Important Point
Petroleum Act and Rules do not prohibit storage of High Speed Diesel in high quantity in an underground tank but for that a licence has to be obtained in Form XII but as appellant has licence in Form XI he is not entitled to store high quantity of High Speed Diesel in an under­ground tank and sell the same.

Judgment

G.B. Pattanaik, J.-Leave granted.

2. This appeal by grant of Special Leave is directed against the judgment dated 2nd September, 1997, of the Allahabad High Court in Civil Misc. Writ Petition No. 28539 of 1997. The Writ Petition had been filed by the appellant challenging the order dated 14th August, 1997 passed by the District Supply Officer, Shahjahanpur calling upon the appellant to stop using the underground tank and dispensing pump unit inter alia on the ground that there is no embargo either under the provisions of the Petroleum Act and the Rules framed thereunder or in the licence in Form XI which had been granted to the appellant under the Petroleum Rules not to sell High Speed Diesel by using the under­ground tank and the pump unit attached to the same. The High Court by the impugned judgment considered the different provisions of the Act and the Rules as well as the Forms, more particularly, Forms XI and XII and came to hold that a licensee under Form XI is not entitled to store High Speed Diesel in an underground tank and sale from the same by using a pump unit. With the aforesaid conclusion the Writ Applica­tion having been dismissed the appellant has preferred the present appeal.

3. Mr. Sudhir Chandra, the learned senior counsel appearing for the appellant contends that an analysis of the relevant provisions of the Act and the Rules will make it crystal clear that there is no prohibi­tion contained in the licence form, Form XI granted to the appellant from selling high speed diesel from the underground tank with a hand unit attached to the same and the High Court committed serious error in arriving at a conclusion that the licence under Form XI does not authorise the licensee to sell high speed diesel from an underground tank with a hand unit attached to the same. In order to appreciate the correctness of the aforesaid submissions it would be necessary to examine the relevant provisions of the Act and the Rules framed there­under.

4. The expression ‘petroleum’ has been defined in Section 2(a) of the Act to mean thus :-

“2(a) petroleum’ means any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon”

The said ‘petroleum’ is divided into 3 classes -class A, B and C and petroleum class B has been defined in class 2(bb) thus :-

“2(bb) petroleum Class B’ means petroleum having a flash-point of twenty-three degrees Centigrade and above but below sixty-five degrees Centigrade.”

5. It is not disputed that high speed diesel with which we are con­cerned in the pre­sent appeal is petroleum Class B.

Section 4 of the Act enables the Central Govt. to make Rules for import, transport and storage of petroleum. Under Section 29 of the Act, Central Govt. has been authorised to make rules in respect of any matter ancillary to such Rules as necessary to protect the public from danger arising from the import, transport, storage, production refin­ing or blending of petroleum.

Section 7 of the Act provides that no licence is required for trans­port or storage of petroleum Class B if the total quantity in posses­sion at any one place does not exceed 2,500 litres and none of it is contained in a receptacle exceeding one thousand litres in capa­city.

Under the Rules the expression ‘container’ has been defined in Rule 2(vii) to mean a receptacle for petroleum not exceeding 1,000 litres in capacity.

The expression ‘form’ has been defined in Rule 2(xii) to mean a form in the First Schedule.

The expression ‘petroleum in bulk’ has been defined in Rule 2(xv) top mean petroleum contained in a tank irrespective of the quantity of petroleum contained therein.

The expression ‘tank’ has been defined in Rule 2(xxii) to mean a receptacle for petroleum exceeding 1,000 litres in capacity.

Under Rule 4, containers exceeding one litre in capacity for petroleum Class A, and five litres in capacity for petroleum Class B or petrole­um Class C, shall be of a type approved by the Ch