Existing Petrol Pump Owner Has No Locus To Challenge Rival Outlet: Allahabad High Court

Court Dismisses Petition Seeking to Block New Petrol Pump on Grounds of Unfair Competition

Introduction: The Allahabad High Court recently held that an existing petrol pump owner cannot challenge the approval or No Objection Certificate (NOC) granted to a rival outlet merely because the establishment of the new outlet may affect his business financially. Dismissing a writ petition filed by M/s D.K. Automobiles, the Bench of Justice Shekhar B Saraf and Justice Abdhesh Kumar Chaudhary ruled that the petitioner lacked locus standi to maintain the petition as it was aimed at eliminating healthy competition.

Case Background: The petitioner, proprietor of a petrol pump of Indian Oil Corporation in Bahraich, was aggrieved by the allotment of a new petrol pump on an adjoining plot. The District Magistrate had issued an approval order on February 9, 2026, and the City Magistrate issued an NOC on February 13, 2026, in favor of private respondents. The petitioner argued that the new pump violated Clauses 3.1 and 3.2 of the 2022 Guidelines, which mandate a minimum distance of 300 meters (undivided carriageway) or 1000 meters (divided carriageway) between fuel stations, unless access is provided through a 7-meter-wide service lane. The petitioner claimed that no such service lane existed. He also argued that two adjoining pumps would adversely affect his financial health and should not be permitted as public policy.

Arguments Presented: The petitioner's counsel contended that the approval and NOC were invalid because the service lane requirement was not met. He also argued that public policy requires preventing clustering of petrol pumps to maintain fair competition. On the other hand, the respondents, including the State authorities and Reliance BP Mobility Limited, challenged the maintainability of the writ petition, arguing that a rival businessman cannot invoke writ jurisdiction to block a competitor.

Legal Analysis: The court delved into the issue of locus standi, citing Supreme Court precedents: Jas Bhai Moti Bhai Desai v. Roshan Kumar (1976) 1 SCC 671, Nagar Rice and Flour Mills v. N.T. Gowda (1970) 1 SCC 575, and Mithilesh Garg v. Union of India (1992) 1 SCC 168. The Court reiterated that to maintain a writ of certiorari, the petitioner must be an "aggrieved person" whose legally protected interest is affected. Mere commercial loss from competition does not constitute such injury. The Court also referred to earlier decisions of the Allahabad High Court in Mili Rai v. Union of India and M/s Tushar Filing Stations v. Union of India , which held that a petrol pump owner has no fundamental or statutory right to stop another operator from setting up a pump nearby. The court further noted that the right of the new operators to carry on business is as much a fundamental right as that of the petitioner. Since no fundamental right of the petitioner was infringed, the writ could not be maintained.

The court also observed that a prior Public Interest Litigation (PIL) No. 293 of 2026 had already considered the same issue. In that PIL, the court was informed that the distance guidelines had been amended and that a 7-meter service road had been constructed. The court in the present case noted that the petitioner had merely modulated the prayer while retaining the same grounds, amounting to an abuse of process.

Key Observations: The court made several notable observations:

  • "Admittedly, the petitioner is running a petrol pump. By means of present writ petition he is opposing the establishment of another petrol pump near his petrol pump. The whole effort of the petitioner is to stop a new operator coming in the field as his competitor. The petitioner has no fundamental or statutory right to stop another operator coming in business near his petrol pump."

  • "We are not inclined to exercise our discretionary jurisdiction where the claim of the petitioner is essentially aimed at eliminating healthy competition and for perpetuating his monopoly in the area."

  • "The present petition is basically aimed at eliminating healthy competition and monopolistic in nature. In any case, this court cannot act as a insurance company to insure the business health of the petitioner."

  • "So long as the respondent no.7 and 8 exercised their fundamental right without impairing the like fundamental right of the petitioner, no injury could be said to have been caused to the petitioner, who had no locus standi to challenge the approval or grant of NOC for opening of the petrol pump by the competent authority."

Court's Decision: The Allahabad High Court dismissed the writ petition, holding that it was not maintainable due to lack of locus standi. The court also noted that the petition was an abuse of process as the same issue had been raised in an earlier PIL. The decision reinforces the principle that courts will not intervene in business competition matters unless a legally protected right is infringed. The ruling clarifies that existing business owners cannot use writ jurisdiction to stifle competition and must compete on merits rather than through litigation.