HLURB has no power to appoint a rehabilitation receiver

LEXBER, INC. VS. CAESAR M. AND CONCHITA B. DALMAN, G.R. No. 183587, April 20, 2015.

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The HLURB’s prior request for the appointment of a rehabilitation receiver is not a condition precedent before the trial court can give due course to a rehabilitation petition.

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Notably, the Securities and Exchange Commission’s (SEOs) jurisdiction over rehabilitation cases had already been transferred to the regional trial courts acting as commercial courts by virtue of Republic Act (RA) 8799⁠5 or the Securities Regulation Code.⁠6 The CA argues that despite this jurisdictional transfer, the substantive provisions of PD 902-A, particularly those powers which the SEC may exercise in rehabilitation cases, remain.

The CA is correct in this line of reasoning. However it erred in interpreting Section 6(c) to mean that no rehabilitation petition of a corporation that the HLURB regulates, can be heard unless a prior request of this agency for the appointment of a rehabilitation receiver was made.

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Under Section 30⁠7 of RA 7653⁠8, which had been retained under Section 69⁠9 of RA 8971,⁠10 the designation of a conservator or the appointment of a receiver for the rehabilitation of banks and quasi-banks, is vested exclusively with the Monetary Board. On the other hand, PD 61⁠11 specifically mandates the IC to designate the receiver of an insurance company in case of its insolvency or rehabilitation.⁠12 

Clearly, the respective charters of the BSP and the IC specifically authorize them to appoint a receiver in case a company under their regulation is undergoing corporate rehabilitation. Notably, this is not the case with the HLURB. Its enabling law does not grant it this particular power.

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