Petroleum Rules | Insistence On District Authority's NOC Is To Ensure Land Is Safe For Storing Petrol, Not To Probe Title Dispute: AP High Court

The Andhra Pradesh High Court has said that the intention behind insistence on No-objection certificate (NOC) which an applicant is to seek from the district authority under Rules 144 of the Petroleum Rules 2002 is to ensure that the site is safe for storing petrol and protect public interest. 

In doing so the court said that it is beyond the scope and jurisdiction of the authority to enquire into any title dispute between the lessor and lessee of the concerned land specially when the lease deed is a registered document. The court was hearing a plea moved by a lessee, challenging denial of NOC by District Collector Aruku Valley, in order to sub-lease the land for setting up a petrol pump. 

Justice Subba Reddy Satti in his order said,  

“Thus, the power under the Rules, as illustrated in Rule 144 and Proforma, clearly indicates that the insistence of NOC from the District Authority is to protect public interest and public safety. The location of the site plays a vital role for establishment of petrol tank qua safety and in that connection, the District Administration shall consider issuance of No objection. The dispute, if any, between the lessor and lessee is beyond the scope of the enquiry and that can be subject to separate challenge in appropriate proceedings. The District Authority must confine its scope of enquiry with the parameters referred to, under the Rule and proforma. Any enquiry beyond its power would amount to abdication of duty vested under the statutory provisions.”

Background:

The case of the petitioner (lessee) is that in 2013, he came into possession of 79 guntas by way of a lease deed for 28 years and 2 months. That, up until now, the land was used by the petitioner for agriculture purposes, but later the petitioner converted the land into a commercial property and sought to sub-lease it to Bharat Petroleum Corporation. For the purpose of which, an NOC was sought from the competent authorities.

The petitioner contended that an enquiry was conducted by the Tashildar, and the Joint Collector and both the officials deemed the site fit for storage of petroleum, however, the district collector refused to issue NOC, owing to the disputes that existed between the petitioner and the lessor.

Referring to Rule 144 of the Petroleum Rules, the Court reiterated that the sole purpose of the NOC is to satisfy that the land is safe for storage of petroleum and would not cause any public safety concerns. Relying on C. Albert Morris v. K Chandrasekaran (2023 LiveLaw (Ker) 508) the bench held:

“As discussed supra, the intendment of NOC under Rule 144 is to see to it that the storage of the product shall neither cause any prejudice to any neighboring person nor any public disturbances. It is beyond the scope and jurisdiction of respondent No.3 to enquire into the title dispute, if any, between the lessor and lessee, that too when the lease deed is a registered document and the registering authority confirmed that the lease period is for 28 years. Thus, the endorsement issued by the 3rd respondent does not withstand legal scrutiny.”

Thus, with the said observation, the Writ was allowed and the District Collector was directed to issue NOC in favour of the petitioner.

Case title: Mandi Rojashri v. Union of India

Counsel for petitioner: Jada Sravan Kumar

Counsel for respondent: M. Uma Devi, NH Akbar, GP for Revenue, SC for Corporation.

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