Holding

A No Objection Certificate under Rule 144 can be cancelled under Rule 151 whenever the licensee ceases to have any legal right to use the site for storing petrol, regardless of any remaining lease‑hold interest.

Summary

The petition concerned the cancellation of a No Objection Certificate (NOC) issued under Rule 144 of the Petroleum Rules, 1976 to Bharat Petroleum Corporation Ltd for operating a petrol pump on a lease‑hold site. The District Magistrate, invoking Rule 151, cancelled the NOC on the ground that the licensee no longer had the right to use the site for storing petrol; this cancellation was upheld by the Commissioner but set aside by the Allahabad High Court. The Supreme Court dismissed the special leave petition but clarified that under Rule 151 an NOC may be cancelled whenever the licensee ceases to have any legal right to use the site for storing petrol, irrespective of any remaining lease‑hold interest. The Court emphasized that the right to use the site can be lost by the expiry of tenancy or any other legal reason. Consequently, the High Court’s view that cancellation is permissible only when the licensee loses all rights to the site was affirmed, while the notion that a lease‑hold right shields the NOC from cancellation was rejected. The petition was dismissed as the petitioner chose not to press the case further.

Issues considered

Whether the District Authority can cancel a No Objection Certificate under Rule 151 only when the licensee has ceased to have any right to use the site for storing petrol
Whether the existence of lease‑hold rights on the site prevents cancellation of the NOC

Legislation cited

Petroleum Rules, 1976s. Rule 144, s. Rule 151

Subjects

No Objection CertificatePetroleum RulesRule 151Rule 144License cancellationLeasehold rightsDistrict MagistratePetrol pump

Judgment

A YOGESH KUMAR AND ORS.
v.
BHARAT PETROLEUM CORPN. LTD. AND ORS.
.....
AUGUST 10, 1990
B
[M.H. KANIA AND KULDIP SINGH, JJ.)

Petroleum Rules, 1976: Rule. 151-Cancellation of No Objection
Certificate granted under Rule 144 for running petrol pump-Inter-
pretation of rule-Clarification of. ~-

c The No Objection Certificate granted to Respondent No. 1 Corpo-
ration under Rule 144 of the Petroleum Rules 1976 for running a petrol
pump set up by it on a lease hold site was cancelled by respondent No. 5,
the District Magistrate under Rule 151 of the Rules. This order was
upheld by the Commissioner, but was set aside by the High Court, on
appeal. Hence the special leave petition against the High Court's order.
D
Dismissing the special leave petition, this Court,

HELD: The High Court was right in holding that the District
Authority under Rule 151 of the Petroleum Rules, 1976 can cancel the
No Objection Certificate only when the licensee ceases to have any right
E
to use the site for storing petrol. However, certain subsequent obser-
vations made by the High Court in the judgment might lead to an '< '
inference that so long as the licensee continues to have leasehold rights
on the site, the 'No Objection Certificate' cannot be cancelled at all.
That is not the correct position in law. [7388-C)
F
On a reading of sub-rule (1) of the Rule 151 it is clear that a 'No
Objection Certificate' granted under Rule 144 can be cancelled where- ~
ever the licensee ceases to have any right to use the site for storing petrol
and that right could be lost by a licensee either by his tenancy or right to
...
the use of the site coming to an end or for any other reason whereby, in
law, the right to use the site for storing petrol ceases. [738C-D]
G
CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) No. 5775 of 1990.

From the Judgment and Order dated 30.11.1989 of the Allaha- l._
H bad High Court in C. Misc. W.P. No. 2431of 1989.

736

I
YOGESH KUMAR v. BHARAT PETROLEUM 737

Dr. L.M. Singhvi and Pramod Dayal for the Petitioners.
A
T.S. Krishnamoorthy lye~ and D.M. Nargolkar for the Res-
pondents.

The following Order of the Court was delivered
B
On the facts and circumstances of the case including the facts set
"'-·~-out in the counter affidavit filed by R.B. Sahi we are not inclined to
interefere with the impugned order passed by the Allahabad High
Court.

Very briefly stated respondent No. 1 is the owner of a Petrol
c
Pump which is set up on a site in Dehradun, of which respondent No. 1
~---is the lessee. The 'No Objection Certificate' granted for conducting
the said Petrol Pump.was cancelled by respondent No. 5, the District
Magistrate of Dehradun, and that order was upheld by the Commis-
sioner. The Division Bench of the Allahabad High Court by the D
impugned judgment set aside the order of the Commissioner. The
special leave petition is directed against the said order as we have
already observed we see no reason to interfere with the actual order
passed by the Division Bench but we would like to make a clarification
'>' regarding the interpretation of Rule 151 of the Rules framed in 1976
under the Petroleum Act. E

Rule 144 of the said Rules deals with the issue of a 'No Objection
Certificate' for a new license for running a Petrol Pump. Rule 151
deals with the cancellation of the 'No Objection Certificate' and the
said rule reads as follows:
F

( 1) "A no objection certificate granted under Rule 144 shall·be
liable to be cancelled by the District Authority or the State
Government, if the District Authority or the State Govern-
ment is satisfied, that the licensee has ceased to have any
right to use the site for storing petrol; Provided that before G
cancelling a no objection certificate, the licensee shall be
given a reasonable opportunity of being heard.

(2) A District Authority or a State Government cancelling a 'no
objection certificate shall record in writing the reasons for
such cancellation and shall immediately furnish to the licen- H
738 SUPREME COURT REPORTS [1990] 3 S.C.R.

A see and to the licensing authority concerned a copy of the
order cancelling the no objection certificate."'

The High Court has rightly observed that the District Authority
under Rule 151 can cancel the No Objection Certificate only when the
licensee ceases to have any right to use the site for storing petrol.
B
However, there are certain subsequent observations made by the High
Court in the impugned judgment which might lead to an inference that
so long as the licensee continues to have lease-hold right& on the site,
the 'No Objection Certificate' cannot be cancelled at all. That does not
appear to be the correct position in law. On a reading of sub"'1'Ule ( 1) of
Rule 151 it is clear that a 'No Objection Certificate' granted under
c Rule 144 can be cancelled wherever the licensee ceases to h11.ve any
right to use the site for storing petrol and that right could be lost by a
licensee either by his tenancy or right to the use of the site coming to
an end or for any other reason whereby, in law, the right to use the site
for storing petrol ceases.
D In view of the clarification which we have made, Dr. Singhvi,
learned counsel for the petitioner states that he does not wish to press
the petition. The Special Leave petition is, therefore, dismissed.

N.P.V. Petition dismissed.