There is no statutory prohibition against establishing retail outlets near residential areas if safety norms are met.

ORAL JUDGMENT

Date : 14-10-2025

1 The petitioner has filed the instant application for the following reliefs:

“I. To set aside the order contained in Letter No. 26-0/2018-2907 dated 18-09-2018 by which the Divisional Commissioner, Tirhut Division, Mazaffarpur, has rejected application of Petitioner preferred against the order passed by the District Magistrate, Vaishali, refusing to grant 'No-Objection Certificate' applied for obtaining license to establish new Retail Outlet (Petrol Pump), awarded by the respondent Indian Oil Corporation Limited.

II. To set aside the order contained in Memo No. 1049 dated 25-5-2018 by which the District Magistrate, Vaishali, refused to grant 'No-Objection Certificate’ applied for obtaining license for establishment of new Retail Outlet (Petrol Pump) on the proposed site Mauza- Hasanpur Zunaid, Thana No. 625 (Mahnar), Khata No. 411(o), 998 (N), Plot No. 778, District-

Vaishali.

III. To direct the Respondent No. 2 to grant 'No-Objection Certificate' as per the provisions of Rule 144 of the Petroleum Rules 1976, for new license to establish Retail Outlet on the proposed site situated in Mauza- Hasanpur Zunaid, Thana No. 625 (Mahnar), Khata No. 411(0), 998 (N), Plot No. 778, District- Vaishali.”

2. The brief facts as culled out from the petition are that the petitioner applied for a Retail Outlet dealership with the Indian Oil Corporation Limited (IOCL), pursuant to an advertisement dated 26.10.2014 inviting applications for various locations in Bihar, including a site within 2 KM from Hasanpur Teenmuhani towards Mahnar in Vaishali District. The petitioner submitted an application on 25.11.2014 offering land situated at Mauza Hasanpur Zunaid, Thana No. 625 (Mahnar), Khata No. 411(0), 998 (N), Plot No. 778, Area 1707 sq. mtr. District Vaishali, for the proposed site for the construction of Retail Outlet. Following inspection and verification by the Land Evaluation Committee, the site was found suitable.

3. It is further submitted that consequently, IOCL issued a Letter of Intent in favour of the petitioner on 27.03.2015. The petitioner complied with all procedural requirements, including submission of layout plans and obtaining clearances from various authorities, such as the Fire Station and Forest Department. Despite all clearances and compliance with statutory requirements—including the conversion of land from agricultural to non-agricultural use after payment of the requisite fees—the District Magistrate, Vaishali, refused to grant the mandatory ‘No Objection Certificate’ (NOC) required under Rule 144 of the Petroleum Rules , 1976. The refusal was primarily on the ground that residential dwelling houses (Basti) were situated within 30 meters of the proposed site, raising concerns about fire hazards and public safety.

4. The Learned counsel for the petitioner submitted that the refusal was based on personal opinion and hypothetical concerns not supported by the statutory safety norms under the Petroleum Rules , 1976 and the Explosive Rules , 2008. The Fire Station Officer in its report had certified that the site was suitable, as no overhead high-tension wire is passing through the proposed land, no fireworks activities are carried out and there is no densly populated area immediately around the site. Further, it is pointed out by the Learned counsel that there is no specific rule that prescribes a 30-meter safety distance in such cases and a significant proportion of petrol pumps in urban area operates in close proximity to residential dwellings. The petitione