Objections to Fuel Station Suitability Must Be Raised Before Final Approval, Rules Kerala High Court

Kochi, India – In a significant ruling clarifying the timeline for challenging infrastructure projects, the Kerala High Court has held that once a 'Provisional Permission' for establishing a facility like a petroleum retail outlet is granted, the suitability of the site cannot be re-examined at the stage of granting 'Final Permission'. Justice M.A. Abdul Hakhim emphasized that any grievance regarding the site's conformity with norms must be raised before or immediately after the provisional stage, not after the promoter has invested substantial sums based on the initial approval.

The Court dismissed a writ petition filed by two residents of Kollam who sought to stop the operation of a newly constructed Indian Oil Corporation petrol pump, citing violations of Ministry of Road Transport and Highways (MoRTH) guidelines.

Background of the Case

The case involved two writ petitions filed by Prasad K. and Anilkumar against the establishment of a petrol pump by Devarajan Bhaskaran (the dealer) in their neighbourhood. The petitioners challenged the No-Objection Certificate (NOC) issued by the District Collector and the final access permission granted by the National Highway authorities.

The Highway Administration had issued a 'Provisional Permission' for access to the highway on August 24, 2021. Based on this, the dealer and Indian Oil Corporation proceeded with the construction. However, after the petitioners filed a representation in February 2024, a highway authority report initially found that the location violated certain MoRTH guidelines concerning distance from intersections. This favorable report was later withdrawn by the same authority without hearing the petitioners, and a 'Final Permission' was granted on August 26, 2025, allowing the outlet to become operational.

Arguments from Both Sides

Petitioners' Stance: The petitioners’ counsel, Sri. K. Mohanakannan, argued that the final permission was issued illegally, ignoring an internal report that confirmed guideline violations. They contended that they were denied a fair hearing when this adverse report was withdrawn, violating the principles of natural justice.

Respondents' Stance: Senior Counsel Sri. P. Deepak, representing the dealer, argued that the petitioners were late in raising their objections. He contended that the appropriate time to challenge the site's suitability was when the provisional permission was granted in 2021. Having allowed the construction to complete and investments to be made, the petitioners could not now halt the project on grounds that should have been adjudicated years earlier. He pointed out that the petitioners were aware of the project since 2019 and failed to act with due diligence.

Court's Analysis and Key Principle

The Court dissected the legal framework under the Control of National Highways (Land and Traffic) Act, 2002, and the MoRTH Guidelines. Justice Hakhim observed that the scheme involves a two-stage permission process: provisional and final.

The judgment clarified that the assessment of a site's suitability, including its compliance with all norms and guidelines, is a matter to be conclusively decided before the issuance of the provisional permission. Once this is granted, the promoter invests money and builds the facility. The final permission stage is intended only to verify if the construction has been completed in accordance with the approved drawings.

In a pivotal excerpt, the court stated: > "It is not legally permissible for the Highway authorities to check the suitability of the site and access after issuance of the Provisional Permission again at the time of processing the Application for Final Permission. It is highly unjust for an Authority to deny operational permission to an industry/establishment on the ground of unsuitability of the site when such Authority itself has granted permission for installation, finding that the site is suitable, and when the Applicant has invested a huge amount of money to establish the industry/establishment."

The court found that the petitioners, being immediate neighbours, could not plead ignorance and should have challenged the provisional permission in 2021. Their delay in raising the issue until 2024, after the outlet was constructed, was fatal to their case. The Court concluded that even if the petitioners were heard before the final permission was granted, the outcome would not have changed, as the scope of inquiry at that stage was limited to verifying construction compliance.

Final Verdict

The High Court dismissed the writ petition (W.P.(C) No.38776/2025) challenging the final permission, refusing to exercise its discretionary powers under Article 226 of the Constitution. It noted that interfering at this late stage would be unjust, given the substantial investment made by the dealer.

However, in the related petition (W.P.(C) No.27507/2025), the court set aside an order rejecting the petitioners' representation against the initial NOC and directed the Deputy Collector to reconsider it after hearing all parties. The court noted that an appeal against the grant of an NOC is not maintainable under the Petroleum Rules, 2002, and thus the representation must be decided on its merits.