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SPS. KISHORE LADHO CHUGANI v. PHILIPPINE DEPOSIT INSURANCE CORPORATION

FACTS:

The petitioners are appealing the decision of the Court of Appeals (CA) which affirmed the Regional Trial Court (RTC) dismissing their Petition for Certiorari for lack of jurisdiction. The petitioners intended to open Time Deposit Accounts with the Rural Bank of Mawab (Davao), Inc. (RBMI) and deposited their funds through inter-branch deposits to RBMI's accounts in Metrobank and China Bank-Tagum, Davao Branches. RBMI sent them the necessary forms and they received Certificates of Time Deposits (CTDs) and Official Receipts. However, RBMI was placed under receivership and closed by the Bangko Sentral ng Pilipinas. The petitioners filed claims for insurance of their time deposits with the Philippine Deposit Insurance Corporation (PDIC), but the PDIC denied the claims on various grounds. The PDIC rejection led the petitioners to file a Petition for Certiorari with the RTC, which dismissed their petition for lack of jurisdiction. Their appeal to the CA was also dismissed, prompting them to file a Petition for Review on Certiorari with the Supreme Court.

ISSUES:

  1. Whether the Court of Appeals is correct in ruling that the Regional Trial Court has no jurisdiction over the Petitions for Certiorari filed by the petitioners.

  2. Whether the Philippine Deposit Insurance Corporation (PDIC) committed grave abuse of discretion in denying petitioners' claim for deposit insurance.

RULING:

  1. The Court affirms the ruling of the Court of Appeals dismissing the appeal of the petitioners and affirming the Regional Trial Court's Consolidated Order. The jurisdiction of the RTC over the Petitions for Certiorari filed by the petitioners was correctly questioned by the CA. The PDIC did not commit grave abuse of discretion in denying petitioners' claim for deposit insurance. The petition is without merit.

PRINCIPLES:

  • The Philippine Deposit Insurance Corporation (PDIC) has the duty to grant or deny claims for deposit insurance.

  • PDIC has the authority to determine and prescribe what obligations of a bank constitute deposit liabilities of the bank, and not all obligations of a bank are considered deposits for purposes of insurance coverage.

  • PDIC is not required to pay deposit insurance for investment products, unfunded or fictitious/fraudulent deposit accounts, or deposits constituting and/or emanating from unsage and unsound banking practices.