THIRD DIVISION

[G.R. No. 130191. April 27, 1998.]

RODRIGO R. DUTERTE and BENJAMIN C. DE GUZMAN , petitioners, vs .

THE HONORABLE SANDIGANBAYAN , respondent.

De Borja Medialdea Bello Guevarra Serapio & Gerodias and Federico L. Melocoton for
petitioners.
The Solicitor General for respondent.

SYNOPSIS

With a view to make Davao City a leading center for computer systems and technology
development, the Davao City Local Automation Project was launched by the city
government. The City Council of Davao through its City Mayor entered into a computer
contract with Systems Plus, Inc. (SPI). This, however, became the center of controversy
that led the parties thereto to mutually rescind their contract. The controversy herein
reached the Office of the Ombudsman through a letter-complaint of a concerned citizen,
which was docketed as OMB-MIN-90-0425 and through an unverified complaint filed by
the Anti-Graft League-Davao City Chapter. However, the petitioners were charged before
the Sandiganbayan only several years after the happening of the event in question.
Petitioners filed a motion for reconsideration based on the following grounds: (1)
Petitioners were deprived of their right to a preliminary investigation, due process and the
speedy disposition of their case; (2) Petitioner Duterte acted in good faith and was clothed
with authority to enter into the subject contract; (3) There is no contract manifestly and
grossly disadvantageous to the government since the subject contract has been duly
rescinded. The Ombudsman denied their motion for reconsideration. Petitioners then filed
a Motion to Quash the information at the Sandiganbayan. The Sandiganbayan denied their
Motion to Quash as well as their motion for reconsideration. Hence, this special civil action
for certiorari seeking to set aside the order of the Sandiganbayan.
The Supreme Court granted the petition and dismissed the criminal case filed before the
Sandiganbayan. The Court found that the preliminary investigation of the charges against
petitioners had been conducted not in the manner laid down in Administrative Order No.
07. Compounding the deprivation of petitioners of their right to a preliminary investigation
was the undue and unreasonable delay in the termination of the irregularly conducted
preliminary investigation. Finally, under the facts of the case, there was no basis in law or in
fact to charge petitioners for violation of Sec. 3(g) of R.A. No. 3019. The computerization
contract was rescinded before the Anti-Graft League filed its complaint with the
Ombudsman, hence, there was no longer any contract to speak of. The contract became in
contemplation of law, non-existent, as if no contract was ever executed. CASaEc

SYLLABUS

1. REMEDIAL LAW; CRIMINAL PROCEDURE; RIGHT OF THE ACCUSED; PRELIMINARY

INVESTIGATION; IMPROPER CONDUCT THEREOF MAY BE DEEMED TO VIOLATE THE
ACCUSED'S RIGHT TO DUE PROCESS; CASE AT BAR. — The Court has judiciously studied
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 the case records and found that the preliminary investigation of the charges against
petitioners has been conducted not in the manner laid down in Administrative Order No.
07. In the 12 November 1991 Order of Graft Investigator Manriquez, petitioners were
merely directed to submit a point-by-point comment under oath on the allegations in Civil
Case No. 20, 550-91 and on SAR No. 91-05. The said order was not accompanied by a
single affidavit of any person charging petitioners of any offense as required by law. (A.O.
No. 07 Rule II, Sec. 4(b) They were just required to comment upon the allegations in Civil
Case No. 20, 550-91 of the Regional Trial Court of Davao City which had earlier been
dismissed and on the COA Special Audit Report. Petitioners had no inkling that they were
being subjected to a preliminary investigation as in fact there was no indication in the
order that a preliminary investigation was being conducted. If Graft Investigator Manriquez
had intended merely to adopt the allegations of the plaintiffs in the civil case or the Special
Audit Report (whose recommendation for the cancellation of the contract in question had
been complied with) as his bases for criminal prosecution, then the procedure was plainly
anomalous and highly irregular. As a consequence, petitioners' constitutional right to due
process was violated. In what passes off as application of Sections (2) and (4), Rule II of
Administrative Order No. 07 (Rules of Procedure of the Office of the Ombudsman), all that
petitioners were asked to do was merely to file their comment upon every allegation of the
complaint in Civil Case No. 20, 550-91 in the Regional Trial Court (RTC) and on the COA
Special Audit Report. The comment referred to in Section 2(b), Rule II, of A.O. No. 07 is not
part of or is equivalent to the preliminary investigation contemplated in Sec. 4, Rule II, of
the same Administrative Order. A plain reading of Sec. 2 would convey the idea that upon
evaluation of the complaint, the investigating officer may recommend its outright
dismissal for palpable want of merit; otherwise, or if the complaint appears to have some
merit, the investigator may recommend action under any of those enumerated from (b) to
(f), that is, the investigator may recommend that the complaint be: referred to respondent
for comment, or endorsed to the proper government office or agency which has
jurisdiction over the case; or forwarded to the appropriate office or official for fact-finding
investigation; or referred for administrative adjudication; or subjected to preliminary
investigation. Now, if the investigator opts to recommend the filing of a comment by the
respondent, it is presumably because he needs more facts and information for further
evaluation of the merits of the complaint. That being done, the investigating officer shall
again recommend any one of the actions enumerated in Section 2, which include the
conduct of a preliminary investigation. AEIcTD

2. ID.; ID.; ID.; ID.; ELEMENTS THEREOF; NOT PRESENT IN CASE AT BAR. — A
preliminary investigation, on the other hand, takes on an adversarial quality and an entirely
different procedure comes into play. This must be so because the purpose of a preliminary
investigation or a previous inquiry of some kind, before an accused person is placed on
trial, is to secure the innocent against hasty, malicious and oppressive prosecution, and to
protect him from an open and public accusation of a crime, from the trouble, expenses and
anxiety of public trial. It is also intended to protect the state from having to conduct
useless and expensive trials. While the right is statutory rather than constitutional in its
fundamental, it is a component part of due process in criminal justice. The right to have a
preliminary investigation conducted before being bound over to trial for a criminal offense
and hence formally at risk of incarceration or some other penalty, is not a mere formal or
technical right; it is a substantive right. To deny the accused's claim to a preliminary
investigation would be to deprive him of the full measure of his right to due process. Note
that in preliminary investigation, if the complaint is unverified or based only on official
reports (which is the situation obtaining in the case at bar), the complainant is required to
submit affidavits to substantiate the complaint. The investigating officer, thereafter, shall
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 issue an order, to which copies of the complaint-affidavit are attached, requiring the
respondent to submit his counter-affidavits. In the preliminary investigation, what the
respondent is required to file is a counter-affidavit, not a comment. It is only when the
respondent fails to file a counter-affidavit may the investigating officer consider the
respondent's comment as the answer to the complaint. Against the foregoing backdrop,
there was a palpable non-observance by the Office of the Ombudsman of the fundamental
requirements of preliminary investigation.
3. ID.; ID.; ID.; ID.; ADMINISTRATIVE ORDER NO. 7 (RULES OF PROCEDURE OF THE
OFFICE OF THE OMBUDSMAN) REQUIREMENT FOR THE COMPLAINANT TO SUBMIT HIS
AFFIDAVIT AND THOSE OF HIS WITNESSES, MANDATORY. — In Olivas vs. Office of the
Ombudsman, 239 SCRA 283 (1994) this Court, speaking through Justice Vicente V.
Mendoza, emphasized that it is mandatory requirement for the complainant to submit his
affidavit and those of his witnesses before the respondent can be compelled to submit his
counter-affidavits and other supporting documents. Thus: Even in investigations looking to
the prosecution of a party, Rule I, Section 3 of Administrative Order No. 7 (Rules of
Procedure of the Office of the Ombudsman, can only apply to the general criminal
investigation, which in the case at bar was already conducted by the PCGG. But after the
Ombudsman and his deputies have gathered evidence and their investigation has ceased
to be a general exploratory one and they decide to bring the action against a party, their
proceedings become adversary and Rule II Section 4(a) then applies. This means that
before the respondent can be required to submit counter-affidavits and other supporting
documents, the complainant must submit his affidavit and those of his witnesses. This is
true not only of prosecutions of graft cases under Rep. Act No. 3019 but also of actions
for the recovery of unexplained wealth under Rep. Act No. 1379, because Section 2 of this
latter law requires that before a petition is filed there must be a "previous inquiry similar to
preliminary investigation in criminal cases." Indeed, since a preliminary investigation is
designed to screen cases for trial, only evidence may be considered. While reports and
even raw information may justify the initiation of an investigation, the stage of preliminary
investigation can be held only after sufficient evidence has been gathered and evaluated
warranting the eventual prosecution of the case in court. As this Court held in Cojuangco,
Jr. vs. PCGG: Although such a preliminary investigation is not a trial and is not intended to
usurp the function of the trial court, it is not a casual affair. The officer conducting the
same investigates or inquiries into the facts concerning the commission of the crime with
the end in view of determining whether or not an information may be prepared against the
accused. Indeed, a preliminary investigation is in effect a realistic judicial appraisal of the
merits of the case. Sufficient proof of the guilt of the accused must be adduced so that
when the case is tried, the trial court may not be bound as a matter of law to order an
acquittal. A preliminary investigation has then been called a judicial inquiry. It is a judicial
proceeding. An act becomes judicial when there is opportunity to be heard and for the
production and weighing of evidence, and a decision is rendered thereof. STIcEA

4. ID.; ID.; ID.; RIGHT TO SPEEDY TRIAL; INFRINGED UPON BY THE INORDINATE DELAY
IN THE CONDUCT OF THE PRELIMINARY INVESTIGATION. — Petitioner's manifestation
adopting the comments of their co-respondents was filed on 18 February 1992. However,
it was only on 22 February 1996 or four (4) years later, that petitioners received a
memorandum dated 8 February 1996 submitted by Special Prosecutor Officer I Lemuel M.
De Guzman recommending the filing of information against them for violation of Sec. 3(g)
of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The inordinate delay in the conduct
of the "preliminary investigation" infringed upon their constitutionally guaranteed right to a
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 speedy disposition of their case. In Tatad vs. Sandiganbayan, we held that an undue delay
of close to three (3) years in the termination of the preliminary investigation in the light of
the circumstances obtaining in that case warranted the dismissal of the case. In the recent
case of Angchangco, Jr. vs. Ombudsman, 268 SCRA 301 (1997), the Court upheld
Angchangco's right to the speedy disposition of his case. Angchangco was a sheriff in the
Regional Trial Court of Agusan del Norte and Butuan City. In 1990 criminal complaints
were filed against him which remained pending before the Ombudsman even after his
retirement in 1994. The Court thus ruled: Here, the Office of the Ombudsman, due to its
failure to resolve the criminal charges against petitioner for more than six years, has
transgressed on the constitutional right of petitioner to due process and to a speedy
disposition of the cases against him, as well as the Ombudsman's own constitutional duty
to act promptly on complaints filed before it. For all these past 6 years, petitioner has
remained under a cloud, and since his retirement in September 1994, he has been deprived
of the fruits of his retirement after serving the government for over 42 years all because of
the inaction of respondent Ombudsman. If we wait any longer, it may be too late for
petitioner to receive his retirement benefits, not to speak of clearing his name. This is a
case of plain injustice which calls for the issuance of the writ prayed for. The constitutional
right to speedy disposition of cases does not come into play only when political
considerations are involved. The Constitution makes no such distinction. While political
motivation in Tatad may have been a factor in the undue delay in the termination of the
preliminary investigation therein to justify the invocation of their right to speedy
disposition of cases, the particular facts of each case must be taken into consideration in
the grant of the relief sought. In Alviso vs. Sandiganbayan, the Court observed that the
concept of speedy disposition of cases" is a relative term and must necessarily be a
flexible concept" and that the factors that may be considered and balanced are the "length
of the delay, the assertion or failure to assert such right by the accused, and the prejudice
caused by the delay."
5. CRIMINAL LAW; SEC. 3(G) OF R.A. NO. 3019; ELEMENTS TO ESTABLISH VIOLATION
THEREOF; NOT PRESENT IN CASE AT BAR. — Under the facts of the case, there is no basis
in law or in fact to charge petitioners for violation of Sec. 3(g) of R.A. No. 3019. To
establish probable cause against the offender for violation of Sec. 3(g), the following
elements must be present: (1) the offender is a public officer; (2) he entered into a
contract or transaction in behalf of the government; and (3) the contract or transaction is
grossly and manifestly disadvantageous to the government. The second element of the
crime — that the accused public officers entered into a contract in behalf of the
government — is absent. The computerization contract was rescinded on 6 May 1991
before SAR No. 91-05 came out on 31 May 1991 and before the Anti-Graft League filed ifs
complaint with the Ombudsman on 1 August 1991. Hence, at that time the Anti-Graft
League instituted their complaint and the Ombudsman issued its Order on 12 November
1991, there was no longer any contract to speak of. The contract, after 6 May 1991
became in contemplation of law, non-existent, as if no contract was ever executed. aDECHI

DECISION

KAPUNAN , J : p

The right to a preliminary investigation is not a mere formal right; it is a substantive right.
To deny the accused of such right would be to deprive him of due process. LLcd

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 In this special civil action for certiorari with preliminary injunction, petitioners seek to set
aside the Order of the Sandiganbayan dated 27 June 1997 denying the Motion to Quash
the information filed against them for violating Sec. 3(g) of R.A. No. 3019, otherwise
known as the Anti-Graft And Corrupt Practices Act. Petitioners similarly impugn the
Resolution of the Sandiganbayan dated 5 August 1997 which denied their Motion for
Reconsideration thereof.
Pertinent to this case are the following facts:
In 1990, the Davao City Local Automation Project was launched by the city government of
Davao. The goal of said project was to make Davao City a leading center for computer
systems and technology development. It also aimed to provide consultancy and training
services and to assist all local government units in Mindanao set up their respective
computer systems.
To implement the project, a Computerization Program Committee, composed of the
following was formed:
Chairman : Atty. Benjamin C. de Guzman, City Administrator
Members : Mr. Jorge Silvosa, Acting City Treasurer
Atty. Victorino Advincula, City Councilor
Mr. Alexis Almendras, City Councilor
Atty. Onofre Francisco, City Legal Officer
Mr. Rufino Ambrocio, Jr., Chief of Internal Control
Office
Atty. Mariano Kintanar, COA Resident Auditor. 1
The Committee's duty was to "conduct a thorough study of the different computers in
the market, taking into account the quality and acceptability of the products, the
reputation and track record of the manufacturers and/or their Philippine distributors,
the availability of the replacement parts and accessories in the Philippines, the
availability of service centers in the country that can undertake preventive maintenance
of the computer hardwares to ensure a long and uninterrupted use and, last but not the
least, the capability of the manufacturers and/or Philippine distributors to design and
put into place the computer system — complete with the ow of paperwork, forms to
be used and personnel required." 2
Following these guidelines, the Committee recommended the acquisition of Goldstar
computers manufactured by Goldstar Information and Communication, Ltd., South Korea
and exclusively distributed in the Philippines by Systems Plus, Inc. (SPI).
After obtaining prior clearance from COA Auditor Kintanar, the Committee proceeded to
negotiate with SPI, represented by its President Rodolfo V. Jao and Executive Vice
President Manuel T. Asis, for the acquisition and installation of the computer hardware and
the training of personnel for the Electronic Data-Processing Center. The total contract cost
amounted to P11,656,810.00
On 5 November 1990, the City Council (Sangguniang Panlungsod) of Davao unanimously
passed Resolution No. 1402 and Ordinance No. 173 approving the proposed contract for
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 computerization between Davao City and SPI. The Sanggunian, likewise, authorized the City
Mayor (petitioner Duterte) to sign the said contract for and in behalf of Davao City. 3
On the same day, the Sanggunian issued Resolution No. 1403 and Ordinance No. 174, the
General Fund Supplemental Budget No. 07 for CY 1990 appropriating P3,000,000.00 for
the city's computerization project.
Given the go-signal, the contract was duly signed by the parties thereto and on 8
November 1990, petitioner City Administrator de Guzman released to SPI PNB Check No.
65521 in the amount of P1,748,521.58 as downpayment.
On 27 November 1990, the Office of the Ombudsman-Mindanao received a letter-
complaint from a "concerned citizen," stating that "some city officials are going to make a
killing" in the transaction. 4 The complaint was docketed as OMB-MIN-90-0425. However,
no action was taken thereon. 5
Thereafter, sometime in February 1991, a complaint docketed as Civil Case No. 20,550-91,
was instituted before the Regional Trial Court of Davao City, Branch 12 by Dean Pilar Braga,
Hospicio C. Conanan, Jr. and Korsung Dabaw Foundation, Inc. against the petitioners, the
City Council, various city officials and SPI for the judicial declaration of nullity of the
aforestated resolutions and ordinances and the computer contract executed pursuant
thereto.
On 22 February 1991, Goldstar, through its agent, Mr. S.Y. Lee sent a proposal to petitioner
Duterte for the cancellation of the computerization contract.
Consequently, on 8 April 1991, the Sanggunian issued Resolution No. 449 and Ordinance
No. 53 accepting Goldstar's offer to cancel the computerization contract provided the
latter return the advance payment of P1,748,521.58 to the City Treasurer's Office within a
period of one month. Petitioner Duterte, as city mayor, was thus authorized to take the
proper steps for the mutual cancellation of the said contract and to sign all documents
relevant thereto. 6
Pursuant to the aforestated authority, on 6 May 1991, petitioner Duterte, in behalf of Davao
City, and SPI mutually rescinded the contract and the downpayment was duly refunded.
In the meantime, a Special Audit Team of the Commission on Audit was tasked to conduct
an audit of the Davao City Local Automation Project to determine if said contract
conformed to government laws and regulations.
On 31 May 1991, the team submitted its Special Audit Report (SAR) No. 91-05
recommending rescission of the subject contract. A copy of the report was sent to
petitioner Duterte by COA Chairman Eufemio C. Domingo on 7 June 1991. In the latter's
transmittal letter, Chairman Domingo summarized the findings of the special audit team,
thus:
1. The award of the contract for the "Davao City Local Automation
Project" to Systems Plus, Inc., for P11,656,810 was done thru
negotiated contract rather than thru competitive public bidding in
violation of Sections 2 and 8 of PD 526. Moreover, there was no
sufficient appropriation for this particular contract in violation of Sec.
85 of PD 1445.

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 2. Advance payment of P1.7M was made to Systems Plus, Inc. covering
15% of the contract cost of P11.6M in violation of Sec. 45 of PD 477
and Sec. 88 of PD 1445.
3. The cost of computer hardware and accessories under contract with
"Systems Plus, Inc. (SPI)" differed from the team's canvass by as
much as 1200% or a total of P1.8M.
4. The City had no Information Systems Plan (ISP) prior to the award of
the contract to SPI in direct violation of Malacañang Memo. Order No.
287 and NCC Memo. Circular 89-1 dated June 22, 1989. This
omission resulted in undue disadvantage to the City Government.
5. To remedy the foregoing deficiencies, the team recommends that the
contract with Systems Plus, Inc. be rescinded in view of the
questionable validity due to insufficient funding. Further, the
provisions of NCC-MC 89-1 dated June 22, 1989 regarding
procurement and/or installation of computer hardware/system
should be strictly adhered to. 7
The city government, intent on pursuing its computerization plan, decided to follow the
audit team's recommendation and sought the assistance of the National Computer Center
(NCC). After conducting the necessary studies, the NCC recommended the acquisition of
Philips computers in the amount of P15,792,150.00. Davao City complied with the NCC's
advice and hence, was finally able to obtain the needed computers.
Subsequently, on 1 August 1991, the Anti-Graft League-Davao City Chapter, through one
Miguel C. Enriquez, filed an unverified complaint with the Ombudsman-Mindanao against
petitioners, the City Treasurer, City Auditor, the whole city government of Davao and SPI.
The League alleged that the respondents, in entering into the computerization contract,
violated R.A. No. 3019 (Anti-Graft and Corrupt Practices Act), PD No. 1445 (Government
Auditing Code of the Philippines), COA circulars and regulations, the Revised Penal Code
and other pertinent penal laws. The case was docketed as OMB-3- 91-1768. 8
On 9 October 1991, Graft Investigation Officer (GIO) Pepito A. Manriquez of the Office of
the Ombudsman sent a letter 9 to COA Chairman Domingo requesting the Special Audit
Team to submit their joint affidavit to substantiate the complaint in compliance with
Section 4, par. (a) of the Rules of Procedure of the Office of the Ombudsman (A.O. No. 07).
On 14 October 1991, Judge Paul T. Arcangel, issued an Order dismissing Civil Case No.
20,550-91. The dispositive portion reads, thus:
WHEREFORE, in view of all the foregoing, this case is hereby dismissed on the
ground of prematurity and that it has become moot and academic with the
mutual cancellation of the contract. The other claims of the parties are hereby
denied. No pronouncement as to costs.

SO ORDERED. 1 0

On 12 November 1991, Graft Investigator Manriquez issued an order in OMB-3-91-1768

directing petitioners, Jorge Silvosa (City Treasurer), Mariano Kintanar (City Auditor) and
Manuel T. Asis of SPI to:
. . . file in ten (10) days (1) their respective verified point-by-point comment under
oath upon every allegation of the complaint in Civil Case No. 20,550-91 in the
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 Regional Trial Court (RTC), Branch 12, Davao City "Dean Pilar C. Braga, et al. vs.
Hon. Rodrigo Duterte," for Judicial Declaration of Nullity and Illegality of City
Council of Davao Resolutions and Ordinances, and the Computer Contract
executed Pursuant Thereto, for Recovery of Sum of Money, Professional Fees and
Costs — with Injunctive Relief, including the Issuance of a Restraining Order
and/or a Writ of Preliminary Prohibitory Injunction in which they filed a motion to
dismiss, not an answer and (2) the respective comments, also under oath, on the
Special Audit Report No. 91-05, a copy of which is attached. 1 1

On 4 December 1991, the Ombudsman received the affidavits of the Special Audit Team
but failed to furnish petitioners copies thereof.
On 18 February 1992, petitioners submitted a manifestation adopting the comments filed
by their co-respondents Jorge Silvosa and Mariano Kintanar dated 25 November 1991 and
17 January 1992, respectively.
Four years after, or on 22 February 1996, petitioners received a copy of a Memorandum
prepared by Special Prosecution Officer I, Lemuel M. De Guzman dated 8 February 1996
addressed to Ombudsman Aniano A. Desierto regarding OMB-MIN-90-0425 and OMB-3-
91-1768. Prosecutor De Guzman recommended that the charges of malversation, violation
of Sec. 3(e), R.A. No. 3019 and Art. 177, Revised Penal Code against petitioners and their
co-respondents be dismissed. He opined that any issue pertaining to unwarranted benefits
or injury to the government and malversation were rendered moot and academic by the
mutual rescission of the subject contract before the COA submitted its findings (SAR No.
91-05) or before the disbursement was disallowed. However, Prosecutor De Guzman
recommended that petitioners be charged under Sec. 3(g) of R.A No. 3019 "for having
entered into a contract manifestly and grossly disadvantageous to the government, the
elements of profit, unwarranted benefits or loss to government being immaterial." 1 2
Accordingly, the following information dated 8 February 1996 was filed against petitioners
before the Sandiganbayan (docketed as Criminal Case No. 23193): LLcd

That on or about November 5, 1990, in the City of Davao, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, both public
officers, accused Rodrigo R. Duterte being then the City Mayor and accused
Benjamin C. De Guzman being then the City Administrator of Davao City,
committing the crime herein charged in relation to, while in the performance and
taking advantage of their official functions, and conspiring and confederating
with each other, did then and there willfully, unlawfully and criminally enter into a
negotiated contract for the purchase of computer hardware and accessories with
the Systems Plus, Incorporated for and in consideration of the amount of PESOS :
ELEVEN MILLION SIX HUNDRED FIFTY-SIX THOUSAND EIGHT HUNDRED TEN
(P11,656,810.00), which contract is manifestly and grossly disadvantageous to
the government, said accused knowing fully-well that the said acquisition cost
has been overpriced by as much as twelve hundred (1200%) percent and without
subjecting said acquisition to the required public bidding.
CONTRARY TO LAW. 13

On 27 February 1996, petitioners filed a motion for reconsideration and on 29 March 1996,
a Supplemental Motion for Reconsideration on the following grounds:
1. Petitioners were deprived of their right to a preliminary investigation, due
process and the speedy disposition of their case;

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 2. Petitioner Duterte acted in good faith and was clothed with authority to
enter into the subject contract;
3. There is no contract manifestly and grossly disadvantageous to the
government since the subject contract has been duly rescinded.

On 19 March 1996, the Ombudsman issued a Resolution denying petitioners' motion for
reconsideration.
On 18 June 1997, petitioners filed a Motion to Quash which was denied by the
Sandiganbayan in its Order dated 27 June 1997. The Sandiganbayan ruled:
It appears, however, that the accused were able to file motions for the
reconsideration of the Resolution authorizing the filing of the Information herein
with the Ombudsman in Manila. This would mean, therefore, that whatever
decision which might have occurred with respect to the preliminary investigation
would have been remedied by the motion for reconsideration in the sense that
whatever the accused had to say in their behalf, they were able to do in that
motion for reconsideration.
Considering the denial thereof by the Office of the Ombudsman, the Court does
not believe itself empowered to authorize a reinvestigation on the ground of an
inadequacy of the basic preliminary investigation nor with respect to a dispute as
to the proper appreciation by the prosecution of the evidence at that time.
In view hereof, upon further representation by Atty. Medialdea that he represents
not only Mayor Duterte but City Administrator de Guzman as well, upon his
commitment, the arraignment hereof is now set for July 25, 1997 at 8:00 o'clock
in the morning. 1 4

On 15 July 1997, petitioners moved for reconsideration of the above order but the same
was denied by the Sandiganbayan for lack of merit in its Resolution dated 5 August 1997.
15

Hence, the present recourse.

Petitioners allege that:
THE HONORABLE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING
PETITIONERS' MOTION TO QUASH AND MOTION FOR RECONSIDERATION,
CONSIDERING THAT:

A
(1) PETITIONERS WERE EFFECTIVELY DEPRIVED OF THEIR RIGHT TO
A PRELIMINARY INVESTIGATION PURSUANT TO SEC. 4, RULE II OF
ADMINISTRATIVE ORDER NO. 07 (RULES OF PROCEDURE OF THE OFFICE
OF THE OMBUDSMAN); AND
(2) ASSUMING THAT A PRELIMINARY INVESTIGATION WAS
PROPERLY CONDUCTED, THERE WAS AN INORDINATE DELAY IN
TERMINATING THE SAME THEREBY DEPRIVING THEM OF THEIR RIGHT
TO DUE PROCESS AND SPEEDY DISPOSITION OF THE CASE.

B
THERE IS NO SUFFICIENT BASIS, IN FACT AND IN LAW, TO CHARGE
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 PETITIONERS DUTERTE AND DE GUZMAN OF VIOLATING SEC. 3 (G) OF R.A.
3019 IN THAT:

(1) PETITIONER DUTERTE ACTED IN GOOD FAITH AND WAS

CLOTHED WITH FULL LEGAL AUTHORITY FROM THE CITY COUNCIL TO
ENTER INTO A CONTRACT WITH SYSTEMS PLUS, INC.;
(2) THERE IS NO CONTRACT MANIFESTLY AND GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT TO SPEAK OF AS THE SAME
HAS BEEN RESCINDED AND NO DAMAGE WAS SUFFERED BY THE CITY
GOVERNMENT;
(3) ASSUMING THAT THE CONTRACT WAS NOT RESCINDED, THE
SAME CANNOT BE CONSIDERED AS MANIFESTLY AND GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT. 1 6

On 4 September 1997, the Court issued a Temporary Restraining Order enjoining the
Sandiganbayan from further proceeding with Criminal Case No. 23193.
The Court finds the petition meritorious.
I
We have judiciously studied the case records and we find that the preliminary investigation
of the charges against petitioners has been conducted not in the manner laid down in
Administrative Order No. 07.

In the 12 November 1991 Order of Graft Investigator Manriquez, petitioners were merely
directed to submit a point-by-point comment under oath on the allegations in Civil Case
No. 20,550-91 and on SAR No. 91-05. The said order was not accompanied by a single
affidavit of any person charging petitioners of any offense as required by law. 1 7 They were
just required to comment upon the allegations in Civil Case No. 20,550-91 of the Regional
Trial Court of Davao City which had earlier been dismissed and on the COA Special Audit
Report. Petitioners had no inkling that they were being subjected to a preliminary
investigation as in fact there was no indication in the order that a preliminary investigation
was being conducted. If Graft Investigator Manriquez had intended merely to adopt the
allegations of the plaintiffs in the civil case or the Special Audit Report (whose
recommendation for the cancellation of the contract in question had been complied with)
as his bases for criminal prosecution, then the procedure was plainly anomalous and highly
irregular. As a consequence, petitioners' constitutional right to due process was violated.
Sections (2) and (4), Rule II of Administrative Order No. 07 (Rules of Procedure of the
Office of the Ombudsman) provide:
Sec. 2. Evaluation. — Upon evaluating the complaint, the investigating officer
shall recommend whether or not it may be:
a) dismissed outright for want of palpable merit;
b) referred to respondent for comment;

c) endorsed to the proper government office or agency which has

jurisdiction over the case;

d) forwarded to the appropriate office or official for fact-finding

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 investigation;
e) referred for administrative adjudication; or
f) subjected to a preliminary investigation
xxx xxx xxx
Sec. 4. Procedure. — The preliminary investigation of cases falling under the
jurisdiction of the Sandiganbayan and Regional Trial Courts shall be conducted in
the manner prescribed in Section 3, Rule 112 of the Rules of Court, subject to the
following provisions:
a) If the complaint is not under oath or is based only on official
reports, the investigating officer shall require the complainant or
supporting witnesses to execute affidavits to substantiate the
complaints.
b) After such affidavits have been secured, the investigating officer
shall issue an order, attaching thereto a copy of the affidavits and
other supporting documents, directing the respondent to submit,
within ten (10) days from receipt thereof, his counter-affidavits and
controverting evidence with proof of service thereof on the
complainant. The complainant may file reply affidavits within ten
(10) days after service of the counter-affidavits.
c) If the respondent does not file a counter-affidavit, the investigating
officer may consider the comment filed by him, if any, as his answer
to the complaint. In any event, the respondent shall have access to
the evidence on record.

d) No motion to dismiss shall be allowed except for lack of

jurisdiction. Neither may a motion for a bill of particulars be
entertained. If respondent desires any matter in the complainant's
affidavit to be clarified, the particularization thereof may be done at
the time of clarificatory questioning in the manner provided in
paragraph (f) of this section.
e) If the respondent cannot be served with the order mentioned in
paragraph 6 hereof, or having been served, does not comply
therewith, the complaint shall be deemed submitted for resolution
on the basis of the evidence on record.

f) If, after the filing of the requisite affidavits and their supporting
evidences, there are facts material to the case which the
investigating officer may need to be clarified on, he may conduct a
clarificatory hearing during which the parties shall be afforded the
opportunity to be present but without the right to examine or cross-
examine the witness being questioned. Where the appearance of the
parties or witnesses is impracticable, the clarificatory questioning
may be conducted in writing, whereby the questions desired to be
asked by the investigating officer or a party shall be reduced into
writing and served on the witness concerned who shall be required
to answer the same in writing and under oath.

g) Upon the termination of the preliminary investigation, the

investigating officer shall forward the records of the case together
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 with his resolution to the designated authorities for their appropriate
action thereon.

No information may be filed and no complaint may be dismissed without

the written authority or approval of the Ombudsman in cases falling within
the jurisdiction of the Sandiganbayan, or the proper Deputy Ombudsman in
all other cases.

In what passes off as application of the foregoing rules, all that petitioners were asked to
do was merely to file their comment upon every allegation of the complaint in Civil Case
No. 20,550-91 in the Regional Trial Court (RTC) and on the COA Special Audit Report. The
comment referred to in Section 2(b) Rule II, of A.O. No. 07 is not part of or is equivalent to
the preliminary investigation contemplated in Sec. 4, Rule II, of the same Administrative
Order. A plain reading of Sec. 2 would convey the idea that upon evaluation of the
complaint, the investigating officer may recommend its outright dismissal for palpable
want of merit; otherwise, or if the complaint appears to have some merit, the investigator
may recommend action under any of those enumerated from (b) to (f), that is, the
investigator may recommend that the complaint be: referred to respondent for comment,
or endorsed to the proper government office or agency which has jurisdiction over the
case; or forwarded to the appropriate office or official for fact-finding investigation; or
referred for administrative adjudication; or subjected to preliminary investigation. Now, if
the investigator opts to recommend the filing of a comment by the respondent, it is
presumably because he needs more facts and information for further evaluation of the
merits of the complaint. That being done, the investigating officer shall again recommend
any one of the actions enumerated in Section 2, which include the conduct of a preliminary
investigation.
A preliminary investigation, on the other hand, takes on an adversarial quality and an
entirely different procedure comes into play. This must be so because the purpose of a
preliminary investigation or a previous inquiry of some kind, before an accused person is
placed on trial, is to secure the innocent against hasty, malicious and oppressive
prosecution, and to protect him from an open and public accusation of a crime, from the
trouble, expenses and anxiety of public trial. 1 8 It is also intended to protect the state from
having to conduct useless and expensive trials. 19 While the right is statutory rather than
constitutional in its fundament, it is a component part of due process in criminal justice.
The right to have a preliminary investigation conducted before being bound over to trial for
a criminal offense and hence formally at risk of incarceration or some other penalty, is not
a mere formal or technical right; it is a substantive right. To deny the accused's claim to a
preliminary investigation would be to deprive him of the full measure of his right to due
process. 2 0
Note that in preliminary investigation, if the complaint is unverified or based only on official
reports (which is the situation obtaining in the case at bar), the complainant is required to
submit affidavits to substantiate the complaint. The investigating officer, thereafter, shall
issue an order, to which copies of the complaint-affidavit are attached, requiring the
respondent to submit his counter-affidavits. In the preliminary investigation, what the
respondent is required to file is a counter-affidavit, not a comment. It is only when the
respondent fails to file a counter-affidavit may the investigating officer consider the
respondent's comment as the answer to the complaint. Against the foregoing backdrop,
there was a palpable non-observance by the Office of the Ombudsman of the fundamental
requirements of preliminary investigation.
Apparently, in the case at bar, the investigating officer considered the filing of petitioner's
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 comment as a substantial compliance with the requirements of a preliminary investigation.
Initially, Graft Investigator Manriquez directed the members of the Special Audit Team on 9
October 1991 to submit their affidavits relative to SAR No. 91-05. However, on 12
November 1991, before the affidavits were submitted, Manriquez required petitioners to
submit their respective comments on the complaint in the civil case and on Special Audit
Report (SAR) 91-05. Even when the required affidavits were filed by the audit team on 4
December 1991, petitioners were still not furnished copies thereof. The Ombudsman
contends that failure to provide petitioners the complaint-affidavits is immaterial since
petitioners were well aware of the existence of the civil complaint and SAR No. 91-05. We
find the Ombudsman's reasoning flawed. The civil complaint and the COA Special Audit
Report are not equivalent to the complaint-affidavits required by the rules. Moreover, long
before petitioners were directed to file their comments, the civil complaint (Civil Case No.
20,550-91) was rendered moot and academic and, accordingly, dismissed following the
mutual cancellation of the computerization contract. In SAR No. 91-05, on the other hand,
petitioners were merely advised to rescind the subject contract — which was
accomplished even before the audit report came out. In light of these circumstances, the
Court cannot blame petitioners for being unaware of the proceedings conducted against
them.
In Olivas vs. Office of the Ombudsman, 2 1 this Court, speaking through Justice Vicente V.
Mendoza, emphasized that it is mandatory requirement for the complainant to submit his
affidavit and those of his witnesses before the respondent can be compelled to submit his
counter-affidavits and other supporting documents. Thus:

Even in investigations looking to the prosecution of a party, Rule I, §3 can only

apply to the general criminal investigation, which in the case at bar was already
conducted by the PCGG. But after the Ombudsman and his deputies have
gathered evidence and their investigation has ceased to be a general exploratory
one and they decide to bring the action against a party, their proceedings become
adversary and Rule II §4(a) then applies. This means that before the respondent
can be required to submit counter-affidavits and other supporting documents, the
complaint must submit his affidavit and those of his witnesses. This is true not
only of prosecutions of graft cases under Rep. Act No. 3019 but also of actions
for the recovery of unexplained wealth under Rep. Act No. 1379, because §2 of
this latter law requires that before a petition is filed there must be a "previous
inquiry similar to preliminary investigation in criminal cases."

Indeed, since a preliminary investigation is designed to screen cases for trial, only
evidence may be considered. While reports and even raw information may justify
the initiation of an investigation, the stage of preliminary investigation can be
held only after sufficient evidence has been gathered and evaluated warranting
the eventual prosecution of the case in court. As this Court held in Cojuangco, Jr.
v. PCGG:
Although such a preliminary investigation is not a trial and is not intended
to usurp the function of the trial court, it is not a casual affair. The officer
conducting the same investigates or inquires into the facts concerning the
commission of the crime with the end in view of determining whether or
not an information may be prepared against the accused. Indeed, a
preliminary investigation is in effect a realistic judicial appraisal of the
merits of the case. Sufficient proof of the guilt of the accused must be
adduced so that when the case is tried, the trial court may not be bound as
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 a matter of law to order an acquittal. A preliminary investigation has then
been called a judicial inquiry. It is a judicial proceeding. An act becomes
judicial when there is opportunity to be heard and for the production and
weighing of evidence, and a decision is rendered thereof.

II
Compounding the deprivation of petitioners of their right to a preliminary investigation was
the undue and unreasonable delay in the termination of the irregularly conducted
preliminary investigation. Petitioners' manifestation adopting the comments of their co-
respondents was filed on 18 February 1992. However, it was only on 22 February 1996 or
four (4) years later, that petitioners received a memorandum dated 8 February 1996
submitted by Special Prosecutor Officer I Lemuel M. De Guzman recommending the filing
of information against them for violation of Sec. 3(g) of R.A. No. 3019 (Anti-Graft and
Corrupt Practices Act). The inordinate delay in the conduct of the "preliminary
investigation" infringed upon their constitutionally guaranteed right to a speedy disposition
of their case. 2 2 In Tatad vs. Sandiganbayan, 2 3 we held that an undue delay of close to
three (3) years in the termination of the preliminary investigation in the light of the
circumstances obtaining in that case warranted the dismissal of the case:
We find the long delay in the termination of the preliminary investigation by the
Tanodbayan in the instant case to be violative of the constitutional right of the
accused to due process. Substantial adherence to the requirements of the law
governing the conduct of preliminary investigation, including substantial
compliance with the time limitation prescribed by the law for the resolution of the
case by the prosecutor, is part of the procedural due process constitutionally
guaranteed by the fundamental law. Not only under the broad umbrella of the due
process clause, but under the constitutional guarantee of "speedy disposition" of
cases as embodied in Section 16 of the Bill of Rights (both in the 1973 and 1987
Constitution), the inordinate delay is violative of the petitioner's constitutional
rights. A delay of close to three (3) years can not be deemed reasonable or
justifiable in the light of the circumstances obtaining in the case at bar. We are
not impressed by the attempt of the Sandiganbayan to sanitize the long delay by
indulging in the speculative assumption that "the delay may be due to a
painstaking and grueling scrutiny by the Tanodbayan as to whether the evidence
presented during the preliminary investigation merited prosecution of a former
high-ranking government official." In the first place, such a statement suggests a
double standard of treatment, which must be emphatically rejected. Secondly,
three out of the five charges against the petitioner were for his alleged failure to
file his sworn statement of assets and liabilities required by Republic Act No.
3019, which certainly did not involve complicated legal and factual issues
necessitating such "painstaking and grueling scrutiny" as would justify a delay of
almost three years in terminating the preliminary investigation. The other two
charges relating to alleged bribery and alleged giving of unwarranted benefits to a
relative, while presenting more substantial legal and factual issues, certainly do
not warrant or justify the period of three years, which it took the Tanodbayan to
resolve the case.

It has been suggested that the long delay in terminating the preliminary
investigation should not be deemed fatal, for even the complete absence of a
preliminary investigation does not warrant dismissal of the information. True—
but the absence of a preliminary investigation can be corrected by giving the
accused such investigation. But an undue delay in the conduct of the preliminary
investigation can not be corrected, for until now, man has not yet invented a
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 device for setting back time.

In the recent case of Angchangco, Jr. vs. Ombudsman, 2 4 the Court upheld Angchangco's
right to the speedy disposition of his case. Angchangco was a sheriff in the Regional Trial
Court of Agusan del Norte and Butuan City. In 1990 criminal complaints were filed against
him which remained pending before the Ombudsman even after his retirement in 1994.
The Court thus ruled:
Here, the Office of the Ombudsman, due to its failure to resolve the criminal
charges against petitioner for more than six years, has transgressed on the
constitutional right of petitioner to due process and to a speedy disposition of the
cases against him, as well as the Ombudsman's own constitutional duty to act
promptly on complaints filed before it. For all these past 6 years, petitioner has
remained under a cloud, and since his retirement in September 1994, he has been
deprived of the fruits of his retirement after serving the government for over 42
years all because of the inaction of respondent Ombudsman. If we wait any
longer, it may be too late for petitioner to receive his retirement benefits, not to
speak of clearing his name. This is a case of plain injustice which calls for the
issuance of the writ prayed for. 2 5

We are not persuaded by the Ombudsman's argument that the Tatad ruling does not apply
to the present case which is not politically motivated unlike the former, pointing out the
following findings of the Court in the Tatad decision:
A painstaking review of the facts can not but leave the impression that political
motivations played a vital role in activating and propelling the prosecutorial
process in this case. Firstly, the complaint came to life, as it were, only after
petitioner Tatad had a falling out with President Marcos. Secondly, departing
from established procedures prescribed by law for preliminary investigation,
which require the submission of affidavits and counter-affidavits by the
complainant and the respondent and their witnesses, the Tanodbayan referred the
complaint to the Presidential Security Command for fact-finding investigation
and report.
We find such blatant departure from the established procedure as a dubious, but
revealing attempt to involve an office directly under the President in the
prosecutorial process, lending credence to the suspicion that the prosecution was
politically motivated. We cannot emphasize too strongly that prosecutors should
not allow, and should avoid, giving the impression that their noble office is being
used or prostituted, wittingly or unwittingly, for political ends, or other purposes
alien to, or subversive of, the basic and fundamental objective observing the
interest of justice evenhandedly, without fear or favor to any and all litigants alike
whether rich or poor, weak or strong, powerless or mighty. Only by strict
adherence to the established procedure may be public's perception of the
impartiality of the prosecutor be enhanced. 2 6

The Ombudsman endeavored to distinguish the present suit from the Angchangco case by
arguing that in the latter, Angchangco filed several motions for early resolution, implying
that in the case at bar petitioners were not as vigilant in asserting or protecting their rights.
We disagree. The constitutional right to speedy disposition of cases does not come into
play only when political considerations are involved. The Constitution makes no such
distinction. While political motivation in Tatad may have been a factor in the undue delay in
the termination of the preliminary investigation therein to justify the invocation of their
right to speedy disposition of cases, the particular facts of each case must be taken into
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 consideration in the grant of the relief sought. In the Tatad case, we are reminded:
In a number of cases, this Court has not hesitated to grant the so-called "radical
relief" and to spare the accused from undergoing the rigors and expense of a full-
blown trial where it is clear that he has been deprived of due process of law or
other constitutionally guaranteed rights. Of course, it goes without saying that in
the application of the doctrine enunciated in those cases, particular regard must
be taken of the facts and circumstances peculiar to its case. 2 7

In Alviso vs. Sandiganbayan, 2 8 the Court observed that the concept of speedy disposition
of cases "is a relative term and must necessarily be a flexible concept" and that the factors
that may be considered and balanced are the "length of the delay, the assertion or failure to
assert such right by the accused, and the prejudice caused by the delay."
Petitioners in this case, however, could not have urged the speedy resolution of their case
because they were completely unaware that the investigation against them was still on-
going. Peculiar to this case, we reiterate, is the fact that petitioners were merely asked to
comment, and not file counter-affidavits which is the proper procedure to follow in a
preliminary investigation. After giving their explanation and after four long years of being in
the dark, petitioners, naturally, had reason to assume that the charges against them had
already been dismissed.
On the other hand, the Office of the Ombudsman failed to present any plausible, special or
even novel reason which could justify the four-year delay in terminating its investigation. Its
excuse for the delay — the many layers of review that the case had to undergo and the
meticulous scrutiny it had to entail — has lost its novelty and is no longer appealing, as was
the invocation in the Tatad case. The incident before us does not involve complicated
factual and legal issues, specially in view of the fact that the subject computerization
contract had been mutually cancelled by the parties thereto even before the Anti-Graft
League filed its complaint.
The Office of the Ombudsman capitalizes on petitioners' three motions for extension of
time to file comment which it imputed for the delay. However, the delay was not caused by
the motions for extension. The delay occurred after petitioners filed their comment.
Between 1992 to 1996, petitioners were under no obligation to make any move because
there was no preliminary investigation within the contemplation of Section 4, Rule II of A.O.
No. 07 to speak of in the first place.
III
Finally, under the facts of the case, there is no basis in law or in fact to charge petitioners
for violation of Sec. 3(g) of R.A. No. 3019. To establish probable cause against the
offender for violation of Sec. 3(g), the following elements must be present: (1) the
offender is a public officer; (2) he entered into a contract or transaction in behalf of the
government; and (3) the contract or transaction is grossly and manifestly
disadvantageous to the government. The second element of the crime — that the accused
public officers entered into a contract in behalf of the government — is absent. The
computerization contract was rescinded on 6 May 1991 before SAR No. 91-05 came out
on 31 May 1991 and before the Anti-Graft League filed its complaint with the Ombudsman
on 1 August 1991. Hence, at that time the Anti-Graft League instituted their complaint and
the Ombudsman issued its Order on 12 November 1991, there was no longer any contract
to speak of. The contract, after 6 May 1991 became in contemplation of law, non-existent,
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 as if no contract was ever executed.
WHEREFORE, premises considered, the petition is GRANTED and Criminal Case No. 23193
is hereby DISMISSED. The temporary restraining order issued on 4 September 1997 is
made PERMANENT .
SO ORDERED. LLcd

Narvasa, C .J ., Romero and Purisima, JJ ., concur.

Footnotes

1. Rollo, p. 7.
2. Ibid.
3. Id., at 38-41.
4. Id., at 42.
5. Ibid.
6. Id., at 43-45.
7. Id., at 46-47.
8. Id., at 48-62.
9. Id., at 71-72.
10. Id., at 68.
11. Id., at 69.
12. Id., at 75.
13. Id., at 76.
14. Id., at 143.
15. Id., at 162-164.
16. Id., at 16.
17. A.O. No. 07, Rule II, Sec. 4(b.
18. Rodis, Sr. vs. Sandiganbayan, 166 SCRA 618 (1988); People vs. Poculan, 167 SCRA 155
(1988).

19. Tandoc vs. Resultan, 175 SCRA 37 (1989).

20. Doromal vs. Sandiganbayan, 177 SCRA 354 (1980); Go vs. Court of Appeals, 206 SCRA
138 (1992).

21. 239 SCRA 283 (1994).

22. Section 16, Article III of the 1987 Constitution mandates that:

All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.

23. 159 SCRA 70 (1988).

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 24. 268 SCRA 301 (1997).
25. Id., at 306.
26. See note 23 at 81.
27. Id., at 80.
28. 220 SCRA 55 (1993).

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