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the rst partial payment to HI-LON in the amount of P10,461,338.00

On post audit, the Supervising Auditor of the DPWH issued Audit
Observation Memorandum No. NGS VIII-A-03-001 dated April 2, 2003
which noted that the use of the 1999 zonal valuation of P2,500.00/sq. m.
as basis for the determination of just compensation was unrealistic,
considering that as of said year, the value of the subject property had
already been “glossed over by the consequential bene ts” it has obtained
from the years of having been used as RROW. The auditor pointed out
that the just compensation should be based on the value of said property
at the time of its actual taking in 1978. Taking into account the average
value between the 1978 and 1980 Tax Declarations covering the subject
land, the Auditor arrived at the amount of P19.40/sq. m. as reasonable
compensation and, thus, recommended the recovery of excess payments
Upon review of the auditor’s observations, the Director of the LAO-
N issued on January 29, 2004 ND No. 2004-32 in the amount of
P9,937,596.20, representing the difference between the partial payment
of P10,461,338.00 to HI-LON and the amount of P532,741.80, which
should have been paid as just compensation for the conversion of the
RROW
Acting on the request of Dir. Lope S. Adriano, Project Director
(URPO-PMO) for the lifting of ND No. 2004-032 dated January 29,
2004, the LAO-N rendered Decision No. 2004-172 dated May 12, 2004,
af rming the same ND, and stating the value of the property must be
computed from the time of the actual taking
Resolving (1) the motions for reconsideration and request for
exclusion from liability of former DPWH Secretary Gregorio R.
Vigilar, et al. (2) the request for lifting, of Notice of Disallowance No.
2004-032 of OIC Director Leonora J. Cuenca; (3) the motion to lift the
disallowance and/or exclusion as person liable of Ms. Teresita S. de
Vera, Head, Accounting Unit, DPWH; and (4) the appeal from ND No.
2004-032 of former Assistant Secre

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551
VOL. 833, AUGUST 1, 2017 551
Hi-Lon Manufacturing, Inc. vs. Commission on Audit
tary Joel C. Altea and of Mr. Rupert P. Quijano, Attorney-in-Fact of HI-

LON, the LAO-N issued Decision No. 2008-172-A dated June 25, 2008,
which denied the appeal and af rmed the same ND with modi cation
that payment of interest is appropriate under the circumstances
Aggrieved, HI-LON led a petition for review before the COA. In its
regular meeting on June 9, 2009, the COA deferred the resolution of the
petition, and instructed its Legal Service Section to create a Special
Audit Team from the Fraud Audit and Investigation Of ce to investigate
and validate HI-LON’s claim
In its assailed Decision No. 2011-003 dated January 20, 2011, the
COA denied for lack of merit HI-LON’s petition for review of the LAO-
N Decision No. 2008-172-A, and af rmed ND No. 2004-032 dated July
29, 2004 with modi cation declaring the claimant not entitled to just
compensation. The COA also instructed the Special Audit Team to issue
an ND for the P523,741.80 payment to HI-LON not covered by ND No.
2004-032, without prejudice to the other ndings embodied by the
special audit report
On the issue of whether or not HI-LON is entitled to just
compensation for the 29,690 sq. m. portion of the subject property, the
COA found that the evidence gathered by the Special Audit Team are
fatal to the claim for such compensation
First, the COA noted that the transfer of the subject property in favor
of TGPI, the parent corporation of HI-LON, was tainted with anomalies
because records show that TGPI did not participate in the public bidding
held on June 30, 1987, as only three (3) bidders participated, namely:
Fibertex Corporation, TNC Philippines, Inc., and P. Lim Investment, Inc
Second, the COA pointed out that the Deed of Sale between APT and
Fibertex has a disclosure that “The subject of this Deed of Absolute Sale,
therefore, as fully disclosed in the AP

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Edi Wowwwwwww

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EDI WOWWWWWWW

the rst partial payment to HI-LON in the amount of P10,461,338.00

tary Joel C. Altea and of Mr. Rupert P. Quijano, Attorney-in-Fact of HI-

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