted extensively for the proposition that the object of administrative discipline is improvement of public service, not punishment.

• Melchor vs. Gironella, G.R. No. 151138, February 16, 2005, 451 SCRA 476 — Followed; held that the period in Section 20(5) refers to the discretion given to the Ombudsman, not prescription of the offense; the word "may" is permissive.

• Filipino vs. Macabuhay, G.R. No. 158960, November 24, 2006, 508 SCRA 50 — Followed; interpreted Section 20(5) as directory, holding that it is discretionary upon the Ombudsman whether to conduct an investigation even if the complaint was filed after one year.

• Pagano vs. Nazarro, Jr., G.R. No. 149072, September 21, 2007, 533 SCRA 622 — Distinguished; in that case, the respondent's precipitate resignation to pre-empt the filing of an administrative case did not render the case moot, but the justification was bad faith, not the availability of accessory penalties.

• Baquerfo vs. Sanchez, 495 Phil. 10 (2005) — Distinguished; involved resignation to prevent the continuation of a case already filed, unlike the present case where the administrative case was filed after resignation.

• Office of the Court Administrator vs. Juan, A.M. No. P-03-1726, July 22, 2004, 434 SCRA 654 — Cited in Pagano for the rule that precipitate resignation of a government employee charged with an offense punishable by dismissal does not render the administrative case moot.

• Section 20(5), Republic Act No. 6770 — The Ombudsman "may not conduct the necessary investigation of any administrative act or omission complained of if it believes that x x x [t]he complaint was filed after one year from the occurrence of the act or omission complained of." The Court held this provision is directory, not mandatory, and does not bar the Ombudsman from investigating complaints filed beyond one year.

• Section 13, Article XI, 1987 Constitution — The Ombudsman's constitutional mandate; the Ombudsman argued that a one-year prescriptive period would unconstitutionally restrict this mandate, though the Court resolved the case on jurisdictional grounds without reaching this constitutional question.

• Section VI(1), Civil Service Commission Memorandum Circular No. 38 — Provides that an officer or employee under administrative investigation may be allowed to resign pending decision of his case without prejudice to the continuation of the proceeding, and without prejudice to the filing of any administrative or criminal case for acts committed while still in the service. The Court rejected the Ombudsman's broad interpretation of this provision.

• Section 3(a), (e) and (j), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The criminal provisions under which Andutan and his co-respondents were charged; the Court noted that criminal and civil cases remain available remedies even where administrative jurisdiction has been lost.

• Section 9, Republic Act No. 3019 — Provides the penalties for violations, including imprisonment, perpetual disqualification from public office, and confiscation or forfeiture of prohibited interests; cited to show that criminal proceedings remain available against Andutan.

Associate Justice Antonio T. Carpio (Chairperson), Associate Justice Teresita J. Leonardo-De Castro (designated as Acting Member per Special Order No. 1006 dated June 10, 2011), Associate Justice Diosdado M. Peralta (additional member in lieu of Associate Justice Maria Lourdes P. A. Sereno per Special Order No. 1040 dated July 6, 2011), and Associate Justice Jose Portugal Perez concurred in the decision.