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High Court of Madhya Pradesh
Vijay Kumar Shukla, J.
LAXMI SERVICE STATION, INDORE – APPELLANT
Versus
UNION OF INDIA & ORS. – RESPONDENTS
W. P. No. 17389 of 2022
Decided On : 08-09-2022
NOC Cancellation - Petroleum Retail Outlet - Petroleum Act, 1934, Rule 141, Rule 144, Rule 148, Rule 150 - The court discussed the provisions of the Petroleum Act, 1934 and the Petroleum Rules, 2002, focusing on the granting and cancellation of No Objection Certificate (NOC) for petroleum retail outlets. The court emphasized the requirement for the licensee to have the right to use the site for storing petroleum and highlighted the need for adherence to safety measures.
Fact of the Case:
The petitioner Firm sought quashment of the cancellation of No Objection Certificate (NOC) for its petroleum retail outlet. An incident of fire occurred during petroleum unloading, leading to the suspension of sales and supply. The District Magistrate subsequently ordered the cancellation of the NOC, citing public safety concerns.
Finding of the Court:
The court found that the District Magistrate's order of NOC cancellation was without jurisdiction due to the introduction of the Commissioner of Police system in the city. Additionally, the court held that the grounds for cancellation did not align with the provisions of Rule 150 of the Petroleum Rules, 2002.
Issues: 1. Jurisdiction of the District Magistrate to cancel NOC after the introduction of the Commissioner of Police system. 2. Validity of the grounds for NOC cancellation under Rule 150.
Ratio Decidendi: The court ruled that the District Magistrate lacked jurisdiction to cancel the NOC and emphasized that the NOC could only be cancelled if the licensee ceased to have the right to use the site for storing petroleum. The court also highlighted the need for adherence to safety measures and the unwarranted nature of the actions taken against the petitioner.
Final Decision: The court quashed the order of NOC cancellation and permitted the petitioner to operate the retail outlet, directing the District Authorities to allow the sale and supply of petroleum products.
ORDER : – The present petition has been filed under Article 226 of the Constitution of India seeking quashment of the order of cancellation of No Objection Certificate dated 14-7-2022 and also a direction to permit the petitioner Firm to operate the retail outlet situated at Plot No. 110, Ushaganj, Opposite G.P.O, A. B. Road, Indore which has been seized with effect from 3-5-2022 and a direction to resume the sales and supply of petroleum products to the retail outlet of the petitioner firm and other reliefs.
2. The facts of the case are that the petitioner Firm is a partnership firm and is engaged in the business of petroleum products through its filling and service centre/retail outlet known as ‘M/s Laxmi Service Station’ situated at A. B. Road, G.P.O Square, Indore. For establishing a retail outlet, as per provisions under the Petroleum Act, 1934, a No Objection Certificate was granted vide letter dated 30-8-1957 to M/s Standard Vacuum Oil Company. The said petrol pump was transferred to Hindustan Petroleum Corporation Limited (in short referred as ‘HPCL’) and the HPCL has granted the same retail outlet to the petitioner Firm as a Corporation owned/leased outlet which was commissioned since December, 1971. Thereafter the petitioner Firm has been continuously operating the retail outlet for which lease agreement as well as dealership agreements were executed between the petitioner Firm and HPCL. Currently the lease agreement was executed on 12-5-2006 for the period of 30 years i.e. upto 31-3-2035 on the terms and conditions contained in the lease agreement. The petitioner Firm has been appointed as Dealer by the oil company for the retail, sale and supply of petroleum products i.e. motor spirit (petrol) and HSD (diesel) since last more than 50 years. Lastly, dealership agreement was executed on 22-9-2014 for a period of 10 years i.e. upto 31-9-2024. It is further stated that the import, transport, production and storage of petroleum products are governed by the provisions of Petroleum Act, 1934.
3. It is submitted that under the provisions of the Act, the Rules have been framed which are called the Petroleum Rules, 2002. As per Chapter VII of the aforesaid Rules, granting of license is prescribed under Rule 141 and Rule 144 provides for No Objection Certificate. The Rules 148 provides for renewal of license as well as Rule 149 and 150 provides for refusal of NOC and cancellation of NOC. As per the provisions of Rule 148 of Rules, 2002, the Controller of Explosives has renewed the existing petroleum class A and B. The license granted to the petitioner has been renewed by order dated 22-1-2015 upto 31-12-2024.
4. On 2-5-2022 an incident of fire had taken place while unloading the petroleum product at M/s Laxmi Service Station at Indore at about 12.04 PM during Tank Truck (TT) decantation and the employees as well as partner of the Firm has taken precautionary measures and the fire was controlled with the assistance of fire equipments. The incident was reported to the HPCL officials at about 12.10 PM. The petitioner Firm narrated the incident that there was minor seepage from Hose Coupling at the decantation end, therefore, spilled product was accumulated in the unloading chamber and fire occurred at the TT Decantation Pit while removing the spilled product from the decantation chamber by a sponge, based upon which an investigation team was constituted by the HPCL for carrying out the inspection. Three members investigation team visited the retail outlet on 3-5-2022 at 12.30 PM and had submitted its report by recommending for issuance of Standard Operating Procedure, compulsory use of non-static material during the decantation process, dedicated unloading hose pipe at the outlet and also strict compliance of safety measures, initiation of action against the retail outlet employees and IT Crew who were involved in unloading process. It is further submitted that on the date of incident i.e. 2-5-2022 the District Food Officer has
The main legal point established in the judgment is that the communication dated 13-6-2016 was not an appealable order under Rule 154(2) of the Petroleum Rules, 2002.
The court established that the mere pendency of a criminal case cannot justify the denial of a No Objection Certificate under the Petroleum Rules.
The availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition, especially in cases where there has been a violation of the principle of natural justice ....
The court emphasized the importance of observing the principles of natural justice and the statutory mandate in administrative decisions, particularly in the cancellation of licenses or certificates.
A No Objection Certificate for establishing a Petroleum Retail Outlet can be issued if the applicant is in lawful possession of the site through a leasehold arrangement, despite objections from nearb....
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