This petition for certiorari and prohibition questions the authority of respondent Presidential Commission on Good Government (PCGG) to investigate and/or reinvestigate ill-gotten wealth cases in view of the enactment of the Republic Act. No. 6770, otherwise known as the Ombudsman Act of 1989, and, assuming it has such authority, PCGG's lack of the "cold neutrality of an impartial judge" in conducting the reinvestigation of petitioners' case.

The facts are as follows: On August 10, 1989, the PCGG filed with respondent Sandiganbayan an information against petitioners Rebecco E. Panlilio and Trinidad Diaz-Enriquez for violation of Section 4 (b) of the Anti-Graft and Corrupt Practices Act, alleging that:

"x x x on or about and during the period from 1974 to 1980, both dated inclusive, in Ternate, Cavite and Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the accused as private individuals and capitalizing or taking advantage of their close personal relation with ex-President Ferdinand E. Marcos, did then and there willfully, unlawfully and knowingly induce, persuade or cause then President Ferdinand E. Marcos to violate section 3 (e) of R.A. 3019, by issuing several presidential directives and instructions geared towards the acquisition and titling of lands with the former U.S. Calumpang Naval Reservation and other lands adjoining thereof, in Ternate, Cavite, to form part of Puerto Azul complex, a property controlled and operated by the accused and causing the use of government funds, personnel and equipment in the constructions of internal road network and bridges within the said Puerto Azul complex, thereby giving to its owner/owners unwarranted benefits and advantage through manifest partiality and evident bad faith, to the damage and prejudice of the government.

"CONTRARY TO LAW."

The case was docketed as Criminal Case No. 13784.

After posting bail, petitioners filed a motion to quash the information on the grounds that (1) the facts charged do not constitute an offense: (2) respondent court has no jurisdiction over the persons of the accused, nor over the offense charged; (3) the preliminary investigation of PCGG I.S. No. 056 has not been terminated, and (4) the PCGG had no authority to file the information.

On November 2, 1989, the PCGG opposed the motion to quash. On November 8, 1989, petitioners filed a "Comment [on Opposition] and Supplement to Motion to Quash", requesting that the motion to quash be considered as and/or converted into a motion for reinvestigation, and praying that the Sandiganbayan order the PCGG to reinvestigate case in order that they may submit controverting affidavits and evidence.

In a resolution promulgated on November 29, 1989, the Sandiganbayan denied petitioners' motion to quash but granted their prayer for reinvestigation, ordering (1) the PCGG to conduct the reinvestigation, (2) allow petitioners to submit their counter-affidavits and supporting evidence within a reasonable period under the circumstances, and (3) submit the proper resolution and/or manifestation as to the results thereof on January 4, 1990. The arraignment of petitioners scheduled on December 8, 1989 was reset to January 4, 1990 in the event of an adverse resolution.

In compliance with the aforementioned resolution, the PCGG served on petitioners the Order dated December 14, 1989 directing them to submit their respective counter-affidavits and supporting evidence to Prosecutor Gregorio S. Daproza on December 28, 1989 at 2:00 p.m., after which, the case would be deemed submitted for resolution.

On December 26, 1989, petitioners filed with the PCGG a "Motion for Extension of Time to Submit Counter-Affidavit" on several grounds, among which, petitioners would seek a clarification from the Sandiganbayan as to whether the PCGG had jurisdiction to reinvestigate the case in view of the enactment of Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989.

On January 2, 1990, petitioners filed a "Motion for Clarification" with the Sandiganbayan seeking to determine whether the PCGG had the jurisdiction to reinvestigate their case. In an Order dated January 4, 1990, the Sandiganbayan held that the PCGG retained the jurisdiction to file and prosecute the instant case, there being no showing that the Ombudsman had indicated its authority to take over the prosecution of the same pursuant to Section 15 (1) of the Ombudsman Act of 1989.

In a letter dated January 9, 1990, petitioner Panlilio requested the Office of the Ombudsman to conduct the reinvestigation of Criminal Case No. 13784 pursuant to Section 15 (1) of the Ombudsman Act. In its reply dated January 19, 1990, the Ombudsman denied the request, stating that the exercise of its authority over the aforementioned case is inappropriate.

On February 15, 1990, petitioners moved for the reconsideration of the Sandiganbayan Order dated January 4, 1990. During the hearing on petitioners' motion, the PCGG did not appear but asked time to react to the motion. On February 20, 1990, petitioners received a copy of PCGG's Order dated February 19, 1990 holding that for failure of petitioners to file their respective counter-affidavits, the reinvestigation of the case is deemed terminated.

During the scheduled arraignment of petitioners on February 22, 1990, they were served in open court a copy of the Sandiganbayan's resolution dated February 21, 1990 denying their motion for reconsideration. Petitioners then requested for an opportunity to elevate the matter to the Supreme Court and/or to refile their motion to quash. The Sandiganbayan denied the request and ordered the arraignment of the petitioner Panlilio. Petitioner Panlilio refused to enter a plea, thus the Sandiganbayan ordered a plea of "not guilty" be entered into the record in his behalf. As to petitioner Enriquez, who was sick at the time, her arraignment was rescheduled to March 7, 1990.

On March 6, 1990, petitioners filed the instant petition, averring that (1) the Ombudsman, and not the PCGG, has the primary jurisdiction to reinvestigate Criminal Case No. 13784; (2) PCGG does not possess "the cold neutrality of an impartial judge" and is incompetent in proceeding with the reinvestigation; and (3) petitioners did not waive their right to reinvestigation.

We find the petition meritorious.

Petitioners were, however, mistaken when they claim the incompetency of the PCGG to investigate their case in view of the primary jurisdiction of the Ombudsman to investigate hidden wealth cases. While Section 15 (1) of Republic Act No. 6770 gave the Ombudsman the primary jurisdiction over cases cognizable by the Sandiganbayan it did not specifically revoke the PCGG's power of investigation. In Cojuangco, Jr. vs. Presidential Commission on Good Government,^[1] We held that said provision merely gave the Ombudsman concurrent authority to investigate offenses involving public officers or employees with similarly authorized agencies of the government, such as the PCGG, with the qualification that the Ombudsman may take over at any stage of such investigation in the exercise of its primary jurisdiction.^[2]

The authority of the PCGG to conduct preliminary investigation in ill-gotten wealth cases is provided for in Sections 2 (b) and 3 (a) Executive Order No. 1 and Sections 1 and 2 of Executive Order No. 14.^[3] In Cojuangco, supra, We have held that these provisions grant the PCGG -?

"x x x the power to investigate and prosecute such ill-gotten wealth cases of the former President, his relatives and associates, and graft and corruption cases that may be assigned by the President to the PCGG to be filed with the Sandiganbayan. No doubt, the authority to investigate extended to the PCGG includes the authority to conduct a preliminary investigation."^[4]

We also noted in the aforementioned case that under Section 15 (11) of Republic Act No. 6770, the Ombudsman was vested only with the power to investigate and to initiate the proper action for the recovery of ill-gotten wealth and/or unexplained wealth amassed after February 25, 1986 and the prosecution of the parties therein, thereby implicitly maintaining the authority of the PCGG to conduct preliminary investigation of ill-gotten wealth and/or unexplained wealth amassed before February 25, 1986.^[5]

This does not mean, however, that the Ombudsman does not have primary jurisdiction over ill-gotten wealth and/or unexplained wealth amassed before February 25, 1986. It has, and We reiterate Our ruling in Cojuangco, that despite Section 15 (11) of Republic Act No. 6770, the Ombudsman has primary jurisdiction to investigate such cases.^[6] The Ombudsman, however, may decline in exercising its primary jurisdiction, as in the case at bar, thereby leaving the concurrent government agency concerned, the PCGG, the task of conducting the preliminary investigation.

Regarding the issue of whether PCGG possessed the "cold neutrality of an impartial judge," We find for the petitioners.

We agree with the petitioners that it is impossible for the PCGG to possess the cold neutrality of an impartial judge in conducting the preliminaryinvestigation of I.S. No. 056 when the PCGG itself gathered the evidence in said case and filed the complaint against petitioners. It cannot both be a prosecutor and a judge at the same time.^[7]

Moreover, the PCGG has already shown a marked bias against petitioners when it abruptly terminated the preliminary investigation and resolved the case against them without even notifying petitioners of its adverse resolution, thereby preventing petitioners from filing a motion for reconsideration or moving that they be given additional time to file counter-affidavits and supporting evidence. This is the primary reason why the Sandiganbayan granted the petitioners' request for the reinvestigation of the case against them.

Therefore, to ensure a just and fair administration of justice, the PCGG should be disqualified from conducting a reinvestigation of PCGG I.S. No. 056 and should transmit the records of the same to the Ombudsman.

On the issue of whether petitioners had waived their right to a preliminary investigation, We likewise find for the petitioners.

The Sandiganbayan erred in considering that the petitioners have waived their right to a preliminary investigation for their failure to submit their counter-affidavits on December 28, 1989. Petitioners' failure to submit their counter-affidavits was because of the pendency of their "Motion for Clarification" with the Sandiganbayan at the time. When said motion was denied by the Sandiganbayan in its Order dated January 4, 1990, the petitioners went directly to the Ombudsman to ask for its intervention. It was only when the Ombudsman declined, did the petitioners seek a reconsideration of the Sandiganbayan's Order of January 4, 1990. During all this time, petitioners repeatedly told the PCGG Prosecutor that they would submit their counter-affidavits and supporting evidence once the issue of the Ombudsman's jurisdiction over the case had been determined with finality. Clearly, there is no waiver of petitioners' right to a preliminary investigation.

WHEREFORE, the petition is hereby GRANTED. The preliminary investigation conducted by the PCGG, including the information filed in Criminal Case No. 13784, are hereby declared null and void. The PCGG is ordered to transmit the records of PCGG I.S. No. 056 to the Ombudsman for appropriate action. Cost de officio.

SO ORDERED.

Gutierrez, Jr., Cruz, Paras, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado, Romero, and Bellosillo, JJ., concur.
Narvasa, C.J., joins J. Davide, Jr., in his concurring and dissenting opinion.
Feliciano, J., no part.

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^[1] 190 SCRA 226 (1990).

^[2] Id., at 241.

^[3] Sections 2 and 3, Executive Order No. 1 provide:

"SECTION 2. - The Commission shall be charged with the task of assisting the President in regard to the following matters:

"(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover or sequestration of all business enterprises and entities owned or controlled by them, during his administration, directly or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship.

"(b) The investigation of such cases of graft and curruption as the President may assign to the Commission from time to time.

"(c) The adoption of safeguards to ensure that the above practices shall not be repeated in any manner under the new government, and the institution of adequate measures to prevent the occurrence of corruption.

"SECTION 3. - The Commission shall have the power and authority:

"(a) To conduct investigations as may be necessary in order to accomplish and carry out the purposes of this order. (Emphasis supplied)."

Sections 1 and 2, Executive Order No. 14 provide:

"SECTION 1. Any provision of the law to the contrary notwithstanding, the Presidential Commission on Good Government with the assistance of the Office of the Solicitor General and other government agencies, is hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1, dated February 28, 1986 and Executive Order No. 2, dated March 12, 1986, as may be warranted by its findings.

"Section 2, The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof. (Emphasis supplied)."

^[4] 190 SCRA, at 238.

^[5] Id., at 241-242.

^[6] Id., at 242.

^[7] Id., at 254.

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