Petroleum Rules | District Authority Can't Deny NOC For Fuel Outlet On Ground That Site Location Not Covered By Notification: Kerala High Court

The Kerala High Court has made it clear that under the Petroleum Rules, 2002, the District Authority is not empowered to reject No Objection Certificate (NOC) for fuel outlet on the ground that the proposed site is different from that mentioned in the notification.

Rule 144 of the Petroleum Rules, 2002 stipulates the grant of NOC.

The application for NOC by the Indian Oil Corporation was rejected by the Additional District Magistrate on noting that the proposed site location for establishment of a petroleum outlet was different from the one mentioned in the notification issued by the Company. The Single Judge Bench, on perusing Rule 144 had held that it was not within the domain of the Additional District Magistrate to interpret the notification and reject the NOC. 

The Division Bench comprising Justice A. Muhamed Mustaque and Justice Shoba Annamma Eapen, in the appeal before it, perused the scope of Rule 144, and noted that the nature of power under the Petroleum Act and Rules, 2002 lays down that the insistence upon NOC is for the purpose of protecting public interest and public safety. 

It added that the question as to whether location is covered by notification is not one that should be decided by the District Authority. 

"The nature of power under the Petroleum Act and Rules, 2002 as illustrated in Rule 144 and Proforma clearly indicates that the insistence of NOC from the District Authority is to protect the public interest and public safety. If the Indian Oil Corporation acted arbitrarily in allocating a petroleum outlet that is not a matter coming under the scope of power conferred on the District Authority. That can be subject to a separate challenge in appropriate manner under law. The District Authority must confine its scope of enquiry with the parameters referred under the proforma in the light of Rule 144 of the Petroleum Rules 2002. Any enquiry beyond its power would amounts to abdication of duty vested under the statutory provisions and that can be interfered by this Court under Article 226 of the Constitution of India. The scope of enquiry must be confined to protect the interest of public in the location proposed for the establishment of the petroleum outlet by the applicant. The question as to whether location is covered by notification or not is not a matter to be decided by the District Authority," the Bench observed. 

The Court thus observed that the Single Judge had rightly interfered with the order of the District authority.

The Court was also quick to add however that its decision did not approve or validate the proposed location by the dealer, and stated that if the proposed location was found to be in variance or deviation of the notification, the appellant would be at liberty to challenge the same in proper manner.

It thereby dismissed the appeal. 

Counsel for the Appellant: Senior Advocate P.K. Suresh Kumar, and Advocate K.P. Sudheer

Counsel for the Respondents: Senior Government Pleader V. Tekchand, Standing Counsel for Indian Oil Corporation M. Gopikrishnan Nambiar, and Advocates A. Salini Lal, R. Sunil Kumar, Ramola Nayanapally, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham, and Raja Kannan

Citation: 2023 LiveLaw (Ker) 508

Case Title: Jayarajan B.C. v. Lakshmi Mallya & Ors. 

Case Number: WA No. 1461 of 2022

Click Here To Read/Download The Judgment