G.R. No. 160422. July 5, 2010.

*
MANILA ELECTRIC COMPANY (MERALCO), petitioner, vs. SPS. EDITO
and FELICIDAD CHUA, and JOSEFINA PAQUEO, respondents.
Public Utilities; Electricity; Anti-Electricity and Electric Transmission
Lines/Materials Pilferage Act of 1994 (R.A. No. 7832); The discovery of a tampered,
broken, or fake seal on the meter shall only constitute prima facie evidence of illegal
use of electricity by the person who benefits from the illegal use if such discovery is
personally witnessed and attested to by an officer of the law or a duly authorized
representative of the Energy Regulatory Board (ERB).—To reiterate, the discovery of
a tampered, broken, or fake seal on the meter shall only constitute prima
facie evidence of illegal use of electricity by the person who benefits from the illegal
use if such discovery is personally witnessed and attested to by an officer of the
law or a duly authorized representative of the Energy Regulatory Board (ERB). With
such prima facie evidence, MERALCO is within its rights to immediately disconnect
the electric service of the consumer after due notice. Section 1, Rule III of the Rules
and Regulations Implementing RA 7832 (IRR) defines an officer of the law as one
“who, by direct supervision of law or by election or by appointment by competent
authority, is charged with the maintenance of public order and the protection and
security of life and property, such as barangay captain, barangay chairman,
barangay councilman, barangay leader, officer or member of Barangay Community
Brigades, barangay policeman, PNP policeman, municipal councilor, municipal
mayor and provincial fiscal.”
Same; Same; Same; Administrative Law; The inclusion of the phrase “by the
consumer concerned” in the Implementing Rules and Regulations (IRR) is invalid
because it is in excess of what the law being implemented provides—as Republic Act
(RA) 7832 stands, only the presence of an authorized government agent, either an
officer of the law or an authorized representative of the Energy Regulatory Board
(ERB), during the Manila Electric Company (MERALCO) inspection would allow
any of the circumstances enumerated in Sec-
_______________

* THIRD DIVISION.
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8 SUPREME COURT REPORTS ANNOTATED
2
tion 4 of RA 7832 to be considered prima facie evidence of illegal use of electricity
by the benefited party; An administrative agency’s rule-making power is confined to
filling in the gaps and the necessary details in carrying into effect the law as
enacted—rule-making cannot extend, amend, or expand statutory requirements or
embrace matters not covered by the law being implemented.—Rule III, Section 1 of
the IRR provides: “In order to constitute prima facie evidence, the discovery of any of
the circumstances enumerated in Section 1 hereof, must be personally witnessed
and attested to by the consumer concerned or a duly authorized ERB representative
or any officer of the law, as the case may be.” We hold the view, however, that the
inclusion of the phrase “by the consumer concerned” in the IRR is invalid because it
is in excess of what the law being implemented provides. As RA 7832 stands, only
the presence of an authorized government agent, either an officer of the law or an
authorized representative of the ERB, during the MERALCO inspection would allow
any of the circumstances enumerated in Section 4 of RA 7832 to be considered prima
facie evidence of illegal use of electricity by the benefited party. The law does not
include the consumer or the consumer’s representative in this enumeration. In legal
contemplation, the ERB’s inclusion of the phrase “by the consumer concerned” in
Rule III, Section 1 of the IRR expanded the clear wording of the law and violated the
recognized principle that an administrative agency’s rule-making power is confined
to filling in the gaps and the necessary details in carrying into effect the law as
enacted; rule-making cannot extend, amend, or expand statutory requirements or
embrace matters not covered by the law being implemented. Administrative
regulations must always be in harmony with the provisions of the law because any
resulting discrepancy between the two will always be resolved in favor of the basic
law. In the present case, the consumer cannot in any way be considered to be in the
same classification as the named government representatives so that his or her
presence can be a substitute for the presence of these representatives.
Same; Same; Same; Words and Phrases; To be caught in flagrante delicto
necessarily implies positive identification by an eyewitness or eyewitnesses to the act
of tampering so that there is “direct evidence” of culpability, or “that which proves the
fact in dispute without the aid of any inference or presumption.”—In other words,
MERALCO is authorized to immediately disconnect the electric
83
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service of its consumers without the need of a court or administrative order
when: (a) the consumer, or someone acting in his behalf, is caught in flagrante
delicto in any of the acts enumerated in Section 4 of RA 7832; or (b) when any of the
circumstances constituting prima facie evidence of illegal use of electricity is
discovered for the second time. In flagrante delicto means “[i]n the very act of
committing the crime.” To be caught in flagrante delicto, therefore, necessarily
implies positive identification by an eyewitness or eyewitnesses to the act of
tampering so that there is “direct evidence” of culpability, or “that which proves the
fact in dispute without the aid of any inference or presumption.”
Same; Same; Same; Police Power; While electricity is property whose enjoyment,
as a general rule, the owner may extend or deny to others, electricity is not an
ordinary kind of property that a service provider may grant or withhold to consumers
at will—electricity is a basic necessity whose generation and distribution is imbued
with public interest, and its provider is a public utility subject to strict regulation by
the State in the exercise of police power; Under the circumstances, the Court cannot
but conclude that Manila Electric Company (MERALCO) abused its superior and
dominant position as well as the authority granted to it by law as a service provider
when it persisted in disconnecting the costumers’ electric service.—We have fully
discussed above why MERALCO was not in the position under RA 7832 to
immediately disconnect the Chuas’ electric service. We add that while electricity is
property whose enjoyment, as a general rule, the owner may extend or deny to
others, electricity is not an ordinary kind of property that a service provider may
grant or withhold to consumers at will. Electricity is a basic necessity whose
generation and distribution is imbued with public interest, and its provider is a
public utility subject to strict regulation by the State in the exercise of police power.
In view of the serious consequences resulting from immediate disconnection of
electric service, the law provides strict requisites that MERALCO must follow before
it can be granted authority to undertake instant disconnection of electric service due
to its consumers. In view of MERALCO’s dominance over its market and its
customers and the latter’s relatively weak bargaining position as against
MERALCO, and in view too of the serious consequences and hardships a customer
stands to suffer upon service disconnection, MERALCO’s failure to strictly observe
these legal requirements can be equated to the bad faith or abuse of right
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8 SUPREME COURT REPORTS ANNOTATED
4
that the law speaks of. Under the circumstances, we cannot but conclude that
MERALCO abused its superior and dominant position as well as the authority
granted to it by law as a service provider when it persisted in disconnecting the
Chuas’ electric service. Hence, the general prohibition against the issuance of a
restraining order or an injunction under Section 9 of RA 7832 cannot apply. Rather,
what must prevail is the exception: an injunction can issue when a disconnection has
been attended by bad faith or grave abuse of authority.
Same; Same; Same; Injunction; Mandatory Injunction; Requisites.—As to
whether the Chuas are entitled to a writ of mandatory injunction, we rule in the
affirmative. An injunctive writ issues only upon a showing that: a) the applicant
possesses a clear and unmistakable right; b) there is a material and substantial
invasion of such right; and c) there is urgent and permanent necessity for an
injunctive writ to prevent serious damage. In the present case, the Chuas have
established that they are paying MERALCO customers. In the absence of the prima
facie evidence required by Section 4 and by the requirements of Section 6 of RA 7832
that the Chuas tampered with their electric meter, and in light as well of the merits
of the Chuas’ case as discussed below, the Chuas have an unmistakable right to be
provided with continuous power supply—a right MERALCO obviously invaded when
it cut off the Chuas’ electric service. Electricity being what it is and has been in
modern day living, an urgent and permanent need exists to prevent MERALCO from
cutting off the Chuas’ electric service under the circumstances that gave rise to the
present dispute. Accordingly, we uphold the RTC and CA decisions ordering
MERALCO to immediately restore the Chuas’ electric service.
Same; Same; Same; Manila Electric Company (MERALCO) is duty bound to
explain to its customers the basis for arriving at any given billing, particularly in
cases of unregistered consumption—courts cannot and will not in any way blindly
grant a public utility’s claim for differential billing if there is no sufficient evidence to
prove entitlement.—MERALCO is duty bound to explain to its customers the basis
for arriving at any given billing, particularly in cases of unregistered consumptions.
Otherwise, consumers will stand piteously at the public utility’s mercy. Courts
cannot and will not in any way blindly grant a public utility’s claim for differential
billing if there is no sufficient evidence to prove entitlement. As MERALCO
85
, 85
has failed to substantiate its claim for the differential billing, we rule that the
Chuas cannot be held to account for the billed amount.
Same; Same; Same; Manila Electric Company (MERALCO) has the imperative
duty to make a reasonable and proper inspection of its apparatus and equipment to
ensure that they do not malfunction, and the due diligence to discover and repair
defects therein—failure to perform such duties constitutes negligence.—The
production and distribution of electricity is a highly technical business undertaking.
In conducting its operation, it is only logical for a public utility, such as MERALCO,
to employ mechanical devices and equipment for the orderly pursuit of its business.
MERALCO has the imperative duty to make a reasonable and proper inspection of
its apparatus and equipment to ensure that they do not malfunction, and the due
diligence to discover and repair defects therein. Failure to perform such duties
constitutes negligence.
Damages; Moral Damages; Requisites.—Article 32 of the Civil Code provides
that moral damages are proper when the rights of individuals, including the right
against deprivation of property without due process of law, are violated.
Jurisprudence has established the following requisites for the award of moral
damages: (1) there is an injury—whether physical, mental, or psychological—clearly
sustained by the claimant; (2) there is a culpable act or omission factually
established; (3) the wrongful act or omission of the defendant is the proximate cause
of the injury sustained by the claimant; and (4) the award of damages is predicated
on any of the cases stated in Article 2219 of the Civil Code. Considering the manner
MERALCO disconnected the Chuas’ electric service, we find the award of moral
damages proper. Apart from the havoc wreaked on the Chuas’ daily lives when
MERALCO abruptly and without legal basis cut off their electricity, the removal of
the electric meter also caused the Chuas extreme social humiliation and
embarrassment as they were subjected to speculations in their neighborhood of
being “power thieves.” As Mrs. Felicidad Chua testified, she suffered sleepless nights
and felt serious anxiety after the removal of their electric meter came to the
attention of the barangay. In fact, she even had to consult a doctor for this anxiety.
Thus, even if the Chuas did subsequently obtain their electricity from another
source, the damage to the Chuas’ reputation and social standing had already been
done.
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86 SUPREME COURT REPORTS ANNOTATED
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.

BRION, J.:

Manila Electric Company (MERALCO or petitioner) assails in this petition

for review on certiorari1 the decision of the Court of Appeals (CA or appellate
court), dated October 20, 2003,2 in CA-G.R. SP No. 77034, affirming with
modification the March 26, 2003 decision of the Regional Trial Court (RTC) of
Quezon City, Branch 82, in Civil Case No. Q-97-30503.3
The affirmed RTC decision ordered the petitioner to restore the electric
power connection of spouses Edito and Felicidad Chua (Chuas) at their
residence, and awarded P300,000.00 as moral damages. The CA affirmed the
restoration of electric power connection but reduced the awarded moral
damages to P100,000.00.

Background Facts
 The facts, as found by the RTC and affirmed by the CA, are summarized
below.
MERALCO is a utility company engaged in the business of sale and
distribution of electricity within its franchise area. The Chuas are the
beneficial users at their residence of electric service provided by MERALCO,
registered under the name of respondent Josefina Paqueo with Account
Number 05091-4038-14. MERALCO installed an electric meter with number
Co. No. 33 SPN 46170 in front of the Chuas’ home to
_______________

1 Under Rule 45 of the Rules of Court. Rollo, pp. 9-26.

2 Penned by Associate Justice B.A. Adefuin-De la Cruz, with the concurrence of Associate
Justices Buenaventura Guerrero and Eliezer De los Santos. id., at pp. 28-37.
3 Id., at pp. 66-77.
87
, 87
record the Chuas’ electric consumption. The meter was in a concrete post
outside the Chuas’ perimeter fence.4
From June 11, 1996 to September 11, 1996, the Chuas consumed between
231 to 269 kilowatt hours of electricity per month, with their corresponding
monthly electric bills ranging from P747.84 to P887.27. In October 1996, the
Chuas were surprised to receive an electricity bill for the amount of
P4,906.87 for the period of September 11 to October 11, 1996 (September 1996
bill). According to this bill, they consumed 1,297 kilowatt hours for this one
month period, or approximately 553% higher than their previous monthly
bill.5 Alarmed by the significant increase, Florence Chua (the Chuas’
daughter) went to the MERALCO office to question the bill. Florence paid the
bill under protest to avoid disconnection.
On October 31, 1996, MERALCO responded to the Chuas’ complaint by
sending a representative, Francisco Jose Albano, to their residence to inspect
the electric meter. Albano filed a Meter/Socket Inspection Report stating that
he replaced the old meter6 and installed a new one7 because the old meter’s
terminal seal was missing, the cover seal was broken, and the meter had a
broken sealing wire.8
The Chuas were billed based on the new meter and its readings from
October 11, 1996 to January 24, 1997, with an average usage ranging from
227 to 254 kilowatt hours, with corresponding monthly electric bills ranging
from P700.00 to P800.00.9
On January 3, 1997, the Chuas received a letter from MERALCO, stating
that:
_______________

4 Id., at p. 45.
5 Id.
6 Meter No. 33SPN46170.
7 Meter No. 33RZN80082.
8 Dated October 31, 1996; Rollo, p. 53.
 9 Id., at p. 54.
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88 SUPREME COURT REPORTS ANNOTATED
“Our Inspection Office has referred to us for appropriate action the
following finding(s) of our service inspectors and meter laboratory technicians
after your metering installation at the above address was inspected on
OCTOBER 31, 1996:
1. THE TERMINAL SEAL WAS MISSING.
2. THE SEALING WIRE OF THE ERB AND MERALCO LEAD COVER
SEALS WAS CUT.
3. THE 1000TH, 100TH AND 10TH DIAL POINTERS OF THE
REGISTER WERE OUT OF ALIGNMENT.
Given the above condition(s) and in accordance with the rules
implementing Republic Act 7832, you are billed the amount of
P183,983.66 (rate charge of P179,353.26 and energy tax of
P4,630.40). Furthermore, the company is now allowed to collect Surcharges
as a penalty for all Violation of Contract cases apprehended effective January
17, 1995, which would be collected later.
This is a formal demand upon you to pay the above stated amount at this
office within ten days from your receipt of this letter; if no settlement is made
within the given grace period, your service shall be disconnected and the
necessary criminal or civil action initiated against you for violation of
Republic Act 7832.”10
The Chuas refused to pay as demanded. On January 24, 1997, MERALCO
returned to their residence and removed Meter No. 33RZN80082, thereby
disconnecting their electric supply.
On February 5, 1997, MERALCO sent the Chuas another demand letter
stating that it had re-evaluated the Chuas’ case based on field findings and
the documents they furnished, and reduced the amount they had to pay from
P183,983.66 to P71,737.49.11
_______________

10 Id., at p. 55.
11 The letter said:
Dear Atty. Chua:
This refers to our Company’s claim for the value of unregistered consumption
amounting to P183,983.66.
89
, 89
On March 11, 1997, the Chuas filed a complaint for mandamus and
damages,12 praying that they be granted a preliminary mandatory injunction
to compel MERALCO to restore the electrical connection to their residence.
The Chuas also asked the court to award them moral and exemplary
damages, attorney’s fees, and litigation expenses.
After trial, the RTC rendered its decision, whose dispositive portion states:
 “WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against the defendant ordering the latter as
follows:
1.) To restore to plaintiffs at their residence at #9 Hukvet St., Area I,
Veterans Village, Quezon City their electric power connection and/or
services;
2.) To pay the plaintiffs the sum of P300,000.00 as and by way of moral
damages;
3.) To pay the plaintiffs the sum of P30,000.00 as and by way of
attorney’s fees;
4.) To pay the cost of suit.
_______________

Please be informed that we have re-evaluated your case base on our field findings and
the documents you have furnished. Thus, reducing the aforementioned amount to
P71,737.49 (Rate Charge—P71,203.19 and Energy Tax—P184.30). In the interest of speedy
disposition of the case, we are instructed to collect the recomputed amount and act
accordingly, Moreso, we shall also require you to register the service under your name and
pay the deposit amounting to P5,410.00, representing the meter and service deposit. This
amount can be refunded upon termination of your service.
In view thereof, please consider this letter as our FINAL DEMAND and settle the
aforesaid amount; otherwise, much to our regret, we shall refer the matter to our legal for
legal sanction.
RTC Records, p. 14.
12 Rollo, pp. 44-51.
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90 SUPREME COURT REPORTS ANNOTATED
SO ORDERED.”13
MERALCO appealed the trial court’s decision to the CA.
The CA affirmed the RTC decision.14 The appellate court confirmed that
the meter had been tampered, but found that the tampering was mitigated by
the Chuas’ voluntary act of going to MERALCO to report the possible defect
in their meter. The voluntary act, according to the court, constituted good
faith as MERALCO would not have discovered the defects in the meter if the
Chuas had not reported the matter.
The appellate court also noted that while Section 6 of Republic Act No.
7832 (RA 7832), or the “Anti-Electricity and Electric Transmission
Lines/Materials Pilferage Act of 1994,” allows MERALCO to immediately
disconnect electric service, it may only do so when the owner of the house has
either been caught in flagrante delicto in any of the acts constituting prima
facie evidence of illegal use, or has been discovered a second time in any of
the enumerated circumstances. In the Chuas’ case, they were not caught in
flagrante delicto as they in fact reported the defect in their meter. This was
the first instance, too, that MERALCO had discovered any tampering in the
Chuas’ meter. Under these circumstances, the appellate court concluded that
MERALCO had no legal right to disconnect the Chuas’ electrical service.
 While upholding the RTC’s factual findings, the CA modified the RTC
decision by reducing the awarded moral damages from P300,000.00 to
P100,000.00.
The Petition
MERALCO filed the present petition, raising the following arguments:1591
, 91
I. The CA erred in ruling that MERALCO had no right to disconnect the
electric service of the Chuas.
II. MERALCO is entitled to collect the differential billing of P183,983.66.
III. Even assuming that MERALCO had no right to disconnect the
Chuas’ electric service, they are nevertheless not entitled to moral
damages in the absence of evidence of damages they sustained.

MERALCO points out that it did not immediately disconnect electric

service to the Chuas. It first sent several demand letters explaining the meter
tampering and demanding payment for the billed differential in the sum of
P183,983.66. It was only after the Chuas refused to pay the differential
billing that MERALCO disconnected their electric service.
Additionally, MERALCO contends that based on Section 9 of RA 7832, no
writs of injunction shall be issued by any court against any private electric
utility exercising its right and authority to disconnect electric service unless
there is prima facie evidence that the disconnection was made with evident
bad faith or grave abuse of authority. Since the Chuas failed to prove
MERALCO’s evident bad faith in disconnecting their electric service, they are
not entitled to an injunctive writ.
MERALCO further posits that the deliberate manipulation of the dial
pointers prevented the full and correct billing of the electric energy actually
delivered to and consumed by the Chuas. The differential billing represents
the monetary equivalent of the electricity used by the Chuas but not
registered by the meter.
Lastly, MERALCO maintains that even if it had no right to disconnect the
Chuas’ electric service, the Chuas nevertheless are not entitled to moral
damages. The Chuas did not sustain damages after the disconnection since
they sourced their electric supply from another electric meter within the
premises.
_______________

13 Dated March 26, 2003; id., at pp. 76-77.

14 Dated October 20, 2003; supra note 2.
15 Supra note 1.
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The Court’s Ruling

We deny the petition for lack of merit.

Prima facie evidence of
illegal use of electricity
MERALCO claims that the meter tampering in this case stands
undisputed in the evidence on record. Under RA 7832, the law presumes that
the person benefited by the unlawful use of electricity is the perpetrator of
the meter tampering. Thus, no need arose for MERALCO to prove that the
Chuas actually tampered with their meter; pursuant to Section 4 of RA 7832,
Meralco had the right to immediately disconnect the Chuas’ electric service.
We find MERALCO’s position legally incorrect. Essential to the
resolution of this issue is Section 4 of RA 7832, which reads:
“SEC. 4. Prima Facie Evidence.—
(a) The presence of any of the following circumstances shall
constitute prima facie evidence of illegal use of electricity, as
defined in this Act, by the person benefited thereby, and shall be the basis
for: (1) the immediate disconnection by the electric utility to such
person after due notice, x x x
(iv) The presence of a tampered, broken, or fake seal on the meter, or
mutilated, altered, or tampered meter recording chart or graph or
computerized chart, graph, or log.
xxx
(viii) x x x Provided, however, That the discovery of any of the
foregoing circumstances, in order to constitute prima
facie evidence, must be personally witnessed and attested to by an
officer of the law or a duly authorized representative of the
Energy Regulatory Board (ERB).
93
, 93

To reiterate, the discovery of a tampered, broken, or fake seal on the meter

shall only constitute prima facie evidence of illegal use of electricity by the
person who benefits from the illegal use if such discovery is personally
witnessed and attested to by an officer of the law or a duly
authorized representative of the Energy Regulatory Board (ERB).
With such prima facie evidence, MERALCO is within its rights to
immediately disconnect the electric service of the consumer after due notice.
Section 1, Rule III of the Rules and Regulations Implementing RA 7832
(IRR) defines an officer of the law as one “who, by direct supervision of law or
by election or by appointment by competent authority, is charged with the
maintenance of public order and the protection and security of life and
property, such as barangay captain, barangay chairman, barangay
councilman, barangay leader, officer or member of Barangay Community
Brigades, barangay policeman, PNP policeman, municipal councilor,
municipal mayor and provincial fiscal.”
 The importance of having an authorized government representative
present during an inspection was highlighted during the Senate deliberations
on RA 7832 when Senator John H. Osmeña, the law’s author, explained:
“Mr. President, if a utility like MERALCO finds certain circumstances or
situations which are listed in Section 2 of this bill to be prima facie evidence, I
think they should be prudent enough to bring in competent authority,
either the police or the NBI, to verify or substantiate their finding. If they
were to summarily proceed to disconnect on the basis of their findings and later on
there would be a court case and the customer or the user would deny the existence of
what is listed in Section 2, then they could be in a lot of trouble.”16
_______________

16 Record of the Senate, Vol. IV, No. 61, March 9, 1994, p. 357.
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94 SUPREME COURT REPORTS ANNOTATED
We emphasized the significance of this requirement in Sps. Quisumbing v.
MERALCO,17 when we said:
“The presence of government agents who may authorize immediate
disconnections go into the essence of due process. Indeed, we cannot allow
respondent to act virtually as prosecutor and judge in imposing the penalty of
disconnection due to alleged meter tampering. That would not sit well in a
democratic country. After all, Meralco is a monopoly that derives its power from the
government. Clothing it with unilateral authority to disconnect would be equivalent
to giving it a license to tyrannize its hapless customers.”18
After thoroughly examining the records of this case, we find no proof that
MERALCO ever complied with the required presence of an “officer of the
law.” In his testimony, Albano never mentioned that he was accompanied by
an authorized government representative during the inspection. As evident
from the Meter/Socket Inspection Report, only Albano inspected the Chuas’
electric meter; no evidence shows that he was accompanied by anyone else.
Most telling of all, MERALCO does not even allege in its submissions with
this Court that an ERB representative or an officer of the law ever
accompanied its representative during the inspection of the Chuas’ electric
meter.
We note, too, that while MERALCO claimed in its Answer that an ERB
representative was present and witnessed the testing of the Chuas’ electric
meter at the MERALCO laboratory,19 it never once identified this ERB
representative. MERALCO did not allege in either the present petition or in
the Memorandum it filed with this Court that an ERB representative
witnessed the laboratory testing of the Chuas’ electric meter. The Meter
Verification Report,20 the document that
_______________

17 429 Phil. 727; 380 SCRA 195 (2002).

18 Id., at pp. 744-745; p.208.
19 Rollo, p. 62.
20 RTC Records, pp. 58-59.
95
 , 95
contains the results of the laboratory testing, was also not signed by either an
ERB representative or by any officer of the law.
For lack of any evidence showing that a government representative
personally witnessed and attested to the discovery of the Chuas’ tampered
electric meter, no supporting prima facie evidence can be invoked for the
immediate disconnection of the Chuas’ electric service pursuant to Section 4
of RA 7832.
Consumer not the proper
witness to inspection
Rule III, Section 1 of the IRR provides: “In order to constitute prima
facie evidence, the discovery of any of the circumstances enumerated in
Section 1 hereof, must be personally witnessed and attested to by the
consumer concerned or a duly authorized ERB representative or any
officer of the law, as the case may be.”
We hold the view, however, that the inclusion of the phrase “by the
consumer concerned” in the IRR is invalid because it is in excess of
what the law being implemented provides. As RA 7832 stands, only the
presence of an authorized government agent, either an officer of the law or an
authorized representative of the ERB, during the MERALCO inspection
would allow any of the circumstances enumerated in Section 4 of RA 7832 to
be considered prima facie evidence of illegal use of electricity by the benefited
party. The law does not include the consumer or the consumer’s
representative in this enumeration.
In legal contemplation, the ERB’s inclusion of the phrase “by the consumer
concerned” in Rule III, Section 1 of the IRR expanded the clear wording
of the law and violated the recognized principle that an administrative
agency’s rule-making power is confined to filling in the gaps and the
necessary details in carrying into effect the law as enacted; rule-
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96 SUPREME COURT REPORTS ANNOTATED
making cannot extend, amend, or expand statutory requirements or embrace
matters not covered by the law being implemented. Administrative
regulations must always be in harmony with the provisions of the law
because any resulting discrepancy between the two will always be resolved in
favor of the basic law.21 In the present case, the consumer cannot in any way
be considered to be in the same classification as the named government
representatives so that his or her presence can be a substitute for the
presence of these representatives.
For this reason, even if Florence Chua, the Chuas’ daughter,
acknowledged that she witnessed Albano’s examination of the electric meter
outside their house so that she signed the Meter/Socket Inspection Report,
her presence did not characterize the discovered broken meter seal as prima
facie evidence of illegal use of electricity justifying immediate disconnection.
Legal requirements for authority
to disconnect electricity
Section 6 of RA 7832 provides another mandatory requirement before
MERALCO can immediately disconnect a consumer’s electric service. The
provision reads:
“SEC. 6. Disconnection of Electric Service.—The private electric utility or
rural electric cooperative concerned shall have the right and authority to disconnect
immediately the electric service after serving the written notice or warning to the
effect, without the need of a court or administrative order, and deny restoration of
the same, when the owner of the house or establishment concerned or
someone acting in his behalf shall have been caught en flagrante
delicto doing any of the acts enumerated in section 4 (a) hereof, or when any
of the circumstances so enumerated shall have been discovered for the second
time: Pro-
_______________

21 Landbank of the Philippines v. Court of Appeals, 327 Phil. 1047, 1052; 258 SCRA 404, 407
(1996).
97
, 97
vided, That in the second case, a written notice or warning shall have been issued
upon the first discovery: Provided, further, That the electric service shall not be
immediately disconnected or shall be immediately restored upon the deposit of the
amount representing the differential billing by the person denied the service, with
the private electric utility or the rural cooperative concerned or with the competent
court as the case may be: Provided, furthermore, That if the court finds that illegal
use of electricity has not been committed by the same person, the amount deposited
shall be credited against future billings, with legal interest thereon chargeable
against the private utility or rural electric cooperative, and the utility or cooperative
shall be made to immediately pay such person double the value of the payment or
deposit with legal interest, which amount shall likewise be creditable against
immediate future billings, without prejudice to any criminal, civil or administrative
action that such person may be entitled to file under existing laws, rules and
regulations: Provided, finally, That if the court finds the same person guilty of such
illegal use of electricity, he shall, upon final judgment, be made to pay the electric
utility or the rural electric cooperative concerned double the value of the estimated
electricity illegally used which is referred to in this section as differential billing.”
In other words, MERALCO is authorized to immediately disconnect the
electric service of its consumers without the need of a court or administrative
order when: (a) the consumer, or someone acting in his behalf, is caught in
flagrante delicto in any of the acts enumerated in Section 4 of RA 7832; or (b)
when any of the circumstances constituting prima facie evidence of illegal use
of electricity is discovered for the second time.
In flagrante delicto means “[i]n the very act of committing the crime.”22 To
be caught in flagrante delicto, therefore, necessarily implies positive
identification by an eyewitness or eyewitnesses to the act of tampering so that
there is “direct evidence” of culpability, or “that which proves the fact in dis-
_______________
 22 People v. Fronda, 384 Phil. 732; 328 SCRA 185 (2000), citing Black’s Law Dictionary, 575
(5th ed., 1979).
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98 SUPREME COURT REPORTS ANNOTATED
pute without the aid of any inference or presumption.”23
In the present case, however, MERALCO presented no proof that it ever
caught the Chuas, or anyone acting in the Chuas’ behalf, in the act of
tampering with their electric meter. As correctly observed by the CA, the
Chuas could not have been caught in flagrante delicto committing the
tampering since in the first place, they were the ones who reported the defect
in their meter. Moreover, the presence of a broken cover seal, broken sealing
wire, and a missing terminal seal, is not enough to declare the Chuas in
flagrante delicto tampering with the electric meter. As the basic complaint
for mandamus alleged, without any serious refutation from the petitioner,
the electric meter is in a concrete post outside of the Chuas’ perimeter fence;
hence, in a location accessible to the public. We note, too, that MERALCO did
not present any evidence that it caught the Chuas committing any of the acts
constituting prima facie evidence of illegal use of electricity for the second
time.
In view of MERALCO’s failure to comply with both Section 4 and Section 6
of RA 7832, MERALCO obviously had no authority to immediately disconnect
the Chuas’ electric service.
Writ of Mandatory Injunction
On the validity of the injunctive writ the lower court issued in the Chuas’
favor, MERALCO submits that the Chuas were not entitled to an injunctive
writ since it had a right, under the law, to automatically disconnect the
latter’s electric service. Furthermore, Section 9 of RA 7832 prohibits courts
from issuing injunctions or restraining orders against electric utilities from
disconnecting service unless the consumer proves that the electric utility
acted with evident bad faith in disconnecting the electric service. This cited
provision states:
_______________

23 Go v. Leyte II Electric Cooperative, Inc., 546 SCRA 187, 195 (2008).

99
, 99
“Section 9. Restriction on the Issuance of Restraining Orders or Writs of
Injunction.—No writ of injunction or restraining order shall be issued by any court
against any private electric utility or rural electric cooperative exercising the right
and authority to disconnect electric service as provided in this Act, unless there
is prima facie evidence that the disconnection was made with evident bad faith or
grave abuse of authority.”
We have fully discussed above why MERALCO was not in the position
under RA 7832 to immediately disconnect the Chuas’ electric service. We add
that while electricity is property24 whose enjoyment, as a general rule, the
owner may extend or deny to others,25 electricity is not an ordinary kind of
property that a service provider may grant or withhold to consumers at will.
Electricity is a basic necessity whose generation and distribution is imbued
with public interest, and its provider is a public utility subject to strict
regulation by the State in the exercise of police power.26 In view of the serious
consequences resulting from immediate disconnection of electric service, the
law provides strict requisites that MERALCO must follow before it can be
granted authority to undertake instant disconnection of electric service due to
its consumers. In view of MERALCO’s dominance over its market and its
customers and the latter’s relatively weak bargaining position as against
MERALCO, and in view too of the serious consequences and hardships a
customer stands to suffer upon service disconnection, MERALCO’s failure to
_______________

2424 United States v. Carlos, 21 Phil. 553, 560 (1911).

25 Article 429 of the Civil Code provides:
The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be
reasonable to repel or prevent an actual or threatened unlawful physical invasion or
usurpation of his property.
26 Republic v. Manila Electric Company, 440 Phil. 389; 391 SCRA 700 (2002).
100
100 SUPREME COURT REPORTS ANNOTATED
strictly observe these legal requirements can be equated to the bad faith or
abuse of right27 that the law speaks of.
Under the circumstances, we cannot but conclude that MERALCO abused
its superior and dominant position as well as the authority granted to it by
law as a service provider when it persisted in disconnecting the Chuas’
electric service. Hence, the general prohibition against the issuance of a
restraining order or an injunction under Section 9 of RA 7832 cannot apply.
Rather, what must prevail is the exception: an injunction can issue when a
disconnection has been attended by bad faith or grave abuse of authority.
As to whether the Chuas are entitled to a writ of mandatory injunction, we
rule in the affirmative. An injunctive writ issues only upon a showing that: a)
the applicant possesses a clear and unmistakable right; b) there is a material
and substantial invasion of such right; and c) there is urgent and permanent
necessity for an injunctive writ to prevent serious damage.28
In the present case, the Chuas have established that they are paying
MERALCO customers. In the absence of the prima facie evidence required by
Section 4 and by the requirements of Section 6 of RA 7832 that the Chuas
tampered with their electric meter, and in light as well of the merits of the
Chuas’ case as discussed below, the Chuas have an unmistakable right to be
provided with continuous power supply—a right MERALCO obviously
invaded when it cut off the Chuas’ electric service. Electricity being what it is
and has been in modern day living, an urgent and permanent need exists to
pre-
_______________
 27 Samar II Electric Cooperative, Inc. v. Quijano, G.R. No. 144474, April 27, 2007, 522 SCRA
364, 376, citing Manila Electric Company v. Hon. Lorna Navarro-Domingo, G.R. No. 161893, June
27, 2006, 493 SCRA 363.
28 Manila Electric Company v. Jose, G.R. No. 152769, February 14, 2007, 515 SCRA 669, 675,
citing Bank of the Philippine Islands v. Court of Appeals, G.R. No. 142731, June 8, 2006, 490
SCRA 168, 175.
101
, 101
vent MERALCO from cutting off the Chuas’ electric service under the
circumstances that gave rise to the present dispute. Accordingly, we uphold
the RTC and CA decisions ordering MERALCO to immediately restore the
Chuas’ electric service.
Differential billing
MERALCO further asserts that the Chuas should be made to pay the
differential billing for the electricity that they actually consumed but which
was not reflected on their electric bills due to the tampered electric meter.
Since the prima facie presumption afforded by Section 4 of RA 7832 does not
apply, it falls upon MERALCO to first prove that the Chuas actually
manipulated the dial pointers on their meter before it can hold them
accountable for the differential billing. The circumstances discussed below,
however, cast serious doubt on the allegation and assumption that the Chuas
ever tampered with their electric meter.
First, we stress once again that the Chuas themselves requested
MERALCO to inspect their meter for possible defects after they received their
unusually high September 1996 bill; the Chuas themselves were
instrumental in discovering the tampered condition of their electric meter.
Had the Chuas been guilty of tampering as MERALCO assumed, they would
not have drawn attention to themselves by reporting the problem with their
meter; as the beneficial users of the electric service, they would have been
MERALCO’s main suspects once the tampering came to light. We thus find it
highly illogical for the Chuas to be guilty of actual tampering given their
actions on record on the discovery of the tampered condition of their meter.
Second, we observe that based on the Chuas’ billing record, no
discernable difference exists between the Chuas’ electric bills before
and after MERALCO had replaced their tampered meter. The Chuas
consumed between 231 to 269 kilowatt hours of electricity per month from
June 11, 1996 to September 11, 1996, with their corresponding
102
102 SUPREME COURT REPORTS ANNOTATED
monthly electric bills ranging from P747.84 to P887.27. (Their long-term
usage record is further reflected in the appropriate footnoted table below.)
The following usage record is undisputed after MERALCO installed a new
meter to replace the tampered one.
Date Kilowatt hours Amount Paid (pesos)
October 1996 1,297 4,906.87
November 227 781.86
 December 228 806.19
January 1997 254 898.89
January 24, 1997 96 331.04
Tampering with the electric meter is committed by the consumer to
prevent the meter from registering the correct amount of electric consumed;
thus, while using the same regular power supply, they are billed for less than
what they actually consumed. Tampering affects only the registered usage as
reflected in the electric meter, not the amount of electricity actually used,
assuming a more or less uniform monthly usage of electricity.29 Stated
otherwise, when an electric meter is tampered, the recorded consumption is
less than the electricity actually used. Consequently, when a tampered
electric meter is replaced, assuming the same amount of monthly
rate of usage, the new electric meter will register the increased use
of electricity that had previously been concealed by the tampered
meter.30
_______________

29 MERALCO v. Wilcon Builders Supply, Inc., G.R. No. 171534, June 30, 2008, 556 SCRA
742, 753-754, citing MERALCO v. T.E.A.M. Electronics Corporation, G.R. No. 131723, December
13, 2007, 540 SCRA 62.
30 Id., at p. 754.
103
, 103
If the Chuas had truly tampered with their electric meter, it stands to
reason that after MERALCO replaced the tampered electric meter with a
new one, the Chuas’ electric bills would have gone up to reflect the electricity
they were actually consuming. That the Chuas’ monthly electric
consumption remained virtually unchanged even after the defective
electric meter had been replaced strongly disproves the contentions
that the Chuas tampered with their electric meter and that the
Chuas’ electric meter registered less than the electricity they had
actually “consumed.” Given the surrounding circumstance, the sequence of
events, and the electric meter readings, i.e., the exposed location of the
Chuas’ electric meter, the long-term consumption record shown below, the
unusual upward spike of the meter reading in September 1996, the
inspection and the replacement by a new electric meter, and the continued
readings consistent with the readings prior to the September 1996 spike, it
would not be surprising if the tampering of the seals came immediately
before September 1996 and were made by parties other than the Chuas for
their own reasons. To be sure, the Chuas would not have tampered with their
own meter to increase their meter reading.
Aside from the doubtful veracity of the allegation and assumption that the
Chuas tampered with their meter, we also consider that MERALCO did not
provide any factual or legal basis for its differential billing. Section 6 of RA
7832 supplies the manner by which a public utility can compute the
differential billing.
“SEC. 6. Disconnection of Electric Service.—x x x
For purposes of this Act, “differential billing” shall refer to the amount to be
charged to the person concerned for the unbilled electricity illegally consumed by
him as determined through the use of methodologies which utilize, among other, as
basis for determining the amount of monthly electric consumption in kilowatt-hours
to be billed either: (a) the highest recorded monthly consumption within the
five-year billing period preceding the time of the
104
104 SUPREME COURT REPORTS ANNOTATED
discovery, (b) the estimated monthly consumption as per the report of load
inspection conducted during the time of the discovery, (c) the higher consumption
between the average consumption before or after the highest drastic drop in
consumption within the five year billing period preceding the discovery, (d) the
highest recorded monthly consumption within four (4) months after the time of
discovery, or (e) the result of the ERB test during the time of discovery and, as basis
for determining the period to be recovered by the differential billing, either:
(1) the time when the electric service of the person concerned recorded an abrupt or
abnormal drop in consumption, or (2) when there was change in his service
connection such as a change in his service connection such as a change of meter,
change of seal or reconnection, or in the absence thereof, a maximum of sixty (60)
billing months, up to the time of discovery: Provided, however, That such period
shall, in no case, be less than one (1) year preceding the date of discovery of the
illegal use of electricity.”

According to MERALCO’s witness, Enrique Katipunan, the period affected

by the Chuas’ tampered electric meter was from August 17, 1992 to October
11, 1996 (affected period).31 In line with the fundamental rule that the burden
of evidence lies with the person who asserts the affirmative
allegation,32 MERALCO thus carried the burden to prove that the Chuas’
electric meter had been tampered with as early as August 17, 1992.
Significantly, while Katipunan stated that he “studied the Chuas’ billing
history to establish the affected period from August 17, 1992 to October 11,
1996,”33 we find conspicuously absent from his testimony any
statement explaining how he established this four-year period as the
period affected by the tampered electric meter.
_______________

31 TSN, November 15, 2001, pp. 8-9.

32 Aklan Electric Cooperative, Inc. v. National Labor Relations Commission, 380 Phil. 225,
245; 323 SCRA 258, 278 (2000); Philippine Fruit & Vegetable Industries, Inc. v. National Labor
Relations Commission, 369 Phil. 929, 938; 310 SCRA 673, 682 (1999).
33 Supra note 31, p. 8.
105
, 105
Katipunan did not mention any abrupt or abnormal drop in the Chuas’
electric consumption, nor did he identify anything suspicious in the Chuas’
billing history that would lead him to conclude that the tampering began on
August 17, 1992. All we have to rely on is Katipunan’s assurance that the
Chuas’ electric meter existed in a tampered state for this whole four-year
period. This testimony, however, is uncorroborated by evidence.
We are not unaware that MERALCO used the Chuas’ September 1996 bill
to compute the differential billing—the same bill that the Chuas protested
with Meralco for being extraordinarily high. While Section 6 of RA 7832 does
allow MERALCO to use the consumer’s highest recorded monthly
consumption as the basis to compute the differential billing, still, Meralco—
after examining the Chuas’ records for the past four years34—should have
noticed that the September 1996 bill
_______________

34 According to MERALCO’s Computation Worksheet, the Chuas had the following billing
record for the affected period:
Date Kilowatt hours Amount Paid
(Pesos)
September 1992 189 473.96
October 215 547.50
November 232 605.90
December 188 477.74
January 1993 183 464.60
February 196 509.31
March 183 470.03
April 197 511.62
May 200 557.11
June 233 664.51
July 229 651.98
August 174 482.52
September 181 507.44
October 241 703.54
November 255 751.52
December 187 527.55
January 1994 249 728.65
February 223 684.42
March 187 559.47
106
106 SUPREME COURT REPORTS ANNOTATED

was truly unusual. As seen from their billing history, while the Chuas
consistently consumed no more than 300 kilowatt hours of electricity every
month for the past four years, in their September bill, their usage
dramatically spiked to 1,297 kilowatt hours, or a difference of more than
400%. Even more telling is that after MERALCO replaced the alleged
tampered electric meter, the Chuas continued to consume the same
amount of electricity they had consumed prior to the September
1996 bill.
_______________
April 218 666.16
May 224 686.80
June 240 750.68
July 213 656.41
August 231 717.46
September 256 806.03
October 240 742.22
November 244 750.58
December 251 768.61
January 1995 277 855.29
February 210 629.26
March 220 669.39
April 244 769.68
May 248 767.34
June 284 887.43
July 240 733.21
August 259 812.15
September 298 922.09
October 261 789.76
November 278 855.17
December 266 812.92
January 1996 296 931.59
February 293 908.65
March 157 462.62
April 236 769.58
May 286 956.09
June 281 925.72
July 231 747.84
August 269 887.27
September 250 820.59
October 1,297 4,812.47
RTC Records, pp. 61-63.
107
, 107
Given the strange circumstances surrounding the September 1996 bill,
MERALCO should have exercised prudence and employed another method to
compute the Chuas’ differential billing, such as using the estimated monthly
consumption based on a load inspection report. At the very least, MERALCO
should have exerted efforts to investigate the Chuas’ complaint regarding the
sudden increase in their electric bill, especially considering the Chuas’ claim
that they had not done anything new or used any additional appliances
during the period covered by the September 1996 bill.35 We find it significant
that nothing in the record suggests that MERALCO even attempted to study,
or even tried to explain, the sudden surge in the Chuas’ September 1996 bill.
 We highlight another important point to consider—that MERALCO sent
the Chuas another letter dated February 5, 1997, where it reduced the
Chuas’ differential billing from P183,983.66 to P71,737.49.36 While
MERALCO admitted the existence of this letter in the proceedings before the
lower courts, it chose to ignore the existence of this February 5, 1997
letter in its submissions with this Court; instead, in the Petition and
Memorandum it filed with this Court, MERALCO reverted to its demand
that the Chuas pay the original differential billing of P183,983.66. This
unexplained and inconsistent MERALCO posture further strengthens our
doubts on to the legitimacy and correctness of the Chuas’ differential billing.
MERALCO is duty bound to explain to its customers the basis for arriving
at any given billing, particularly in cases of unregistered consumptions.
Otherwise, consumers will stand piteously at the public utility’s
mercy.37 Courts cannot and will not in any way blindly grant a public utility’s
claim for
_______________

35 Rollo, pp. 45-46.

36 Supra note 11.
37 MERALCO v. Macro Textile Mills Corporation, 424 Phil. 811, 828; 374 SCRA 69, 85 (2002).
108
108 SUPREME COURT REPORTS ANNOTATED
differential billing if there is no sufficient evidence to prove entitlement. 38 As
MERALCO has failed to substantiate its claim for the differential billing, we
rule that the Chuas cannot be held to account for the billed amount.
MERALCO guilty of inexcusable negligence
Apart from lacking factual or legal basis, another reason for us not to hold
the Chuas accountable for MERALCO’s differential billing is our previous
ruling in Ridjo Tape & Chemical Corp. v. CA,39 where we said:
“It has been held that notice of a defect need not be direct and express; it is
enough that the same had existed for such a length of time that it is
reasonable to presume that it had been detected, and the presence of a
conspicuous defect which has existed for a considerable length of time will
create a presumption of constructive notice thereof. Hence, MERALCO’s
failure to discover the defect, if any, considering the length of time,
amounts to inexcusable negligence. Furthermore, we need not belabor the point
that as a public utility, MERALCO has the obligation to discharge its functions with
utmost care and diligence.
Accordingly, we are left with no recourse but to conclude that this is a case of
negligence on the part of MERALCO for which it must bear the consequences. Its
failure to make the necessary repairs and replacement of the defective electric meter
installed within the premises of petitioners was obviously the proximate cause of the
instant dispute between the parties.
Indeed, if an unusual electric consumption was not reflected in the statements of
account of petitioners, MERALCO, considering its technical knowledge and vast
experience in providing electric service, could have easily verified any possible error
in the meter reading. In the absence of such a mistake, the electric meters
themselves
_______________

38 MERALCO v. Wilcon Builders Supply, Inc., supra note 29, pp. 756-757.
39 350 Phil. 184; 286 SCRA 544 (1998).
109
, 109
should be inspected for possible defects or breakdowns and forthwith repaired and, if
necessary, replaced. x x x
The rationale behind this ruling is that public utilities should be put on
notice, as a deterrent, that if they completely disregard their duty of
keeping their electric meters in serviceable condition, they run the risk of
forfeiting, by reason of their negligence, amounts originally due from their
customers. Certainly, we cannot sanction a situation wherein the defects in the
electric meter are allowed to continue indefinitely until suddenly the public utilities
concerned demand payment for the unrecorded electricity utilized when, in the first
place, they should have remedied the situation immediately. If we turn a blind eye
on MERALCO’s omission, it may encourage negligence on the part of public utilities,
to the detriment of the consuming public.”40
While Ridjo involved a defective meter, we have, on occasion, applied this
same doctrine to cases that involved allegations of meter tampering. In
both Manila Electric Company v. Macro Textile Mills, Corp.41 and Davao
Light & Power Co., Inc. v. Opena,42 we faulted the electric companies involved
for not immediately inspecting the electric meters after they noted a sudden
drop in the consumer’s registered electric consumption. Since, in both cases,
the public utility companies allowed several years to lapse before deciding to
conduct an inspection of the electric meters, we ruled that they were both
negligent and consequently barred them from collecting their claims of
differential billing against the consumers.
With these rulings in mind, we held in MERALCO v. Wilcon Builders
Supply, Inc.43 that the use of the words “defect” and “defective” in Ridjo does
not restrict the inexcusable negligence doctrine to cases of “mechanical
defects” in installed electric meters. We said:
_______________

40 Id., at pp. 194-195; pp. 552-554.

41 424 Phil. 811; 374 SCRA 69 (2002).
42 G.R. No. 129807, December 9, 2005, 477 SCRA 58.
43 Supra note 29.
110
110 SUPREME COURT REPORTS ANNOTATED
“The Ridjo doctrine simply states that the public utility has the imperative duty
to make a reasonable and proper inspection of its apparatus and equipment to
ensure that they do not malfunction. Its failure to discover the defect, if any,
considering the length of time, amounts to inexcusable negligence; its failure to
make the necessary repairs and replace the defective electric meter installed within
the consumer’s premises limits the latter’s liability. The use of the words “defect”
and “defective” in the above-cited case does not restrict the application of the
doctrine to cases of “mechanical defects” in the installed electric meters. A more
plausible interpretation is to apply the rule on negligence whether the
defect is inherent, intentional or unintentional, which therefore covers
tampering, mechanical defects and mistakes in the computation of the
consumers’ billing.”44
The production and distribution of electricity is a highly technical business
undertaking. In conducting its operation, it is only logical for a public utility,
such as MERALCO, to employ mechanical devices and equipment for the
orderly pursuit of its business.45 MERALCO has the imperative duty to make
a reasonable and proper inspection of its apparatus and equipment to ensure
that they do not malfunction, and the due diligence to discover and repair
defects therein. Failure to perform such duties constitutes negligence.46
True, consumers who tamper with their electric meter do so
surreptitiously to avoid being detected by the public utility providing the
service; hence, at first glance, it may seem unreasonable for us to chastise
MERALCO for not detecting the alleged tampering sooner. However, what
stands out in this case is the sheer length of time that the Chuas’ electric
meter allegedly existed in a tampered state without being discovered by
MERALCO if indeed the electric meter had been defective since 1992. If we
presume MERALCO’s find-
44 Id., at pp. 750-751.
45 Ridjo Tape and Chemical Corp. v. CA, supra note 39, p. 193; p. 551.
46 Id., at p. 194; p. 552.
111
, 111
ings to be correct, MERALCO discovered the broken seals in the Chuas’
meter after more than four years (from August 1992 to October 1996), and
only because the Chuas reported a possible defect with their electric meter to
the public utility company.
Aside from the long period of time involved, we also underscore the fact
that the alleged tampering in this case did not require special training or
knowledge to be detected. Certainly, the missing terminal seal, the broken
cover seal, and the broken sealing wire of the meter47 are visible to the naked
eye and would have caught the attention of MERALCO’s personnel in the
course of their meter readings.
As in Ridjo, we take judicial notice that during this long period of time,
MERALCO’s personnel had the opportunity to inspect and examine the
Chuas’ electric meter for the purpose of determining the monthly dues
payable. Even if MERALCO did not conduct these regular monthly
inspections, we find it reasonable to expect that within this four-year period,
MERALCO would, at the very least, annually examine the electric meter to
verify its condition and to determine the accuracy of its readings if ordinary
examination shows defects as in the case of the Chuas’ meter. That it failed
to do so constitutes negligence on its part, and bars it from collecting its claim
for differential billing.
On the issue of moral damages
 Article 32 of the Civil Code provides that moral damages are proper when
the rights of individuals, including the right against deprivation of property
without due process of law, are violated. Jurisprudence has established the
following requisites for the award of moral damages: (1) there is an injury—
whether physical, mental, or psychological—clearly sustained by the
claimant; (2) there is a culpable act or omis-
_______________

47 Supra note 8.
112
112 SUPREME COURT REPORTS ANNOTATED
sion factually established; (3) the wrongful act or omission of the
defendant is the proximate cause of the injury sustained by the claimant; and
(4) the award of damages is predicated on any of the cases stated in Article
2219 of the Civil Code.48
Considering the manner MERALCO disconnected the Chuas’ electric
service, we find the award of moral damages proper. Apart from the havoc
wreaked on the Chuas’ daily lives when MERALCO abruptly and without
legal basis cut off their electricity, the removal of the electric meter also
caused the Chuas extreme social humiliation and embarrassment as they
were subjected to speculations in their neighborhood of being “power thieves.”
As Mrs. Felicidad Chua testified, she suffered sleepless nights and felt
serious anxiety after the removal of their electric meter came to the attention
of the barangay. In fact, she even had to consult a doctor for this
anxiety.49 Thus, even if the Chuas did subsequently obtain their electricity
from another source,50 the damage to the Chuas’ reputation and social
standing had already been done.
However, moral damages, which are left largely to the sound discretion of
the courts, should be granted in reasonable amounts, considering the
attendant facts and circumstances.51 Moral damages, though incapable of
pecuniary estimation, are designed to compensate the claimant for actual
injury suffered and not to impose a penalty.52 As prevail-
_______________

48 Citytrust Banking Corporation v. Villanueva, 413 Phil. 776; 361 SCRA 446
(2001); Expertravel & Tours, Inc. v. Court of Appeals, 368 Phil. 444; 309 SCRA 141 (1999).
49 TSN, December 1, 1998, p. 7.
50 From their relative, Teresita Paqueo’s electric meter. Rollo, p. 70.
51 Prudenciado v. Alliance Transport System, Inc., G.R. No. L-33836, March 16, 1987, 148
SCRA 440.
52 San Andres v. CA, 201 Phil. 552, 557; 116 SCRA 81, 85 (1982).
113
, 113
ing jurisprudence53 deems the award of moral damages in the amount of
P100,000.00 appropriate in cases where MERALCO wrongfully disconnected
electric service, we uphold the CA ruling, reducing the moral damages
awarded from P300,000.00 to P100,000.00.
 WHEREFORE, the petition is hereby DENIED. The assailed decision of
the Court of Appeals dated October 20, 2003 in CA-G.R. SP No. 77034 is
AFFIRMED in toto.
SO ORDERED.
Carpio-Morales (Chairperson), Bersamin, Abad** and Villarama, Jr., JJ.,
concur.
Petition denied, judgment affirmed in toto.
Notes.—The power company cannot shift to the customer the penalty for
late payment of its franchise taxes if the same was not stipulated in their
agreement. (Manila Electric Company vs. Imperial Textile Mills, Inc., 465
SCRA 151 [2005])
One of the landmark pieces of legislation enacted by Congress in recent
years is the Electric Power Industry Reform Act of 2001 (EPIRA) which
established a new policy, legal structure and regulatory framework for the
electric power industry—the new thrust is to tap private capital for the
expansion and improvement of the industry as the large government debt
and the highly capital-intensive character of the industry itself have long
been acknowledged as the critical constraints to the program. (Gerochi vs.
Department of Energy, 527 SCRA 696 [2007])
——o0o——
_______________

53 See Manila Electric Company v. Jose, supra note 28; Manila Electric Company v. Vda. de
Santiago, G.R. No. 170482, September 4, 2009, 598 SCRA 315.
** Designated additional Member of the Third Division effective May 17, 2010, per Special
Order No. 843 dated May 17, 2010.

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