Orissa High Court
Indian Oil Corporation Ltd. ... vs Collector And District Magistrate ... on 30 August, 2017
Author: S.K.Mishra
Bench: S.K.Mishra
ORISSA HIGH COURT, CUTTACK
W. P.(C) Nos.6786/2017 and 7336/2016
In the matter of applications under Articles 226 and 227 of the
Constitution of India.
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In W.P.(C) No.6786 of 2017
Indian Oil Corporation Ltd.
Represented through its Senior Divisional
Retail Sales Manager. ..... Petitioner
Versus
Collector & District Magistrate, Jajpur
and others
..... Opposite parties
For Petitioner : M/s.Syamalendu Pattnaik
N.D.Deo,H.S.Deo, D.R.Behera.
For Opposite Party Nos.1 & 2 : Addl. Government Advocate
For Opposite Party No.3 : M/s.S.N.Biswal, K.C.Tripathy,
P.R.Mishra, A.K.Satpathy and
Y. Dalai.
For Opposite Party No.4 : Mr. Sidharth Ray
In W.P.(C) No.7336 of 2016
Rabinarayan Swain ..... Petitioner
Versus
Union of India and others ..... Opposite parties
2
For Petitioner : M/s.K.C.Tripathy,
P.R.Mishra, A.K.Satpathy.
For Opposite Party Nos.1, & 3 : Addl. Government Advocate
For Opposite Party No.4 : M/s. Syamalendu Pattnaik
N.D.Deo,H.S.Deo and
D.R.Behera.
For Opposite Party No.5 : M/s. Sidharth Ray,
Khirod Kumar Sahoo and
Prafulla Kumar Khillar.
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PRESENT:
THE HONOURABLE MR. JUSTICE S.K.MISHRA
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Date of Judgment: 30.8.2017
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S.K.Mishra, J.This judgment arises out of two writ petitions, which were heard together today. In the earlier writ petition being W.P.(C) No.7336 of 2016, the petitioner- Rabinarayan Swain, being a dealer for retail outlet of Hindustan Petroleum Corporation, operating in the name and style of "Swarnalata Filling Station", has prayed that appropriate order be passed directing the Collector, Jajpur, opposite party no.2, not to issue the No Objection Certificate or permission or not to proceed further to open retail outlet in Village Byree under Darpan Tahasil in the district of Jajpur under Khata No.1268/278 (Old Khata N.523) Plot No.2252 and 2253 in favour of any person on the ground that it violates 3 the resolutions of the Indian Road Congress. An interim order was passed in his favour on 5.5.2016.
In the later case, the Indian Oil Corporation Ltd.(hereinafter referred to as the "IOCL" for brevity) has prayed in W.P.(C) No.6786 of 2017 seeking a mandamus against the opposite parties, more particularly against opposite party nos.1 and 2 for quashing Annexure-8 through which the opposite party nos.1 and 2 cancelled the NOC granted in favour of the petitioner company.
2. The facts are not in dispute. Rabinarayan Swain has been operating the afore-described Petrol Pump since long in the same area. On 26.6.2014, the IOCL released an advertisement for appointment of dealership for Kisan Seva Kendras (Village Retail Outlet) for various places of Odisha including the location of Chhatia-Bayree in the district of Jajpur. In response to the advertisement issued by the petitioner, opposite party no.4, who is opposite party no.5 in the earlier writ petition, had applied for the same and after completion of selection process he was selected for allotment of Kisan Seva Kendra at Byree.
3. On 18.8.2015, i.e. after the selection procedure was over, the Sr. Divisional Retail Sales Manager issued a letter of intent in favour of opposite party no.4. The said Sr. Officer of the petitioner on 19.10.2015 requested the Collector, Jajpur for issuance of No Objection Certificate in favour of the Senior Divisional Retail Sales Manager, Indian Oil Corporation Ltd. (MD), Bhubaneswar. On 3.3.2016, the Addl. District Magistrate, Jajpur, opposite party no.2 in W.P.(C) No.6786/2017, after obtaining all statutory clearance from different departments having verified the documents produced by the petitioner issued No Objection 4 Certificate in its favour. The department of Petroleum and Explosives Safety Organization, Kolkata issued/granted the Explosive License after enquiry in favour of the petitioner on 28.3.2016. On the same day, letter of appointment was issued in favour of opposite party no.4. On that date, the dealership agreement was executed between the IOCL and opposite party no.4 and sanction amount was released in favour of opposite party no.4. On that day itself the IOCL received notice from this Court in the earlier writ petition, i.e. W.P.(C) No.7336/2016. On 6.2.2017, opposite party no.2 allegedly without issuing any notice to show cause, without affording any reasonable opportunity of hearing, cancelled the No Objection Certificate issued in favour of the IOCL.
4. Having heard learned counsel for the parties, this Court is of the opinion that the following questions arise for consideration in these cases:-
(a) Whether the petitioner, Rabinarayan Swain, who owns a retail outlet, a writ petition to quash LOI in favour of opposite party no.4, is maintainable ?
(b) Whether the resolution of the Indian Road Congress has mandatory effect or is simply directory ?
(c ) Whether opposite party nos.1 and 2 in the later application have violated the principles of natural justice while cancelling the No Objection Certificate issued in favour of the petitioner ?
(d) Whether the objections raised by the owner of
another Petrol Pump and decision taken by the
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authorities to cancel the No Objection Certificate should be revoked ?.
5. As far as the first issue is concerned, learned counsel for the Petrol Company, opposite party no.4, relied upon the reported case of the Nagar Rice and Flour Mills and others Vrs. N.Teekappa Gowda & Bros and others; AIR 1971 SUPREME COURT 246; wherein the Hon'ble Supreme Court while examining the applicability of Section 8(3) (c) of the Rice Milling Industry (Regulation) Act, 1958, has come to the conclusion that where the owners of an existing rice mill shifted its existing location and obtained the necessary permission for change of location from the Director of Food and Civil Supplies, even if it be assumed that the previous sanction has to be obtained from the authorities before the machinery is moved from its existing site, the competitor in the business(owner of another rice mill) can have no grievance against the grant of permission permitting the installation on a new site. The right to carry on business being a fundamental right under Article 19(1)(g) of the Constitution, its exercise is subject only to the restrictions imposed by law in the interests of the general public under Article 19(6)(i). In the case of M/s. Nataraja Agencies Vrs. The Secretary, Ministry of Petroleum and Natural Gas, Government of India and others; the Division Bench of Madras High Court in W.A. No.4057 of 2004, has taken into consideration the reported case of MITHILES GARG V. UNION OF INDIA; AIR 1992 SC 443; wherein the Hon'ble Supreme Court has held that the rival business man cannot file a writ petition challenging the setting up a similar unit by another business man on the ground establishing a rival business close to his 6 business-place would adversely affect his business interest. In fact in the case of Mithilesh Garg (supra), the Hon'ble Supreme Court has followed its earlier judgment given in Nagar Rice and Flour Mills and others (supra). Thus, this Court is of the opinion that the writ petition filed by Rabinarayan Swain challenging the allotment order in favour of opposite party no.4 is not maintainable on the face of record. Learned counsel for the opposite party, on the other hand, submits that in the Constitution Bench Judgment in T.B. Ibrahim, Proprietor, Bus Stand, Tanjore Vrs. The Regional Transport Authority, Tanjore; A.I.R. 1953 SUPREME COURT 79; the Hon'ble Supreme Court has held that there is no fundamental right in a citizen to carry on business wherever he chooses and his right must be subject to any reasonable restriction imposed by the executive authority in the interest of public convenience. Therefore, it is argued by the learned counsel appearing for the petitioner- Rabinarayan Swain that opposite party no.4 cannot claim any fundamental right to carry on business and hence he has right to maintain a writ petition against him. However, on careful examination of the Constitution Bench Judgment, this Court finds that the Hon'ble Supreme Court has taken into consideration the various provisions of Motor Vehicles Act, 1939, especially Section 68(1) of the Rules made thereunder and the previsions of Madras Vehicles Rules, 1940 and examined the validity of Section 68 of the M.V. Act. In that case the factual aspect is different. In fact the Motor Vehicle Act provides for certain restrictions and also provides for the State to make Rules for imposition of reasonable restrictions. Accordingly, statutory Rules were issued by the State of Madras, as it was then. This Court is of the opinion that the ratio decided in the case of T.B. Ibrahim, Proprietor, Bus Stand, Tanjore (supra) is not applicable to the present case.
7Similarly, a question arose regarding canalization of the imports through special or specialize agency or channels in the Constitution Bench Judgment of Glass Chatons Importers and others Vrs. Union of India and others; AIR 1961 SUPREME COURT 1514. In that case the Hon'ble Supreme Court has held that the finance is granted to the agency or channels through which imports have been decided to be canalized, those agencies or channels can carry on trade, but this is not because of an acquisition by those agencies or channels of the right to carry on trade which the unsuccessful applicants for license had. Article 31 of the Constitution has therefore no application. The Hon'ble Supreme Court further held that a canalization of imports is in the interests of the general public and the refusal of import licenses to applicants outside the agencies or channels decided upon must necessarily be held in the interests of the general public. Therefore, the Hon'ble Supreme Court refused to accept the prayer of the aggrieved party. Some other judgments have been cited by the learned counsel for the petitioner- Rabinarayan Swain, but those have no application in this case. So, this Court is of the opinion that the writ petition at the instance of Rabinarayan Swain, who owns a retail outlet, claiming that the NOC issued in favour of opposite party no.4 is violative of the Resolution of the Indian Road Congress is not maintainable.
6. The second question is whether the Resolution of the Indian Road Congress has mandatory effect or is simply directory. This aspect has been examined by other High Courts. The Rule of which the petitioner-Rabninarayan Swain relies is appearing at paragraph 4.6.4. It reads as follows:
8"4.6.4. For installation of new fuel station within the 1000 m or 300 m distance of existing fuel station as the case may be, new entrant would be responsible for construction and maintenance of the common service road, page no.6 deceleration and acceleration lanes, drainage and traffic control devices. Whereever, available ROW is inadequate to accommodate such service roads deceleration/acceleration lanes, etc. the additional land by the side of ROW to accommodate such service roads shall also be acquired by the new entrant Oil Company. In case of hilly/mountainous terrain, common service roads at all such locations may not be possible as per the site conditions and therefore, common access through service roads would not be a precondition."
7. This clause was examined by the Division Bench of the Madhya Pradesh High Court in W.A. No.568 of 2014, in the case of Shailendra Vs. Smt. Saroj Bhati, which has been disposed of on 24.7.2014. At paragraph-10 of the Judgment the Division Bench of the Madhya Pradesh High Court has held that the aforesaid clause permits for establishment of a retail outlet, even if the distance is less than 300 meters subject to construction and maintenance of the common service road, deceleration and acceleration lanes, drainage and traffic control devices. Thus, it is evidence that there is no absolute bar in establishing the retail outlet, as held by the respondent no.3. Not only this, the Division Bench of Punjab and Hariyana High Court in the case of Environment Society of India, Chandigarh and another Vs. Administrator, Chandigarh Administration, Union Territory, Chandigarh and others; AIR 1998 Punjab and Haryana 94 has held as follows:-
9"20. Hither-to-force, the Gas Stations/Petrol Pumps/Fuel Filing Stations have been sanctioned in areas reserved for commercial use. So is the situation in the present case. Nothing new or unusual has been done. Furthermore, what should be the distance between the two Petrol Pumps? The Indian Road Congress has undoubtedly recommended that it should be 300 mtrs. However, it is only a Page no.7 recommendation. It is not mandatory provision of law. The Administration has categorically averred that it has not adopted the recommendations. In this situation, it cannot be accused of having acted illegally in sanctioning the site for the installation of the facility in dispute."
8. Off let in the year 2014 the High Court of Allahabad in the case of Deepak Agarwal Vs. State of U.P.; Civil Misc. Writ Petition No.27184/2013, decided on 07.4.2014, have taken into consideration number of judgments and held that the submissions made by the petitioner that as per the guidelines issued by the Indian Road Congress, the retail outlet should be at a distance of 300 meters to be wholly misconceived in view the several other orders passed by the Allahabad High Court. So it is apparent from the records that the three Division Benches of different High Courts, i.e. High Court of Madhya Pradesh, Punjab and Haryana High Court and Allahabad High Court, have held that the guidelines issued by the Indian Road Congress is directory and not mandatory. Moreover, the said provision relied upon by the counsel appearing for Rabinarayan Swain do not prohibit the establishment of such retail outlet within 300 meters or 1000 meter, but it require certain other infrastructural development like deceleration/acceleration lanes, etc. So this Court hold that the Resolution of Indian Road Congress is only directory and it do not have a 10 force of delegated legislation or statutory provision and, therefore, it cannot override the fundamental right granted under Article 19(1)(g) of the Constitution of India.
9. The next two questions whether cancellation of the No Objection Certificate by opposite party nos.1 and 2 without following the principles of natural justice is void or not and the decision to cancel the No Objection Certificate should be revoked. It is clear from the records that IOCL (opposite party no.4 in W.P.(C) No.7336/2016) has been granted NOC for installing a retail outlet. It has been cancelled on the ground that the same is violative of the guidelines issued by the Indian Road Congress and no such communication has been given to opposite party no.4. This Court is of the opinion that once the District Administration issues NOC in favour of the IOCL for establishment of retail outset in the village concerned, then a right accrues in favour of the IOCL and opposite party no.4 in whose favour LOI has been issued. Any action of the District Administration in cancelling or recalling the NOC without issuing a notice of show cause and affording reasonable opportunity of hearing to the parties affected shall be violative of principles of natural justice. Hence, this Court holds that Annexure-8 requires to be quashed.
10. In that view of the matter, the order of cancellation under Annexure-8 (in W.P.(C) No.6786/2017) is illegal and needs to be quashed. Moreover, this Court is of the opinion that the alleged ground raised by the learned Addl. Government Advocate that there has been violation of guidelines of Indian Road Congress is also not tenable as the said guidelines are neither mandatory nor it totally prohibits such an establishment of Petrol Pump within the limited area. Hence, W.P.(C) 11 No.6786/2017 is allowed. The order of cancellation of NOC by opposite party no.2 under Annexure-8 is quashed. The petitioner company may proceed with the establishment of the retail outlet at the proposed site.
W.P.(C) No.7336/2016 is dismissed being devoid of any merit. Interim order passed earlier stands vacated. There shall be no orders as to costs.
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S.K.Mishra, J Orissa High Court, Cuttack Dated 30th August, 2017/A.K. Behera 12 ..........................
S.K.Mishra, J L.Mohapatra, J. I agree.
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L.Mohapatra,J
Orissa High Court, Cuttack
Dated , 2011/A.K. Behera
Behera
Behera