Where Commissioner Of Police System Exists, District Magistrate Is Not "District Authority" Under Petroleum Rules, 2022: Madhya Pradesh High Court

Interpreting the term "District Authority" as mentioned under Rule 2(x) of the Petroleum Rules, Justice V.K. Shukla observed-

The definition of "District Authority" under sub clause 10 of Rule 2 and the language of Rule 150 is unambiguous and very clear that the power has been conferred to the District Authority or the State government and not to the District Magistrate. There is no provision under the Petroleum Act or the Petroleum Rules conferring power to the State government to delegate its power to the District Magistrate. The District Magistrate is only the authority in the towns which are not having a Commissioner of Police or Deputy Commissioner of Police and not for the towns where the post of Commissioner of Police or Deputy Commissioner of Police are existing.

Facts of the case were that the Petitioner was running a petrol pump wherein a fire incident took place during the decantation process. The fire was controlled with the assistance of fire equipment. The outlet was then subjected to multiple rounds of inspections by the stakeholders, including the State authorities. The District Magistrate issued a Show Cause Notice to the Petitioner and later, exercising the power under Rule 150 of the Petroleum Rules, revoked the NOC granted to the Petitioner to run the respective petrol pump. Aggrieved, the Petitioner moved the Court challenging the order of revocation.

The Petitioner submitted before the Court that the impugned order suffered from jurisdictional error. It was asserted that as per Rule 2(x), the Commissioner of Police is the "District Authority" in towns having Commissioner of Police, Commissioner or a Deputy Commissioner of Police and that in any other place, it would be the District Magistrate that shall exercise the said power. Since Indore City had the Commissioner of Police system, the Petitioner contended that its Commissioner of Police shall be the District Authority as per the Petroleum Rules.

Further, referring to the provisions under Rule 150, the Petitioner argued that the only ground on which the NOC can be cancelled is if the licensee has ceased to have any right to use the site for storing petroleum, which was not applicable to its case. It was pointed out by the Petitioner that the ground taken by the District Magistrate to cancel its NOC was outside the scope of Rule 150 and thus, the impugned order was bad in law.

Per contra, the State argued that the Commissioner of Police has been conferred with powers of District Magistrate only in respect of the Acts mentioned in Schedule appended to the notification issued U/S 20(5) CRPC. It was submitted that in the Schedule, the Petroleum Act had not been included and, therefore, the power still existed with the District Magistrate.

With regard to the ground taken in the impugned order, the State argued that the words under Rule 150 of the Petroleum Rules cannot be given a narrow meaning. It had to be interpreted to be applicable in a case where the company has failed to observe the norms relating to safety.

Examining the submissions of parties and documents on record, the Court did not find merit in the submission put forth by the State to justify the jurisdiction exercised by the District Magistrate-

I do not find any merit in the submissions of learned counsel for State - respondent No.2 that since the Petroleum Act is not included in the Schedule of the various Acts appended along with the notification of sub-section 5 of Sec.20 of the Code of Criminal Procedure, 1973, therefore, the District Magistrate would not ceases to be the competent authority under Rule 150 of Rules 2002 as the power of the District Magistrate has not been conferred on the Commissioner of Police even after the application of the Commissioner of Police system in Indore town. The provisions of sub-section 5 of Sec.20 of Cr.P.C reads that nothing in this section precluded the State government from conferring under any law for the time being in force, on a Commissioner of Police, all or any of the power of an Executive Magistrate in relation to a metropolitan area.

Analysing the language of Rule 150, the Court further opined that it unambiguously and unequivocally states that the NOC can be cancelled by the District Authority or the State Government if it is satisfied that the licensee has ceased to have any right to use the site for storing petroleum. The Court noted that there is nothing brought on record to suggest that the Petitioner has ceased the right to use the site-

There is nothing available which refracts the petitioner Firm has ceased right to use the right for storing petrol. On the contrary, the respondent No.4 HPCL company has stated that the incident was investigated by them and the action has already been taken against the tank truck (TT Crew) driver/helper and two employees of the retail outlet. An advisory has already been issued on 4.5.2022 to all the retail outlet dealers for adhering to the complete safety measures. The action taken by the respondent No.2 has been held to be unwarranted on account of the prejudice caused to the respondent company.

With the aforesaid observations, the Court allowed the Petition, thereby setting aside the impugned order of cancellation of NOC granted to the Petitioner to run their petrol pump.

Case Title: M/S LAXMI SERVICE STATION VERSUS UNION OF INDIA AND ORS.

Case citation: 2022 LiveLaw (MP) 208

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