FACTS:

This case involves the City Government of Davao entering into a contract with Systems Plus, Inc. for the purchase of computer hardware and accessories. The contract was awarded without proper procurement process and without sufficient funding. Several irregularities were discovered in the contract, leading to its rescission. A complaint was filed against city officials and Systems Plus, Inc. for violating anti-graft and corrupt practices laws. The trial court dismissed the case, but the Office of the Ombudsman directed the accused to file their comments on the complaint. After several years, certain charges were recommended for dismissal while charges under the Anti-Graft and Corrupt Practices Act were recommended to be filed. Criminal Case No. 23193 was subsequently filed before the Sandiganbayan.

The petitioners in this case were charged with violating the Anti-Graft and Corrupt Practices Act for allegedly entering into a contract without subjecting it to public bidding and overpricing the acquisition cost. They filed a motion for reconsideration claiming their right to a preliminary investigation was deprived, which was denied. They then filed a Motion to Quash, arguing that there was no sufficient basis for charging them as they acted in good faith and had legal authority for the contract, which had been rescinded. Their motion to quash and motion for reconsideration were denied by the Sandiganbayan, leading them to file a petition alleging grave abuse of discretion. The Court found that their right to due process was violated as the preliminary investigation did not comply with the required procedures.

In a separate case, the accused filed a motion to dismiss during the preliminary investigation conducted by the provincial fiscal. The accused argued that the prosecution failed to present evidence and relied only on the affidavits of the complainant and witnesses. The motion to dismiss was denied, and the case was elevated to the Department of Justice (DOJ). The accused then filed a petition for certiorari before the Superior Court, seeking to set aside the provincial fiscal's resolution and prohibit further proceedings by the DOJ. The Superior Court dismissed the petition, upholding the validity of the preliminary investigation. The accused appealed to the Supreme Court.

ISSUES:

A. Whether petitioners were deprived of their right to a preliminary investigation, due process, and speedy disposition of their case.

B. Whether there is sufficient basis, in fact and in law, to charge petitioners of violating Sec. 3(g) of R.A. 3019.

RULING:

A. Yes, petitioners were deprived of their right to a preliminary investigation, due process, and a speedy disposition of their case:

1. The Ombudsman did not conduct a proper preliminary investigation in accordance with Administrative Order No. 07, depriving petitioners of due process.

2. There was an inordinate delay of four years in the termination of the preliminary investigation, violating petitioners’ right to the speedy disposition of their case.

B. No, there is no sufficient basis to charge petitioners of violating Sec. 3(g) of R.A. 3019:

1. The computerization contract was rescinded on 6 May 1991 before the Commission on Audit’s Special Audit Report No. 91-05 and the filing of the complaint by the Anti-Graft League, hence there was no longer any contract in existence.

PRINCIPLES:

1. The right to preliminary investigation is a substantive right and part of due process.

2. The deprivation of the right to a preliminary investigation and undue delay in its conduct violates the right to due process and the speedy disposition of cases.

3. To establish probable cause for violation of Sec. 3(g) of R.A. No. 3019, there must be a contract or transaction grossly and manifestly disadvantageous to the government.

4. Rescission of a contract renders it non-existent in contemplation of law, negating any charges based on the said contract.