IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:19.02.2010 CORAM: THE HON’BLE MR. JUSTICE T.S.SIVAGNANAM W.P.No.25423/2007 & M.P.No.1/2007 & M.P.No.1/2008 1.Mrs.K.Mitchell 2.Miss.M.Mitchel ... Petitioners -vs- 1.The Joint Controller of Explosives Ministry of Commerce and Industry Petroleum and Explosives Safety Organisation No.140, Rukumani Lakshmipathi Salai Egmore, Chennai – 600 008. 2.The Commissioner of Police Office of Commissioner of Police Egmore, Chennai – 600 008. 3.The Manager Bharat Petroleum Corporation Limited No.1, Renganathan Garden 11th Main Road, Anna Nagar, Chennai – 600 040. 4.Deeka Enterprises Rep. by V.Manikandan B.P.Dealers, Pantheon Road, Egmore, Chennai – 600 008. ... Respondents Prayer: The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Mandamus to direct the first and second respondents to forthwith cancel the licence and no objection certificate issued to the third respondent in respect of the property comprised in Survey No.1285 part in Chintadripet- Pantheon Road, Egmore, Chennai-600 008, admeasuring 5844 square feet, bounded on the north by Ponniamman Koil Road, south by https://hcservices.ecourts.gov.in/hcservices/ Pantheon Road, east by vacant land bearing survey no.1285 part, west by Old Alagappa Chetty House, situated in Sub-Registration District of Periamet and Registration District of Central Chennai. For Petitioners :Mr.S.M.Loganathan for M/s.R.Deva Prasad, T.Sureka and Mr.A.Saravanan For Respondents :Mr.C.L.Balaji CGSC for R1 M/s.O.S.Santhanakrishnan for R3 M/s.M.Ganashan for R4 O R D E R By consent the Writ Petition itself is taken up for disposal. The petitioner has sought for a writ of Mandamus to direct the first and second respondents to forthwith cancel the licence and no objection certificate issued to the third respondent for the purpose of running a retail out let of the Bharath Petroleum Corporation Limited in the site owned by the petitioners. 2. It is the case of the petitioners that they are absolutely owners of the property comprised in Survey No.1285 part, Pantheon Road, Egmore, Chennai-600 008, and the said property was leased out by their predecessors in title to erstwhile Burmah Shell Oil Storage and Distribution Company of India Limited for a period of 20 years commencing from 01.10.1963 to 30.09.1983, on a quarterly rent of Rs.1,600/- for 10 years and Rs.2000/- for the next 10 years. The said Burmah Shell Company was Nationalized by Act 2 of 1976 and the right, title and interest in the said company stood transferred and vested in the Central Government. Thereafter, the rights vested in a Government Company called Burmah Shell Refineries Limited, which name was later changed to Bharath Refineries Limited and thereafter to Bharath Petroleum Corporation Limited, the third respondent herein. In terms of Section 5 (2) and 7 (2) of Act 2 of 1976, the third respondent exercised its statutory option to renew the lease for further period of 20 years by letter dated 17.08.1983 and the lease stood statutorily renewed from 01.10.1983 to 30.09.2003. The petitioners had earlier filed W.P.No.2609/1984, challenging the vires of Section 5 & 7 of Act 2 of 1976 and the writ petition came to be dismissed by this Court on 25.10.1993. Subsequently, the petitioners have filed W.P.No.34113/2003, to direct the third respondent to vacate and hand over possession of the lease hold property and pending such writ petition and interim direction was granted to pay Rs.50,000/- per month towards use and occupation of the land pending disposal of the writ petition with effect from 30.09.2003. 3. By further order dated 23.06.2004, this Court directed the third respondent corporation to pay Rs.50,000/- per month towards https://hcservices.ecourts.gov.in/hcservices/ use and occupation from 01.01.2004 within a period of six weeks. Since the third respondent did not comply with the order, the petitioners filed contempt petition No.485/2005, ultimately, the writ petition in W.P.No.34113/2003 was dismissed by the Hon'ble First Bench of this Court by order dated 04.08.2005 by holding that the petitioners have an alternative remedy by way of civil suit seeking for eviction of the respondent corporation and therefore, the writ petition was dismissed by observing that if suit is filed by the petitioners for eviction, the same will be decided expeditiously preferable within four months from the filing of the same in accordance with law, consequently contempt petition was also closed on 17.08.2005. It appears that the petitioners have not resorted to such civil remedy. The petitioners by legal notice dated 10.05.2006 issued to the respondents 1 and 2 stated that after the expiry of the lease on 30.09.2003, the third respondent corporation has no right to remain in occupation of the property and that their possession is illegal and unauthorised and amounted to criminal trespass and in the absence of a valid lease for the site, the third respondent has no right to grant licence in favour of their dealer to run a Petrol Pump in the property or to make use of the property for any other purpose. With these averments, the petitioners called upon the respondents 1 and 2 to cancel licence issued by the first respondent under the Petroleum Rules and withdraw the no objection certificate issued by the second respondent. However, no action appears to have been taken on the legal notice and subsequently by a notice dated 20.08.2006 issued under provisions of Right to Information Act, the petitioners sought for certain details. In reply to the said petition filed under the Right to Information Act, the first respondent by reply dated 12.09.2006, furnished the following details as regards the licence issued to the third respondent:- 1)The licence is valid upto 31.12.2006. 2)On receipt of notice from you on 25.05.2006, this office called for comments/clarifications from Bharat Petroleum Corporation Ltd. Chennai on the points raised in the Advocate Notice by a letter dated 26.05.2006. 3)As per rule 144(1) of petroleum rules 2002, the District Authority may verify the documents relating to the site on which petroleum premises existing/proposed about its ownership/tenancy/leese etc before giving No Objection Certificate under Rule 144 of Petroleum Rules 2002. 4)The Renewal of licences under Petroleum Rules 2002 are governed by Rule 148(1) to (8) of Petroleum Rules 2002 and it does not contemplate the licensing authority to verify the land documents for the site on which a petroleum premises is existing or proposed. But however, the Rule 152(1) of Petroleum Rules 2002, https://hcservices.ecourts.gov.in/hcservices/ stipulates that every licence granted under these rules shall stand cancelled, if the licencee ceases to have any right over the site and if there is a dispute over the right to the site, it has to be settled by due process of law. The licence shall also stand cancelled if the District Authority cancels the No Objection Certificate issued by him for the site for storing Petroleum Products under the provisions of Rule 152(2) of Petroleum Rules 2002. 5)Since the licence is valid upto 31.12.2006, the licencee is entitled to carry on legally permitted activities/business. 6)Since no specific violation of rules or conditions of licence is noticed, no action was taken for suspension/cancellation of licence under Petroleum Rules 2002. 4. Subsequently, another legal notice was sent to the second respondent on 01.02.2007 to withdraw the No Objection Certificate. Since no action was taken by the respondents 1 and 2, the petitioners are before this Court by way of the present writ petition. 5. Mr.S.M.Loganathan, learned counsel appearing for the petitioners would contend that the third respondent corporation has no right to remain in possession of the property as the lease in respect of the site has not been renewed after 30.09.2003 and consequently, the first respondent cannot grant a licence to the third respondent Corporation to run a Petrol pump and the No Objection Certificate issued by the second respondent has to be withdrawn. It is further submitted by the learned counsel that the first respondent has not passed any orders on the application submitted by the third respondent Corporation for renewal of their licence under the provisions of the Petroleum Rules 2002 and by relying upon the deeming provision under the said Rules, the third respondent and his dealer are continuing operations. The learned counsel by relying upon Rule 148(5) would submit that the authority cannot invoke the said deeming provision and is bound to consider as to whether the third respondent has a valid right to remain in possession of the site in question on which the Petroleum dealership has been established. In support of his contention, the learned counsel relied upon the decision of the Hon'ble Supreme Court in C.Albert Morris Vs. K.Chandrasekaran and Others - 2006 1 SCC 228, Hindustan Petroleum Corporation Ltd. Vs. Dolly Das - 1999 4 SCC 450, Yogesh Kumar and others Vs. Bharat Petroleum Corporation Ltd. and others - 1990 4 SCC 49 and the unreported decision of the decision of the Hon'ble First Bench of this Court in W.A.No.1725/2009 dated 08.12.2009. https://hcservices.ecourts.gov.in/hcservices/ 6. Therefore, the learned counsel appearing for the petitioner would contend that in the absence of a legal right to remain in possession of the property, the licence granted by the first respondent cannot be renewed and the No Objection Certificate issued by the second respondent is required to be withdrawn as the third respondent would have no right to store petroleum, and prayed for allowing the writ petition. 7. Per contra, Mr. O.S.Santhanakrishnan, learned counsel appearing for the third respondent Corporation after narrating as to the manner in which the lease hold right stood vested with the third respondent would submit that the writ petition itself is not maintainable, since this Court cannot issue a direction to the authorities to cancel a licence or No Objection Certificate and it is entirely within the domain of the executive and this Court cannot encroach upon such domain and the writ petition is liable to be dismissed. 8. It is further contended that this Court ordinarily will not exercise the powers of statutory authority and it will at the first instant allow the authorities to function under the statute in support of his contention, the learned counsel relied upon the decision of the Hon'ble Supreme Court in Union of India and Anr. Vs. S.B.Vohra and Ors - 2004 (1) CTC page 217, Union of India Vs. M.S.Mohammed Rawther – (2007) 12 SCC 527 and decision of the Hon'ble Division Bench of this Court in Director General of Foreign Trade, and 2004 (5) CTC 696. 9. On the question as to whether the Corporation has any legitimate right over the site in question after the expiry of lease on 30.09.2003, it is submitted that the third respondent Corporation has legitimate right to purchase the property in the event of a suit being filed by the petitioners for eviction in which the third respondent corporation is entitled to invoke the provisions of the Tamil Nadu City Tenants Protection Act. It is further submitted that the Hon'ble Division Bench of this Court dismissed the earlier writ petition filed by the petitioners in W.P.No.34113/2003 holding that the petitioners have to approach the Civil Court for eviction, but the petitioners have not resorted to such remedy and having not done so the petitioners cannot maintain the present writ petition and state that the first respondent cannot renew the licence, since the respondent has no lease hold right on and after 30.09.2003. It is further submitted that the question of canceling the No Objection Certificate issued by the second respondent does not arise, since the same was granted during 1963 and in any event the petitioner cannot maintain a writ petition for the said relief. 10. The learned counsel would further submit that the third respondent Corporation on 28.11.2006 applied to the first respondent https://hcservices.ecourts.gov.in/hcservices/ seeking renewal of explosive licence in respect of 47 licences granted for retail out lets in Chennai Territory and the subject licence is serial No.13 in the said renewal application. In response to such application, the first respondent by proceedings dated 13.10.2007 stated that since the renewal document were received in time the subject licence shall be deemed to be in force until such date the licencing authority renews the licence or until and intimation that the renewal of licence is refused as per the provisions of Rule 148(5) of Petroleum Rules 2002. Therefore, the learned counsel appearing for the third respondent would submit that the writ petition is devoid of merits and liable to be dismissed. 11. The first respondent has filed a counter affidavit stating that the licence has been periodically renewed in favour of the third respondent Corporation up to 2006 and the licensee applied for renewal for the years 2007, 2008 and 2009 and the renewal application is kept pending in the office of the first respondent in view of the Court cases. It is further stated that the licence stands current by virtue of Rule 148(5) of the Petroleum Rules 2002. 12. I have considered the submissions of the learned counsels appearing for the parties and perused the materials available on record. 13. It is an admitted fact that the lease of the site in question, which stood granted in favour of the third respondent Corporation by virtue of operation of Central Act 2 of 1976 has not been extended after 30.09.2003. The writ petition filed by the petitioners in W.P.No.34113/2003 to direct the third respondent Corporation the vacate the delivery vacant possession of the site was dismissed by the Hon'ble First Bench of this Court on 04.08.2005 by stating that the petitioner has an alternate remedy to seek eviction by filing a Civil Suit. It is not in dispute that the petitioners have not resorted to such remedy. However, it has to be noted that the present writ petition is not for evicting the third respondent corporation from the site in question, but for issue of a writ of mandamus to direct the first respondent to cancel the explosive licence granted in favour of the third respondent and to direct the second respondent to withdraw the No Objection Certificate. Therefore, the issue to be decided to the present case is as to whether the third respondent corporation has a valid licence as on date and if that be the case whether a direction can be issued to cancel the such licence and equally so in respect of the No Objection Certificate issued by the second respondent. The provision regarding grant explosive licence are regulated in terms of Rule 148 of the Petroleum Rules 2002 (The Rules for short). At this stage, it is useful to refer to Rule 148 of the Rules, which reads as follows:- https://hcservices.ecourts.gov.in/hcservices/ "148. Renewal of licence:- 1) A licence may be renewed by the authority empowered to grant such a licence: Provided that a licence which has been granted by the Chief Controller may be renewed without alteration by a Controller duly authorized by the Chief Controller. (2) Every licence granted under these rules, other than a licence in Form III or Form XVII may be renewable for three calendar years where there has been no contravention of the Act or of the rules framed thereunder or of any conditions of the licence so renewed. (3) Where a licence which has been renewed for more than one year, is surrendered before its expiry, the renewal fee paid for unexpired portion of the licence shall be refunded to the licensee provided that no refund of renewal fee shall be made for any calendar year during which:- (a) the licensing authority receives the renewed licence for surrender, or (b) any petroleum is received or stored on the authority of the licence. (4) Every application under sub-rule (2) shall be made in Form VII, Form VIII, Form IX of Form X as the case may be, and shall be accompanied by the licence which is to be renewed together with approved plans attached to the licence, wherever applicable and the renewal fee paid in the manner specified in rule 13. (5) Every application for the renewal of licence shall be made so as to reach the licensing authority at least thirty days before the date on which it expires, and if the application is so made, the licence shall be deemed to be in force until such date as the licensing authority renews the licence or until an intimation that the renewal of the licence is refused, has been communicated to the applicant. (6) Where the renewal of a licence is refused, the fee paid for the renewal shall be refunded to the licensee after deducting therefrom the proportionate fee for the period beginning from the date from which the licence was to be renewed up to the date on which renewal thereof is refused. (7) The same fee shall be charged for the renewal of licence for each calendar year as for the grant thereof: Provided that:- (i)If the application with accompaniments required under sub-rule (4) is not received within the time specified in sub-rule (5), the licence shall be renewed only on payment of a fee amounting to twice the fee ordinarily payable; (ii)If such an application with accompaniments is received by the licensing authority after the date of expiry but not later than 30 days from https://hcservices.ecourts.gov.in/hcservices/ the date of expiry, the licence may, without projudice to any other action that may be taken in this behalf, be renewed on payment of twice the fee ordinarily payable: Provided further that in case of an application for the renewal of a licence for a period of more than one calendar year at a time, the fee prescribed under clause (i) or (ii) of the first proviso, if payable, shall be paid only for the first calendar year of renewal. (8) No licence shall be renewed if the application for renewal is received by the licensing authority after thirty days of the date of its expiry." 14. Before the examining the scope an ambit of Rule 148 (5), it would be necessary to examine as to regards the facts which have to be taken note of by the first respondent while granting or renewing licence under Rule 148 in this regard. 15. The learned counsel appearing for the petitioner placed reliance on the case of C.Albert Morris, as referred supra, wherein the Hon'ble Supreme Court was considering a case of a dealer of Hindustan Petroleum Corporation and the said dealership was carried on in a site lease out by the first respondent in the said appeal to the Corporation. The Hon'ble Supreme court while examining the scope of Rule 153 (i & ii) and 144 of the Petroleum Rules 1976 dealt with the scope of "right to the site" as envisaged under Rule 153 (1) (i) and held as follows:- "The possession of this site by the erstwhile lessee does not ripen into a lawful possession merely because the landlord did not proceed with the suit for ejectment at that time, but reserved the right to bring such a suit at a later point of time. That cannot amount to an assent on his part to the continued occupation of the land under cover of a right asserted by the erstwhile lessee. The words "right to the site" in Rule 153(1)(i) must, therefore, in our opinion, be given their full meaning and the effect that unless the person seeking a licence is in a position to establish a right to the site, he would not be entitled to hold or have his licence renewed. We have already rejected the contention of Mr.L.N.Rao that the appellant tenant is a statutory tenant for the reasons recorded earlier. The lease deed is very clear as to what was leased. The lease was of vacant land. That is evident from the recitals in the plaint, legal notice, lease deed, etc. It is, therefore, not in dispute that the lease of land is not covered by the statute, the Pondicherry Buildings (Lease and Rent Control) Act, 1969 in force extending protection to the tenants." (emphasis supplied) https://hcservices.ecourts.gov.in/hcservices/ 16. The Hon'ble Supreme court held that the words "right to the site" has to be given full meaning and the effect, that unless the person seeking licence establishes a right to the site, he would not be entitled to hold or have the licence renewed under the Rules. This decision of the Hon'ble Supreme Court was sought to be distinguished by the learned counsel for the third respondent by stating that the matter relating to a eviction under the provisions of the Pondicherry Buildings (Lease and Rent Control) Act, and the appellant before the Hon'ble Supreme Court was a dealer in respect of a retail out let established on a site, which was leased out to the Petroleum Corporation. The learned counsel would further submit that even assuming the decision is made applicable to the facts of the present case, the "right to the site" has to be given the full meaning and effect and if the same is given, then the right of the third respondent to seek protection under the provision of the Tamil Nadu City Tenants Protection Act would come into play and the third respondent is entitled to even purchase the property in question in the event of the petitioners resorting to the civil remedy of eviction. In my view, the contention raised by the third respondent is not tenable. The Hon'ble Supreme Court in the case of C.Albert Morris, interpreted the provisions of the Petroleum Rules, more particularly Rule 153 (1)(i) and held that the persons seeking licence should establish that he has got a right on the site. This right on the site cannot be based on assumption, but on a valid and sustainable claim. In fact the Hon'ble Supreme Court in the case of C.Albert Morris, rejected the plea raised by the tenant, stating that he is a statutory tenant. 17. In the instant case, the third respondent would contend that in the event the petitioner resorts to filing a suit for eviction they could seek the protection under the City Tenants Protection Act. This in my view is a highly speculative proposition, since as on date there is no proceeding for eviction before any civil Court. Therefore, the corporation cannot stake its claim on presumptions. The third respondent is bound to establish before the first respondent that they have a valid and legal subsisting right on the site on the date when they seek for extension of licence. At this stage, it is useful refer to the proceedings of the first respondent dated 12.10.2007. In the said proceedings, the first respondent has not granted renewal of the licence and has only stated that the licence is deemed to be in force as per Rule 148(5) of the Petroleum Rules 2002. Therefore, the effect of such deeming provision is required to be examined and we are guided by the decisions of the Hon'ble Supreme Court in i) Municipal Corporation, Shimla Vs. Prem Lata Sood- (2007) 11 SCC 40, the Hon'ble Supreme Court held:- https://hcservices.ecourts.gov.in/hcservices/ "44. There cannot be any doubt whatsoever that an owner of a property is entitled to enjoy his property and all the rights pertaining thereto. The provisions contained in a statute like the 1994 Act and the building bye-laws framed thereunder, however, provide for regulation in relation to the exercise and use of such right of an owner of a property. Such a regulatory statute must be held to be reasonable as the same is enacted in public interest. Although a deeming provision has been provided in sub-section (1) of Section 247 of the 1994 Act, the same will have restricted operation. In terms of the said provision, the period of sixty days cannot be counted from the date of the original application, when the building plans had been returned to the applicant for necessary clarification and/or compliance with the objections raised therein. If no sanction can be granted, when the building plan is not in conformity with the building bye-laws or has been made in contravention of the provisions of the Act or the laws, in our opinion, the restriction would not apply despite the deeming provision." ii) Suresh Estates Private Limited and others Vs. Municipal