SCA/8116/2005 1 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8116 of 2005 with Special Civil Application Nos. 8117 of 2005 and 8118 of 2005 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.MEHTA ===================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?Yes 2 To be referred to the Reporter or not ?Yes 3 Whether their Lordships wish to see the fair copy of the judgment ?No 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?No 5 Whether it is to be circulated to the civil judge ?No ===================================================== FEDERATION OF GUJARAT PETROLEUM DEALERS ASSOCIATION & 2 - Petitioner(s) Versus STATE OF GUJARAT & 11 - Respondent(s) Appearance : MR HARIN P RAVAL for Petitioner(s) : 1 - 3. MR. A.D. OZA, G. P. with Mr.L.R. Poojari, AGP, for Respondent(s) : 1,2,4&5 NOTICE SERVED BY DS for Respondent(s) : 6, MR JITENDRA MALKAN for Respondent(s) : 3 MR KS NANAVATI with MR.Chudgar for Respondent(s) : 7 - 10, 12, SCA/8116/2005 2 JUDGMENT MR GN SHAH for Respondent(s) : 11, MS MINOO A SHAH for Respondent(s) : 11, ===================================================== CORAM : HONOURABLE MR.JUSTICE K.M.MEHTA Date : 20/02/2006 CAV JUDGMENT 1. Federation of Gujarat Petroleum Dealers Association, petitioner (in Petition No.8116/2005) has filed this petition under Article 226 of the Constitution of India with following prayers. (i) that this Court may issue an appropriate writ, order or direction quashing and setting aside Circular dated 10.2.2003 (hereinafter referred to as “the said Circular”) issued by the Revenue Department, Government of Gujarat. (ii) that this Court may quash and set aside the letter dated 17.12.2004 issued by the State of Gujarat to the Collector, Mehsana, clarifying the norms relating to encroachment by the existing retail outlets. SCA/8116/2005 3 JUDGMENT (iii) that this Court may issue direction against the respondent Government i.e. State of Gujarat, respondent No. 1, and respondent Nos. 7 - Reliance Industries Limited; respondent No. 8 - Essar Oil Limited; respondent No. 9 – Indian Oil Corporation Ltd.; respondent No. 10 - Bharat Petroleum Corporation Ltd.; respondent No. 11 – Hindustan Petroleum Co. Ltd.; and respondent No. 12 – IBP Company Ltd., for strictly enforcing the norms as laid down in guidelines issued by the Town Planning and Valuation Department of the Government of Gujarat dated 17.7.1980 by the Secretary, Revenue Department of Government of Gujarat so far as it relates to installation of petrol pumps. (iv) that this Court may issue direction for strict enforcement of the norms as laid down in the letter dated 25.9.2003/17.10.2003 at Annexure-B and more particularly as set out in Appendix-I and other accompaniments to the said norms in the matter of construction and installation of retail outlets of national SCA/8116/2005 4 JUDGMENT highways. (v) that this Court may be pleased to issue directions restraining the respondent Oil Companies from starting construction for installation of petrol/diesel pumps without obtaining prior permission from the National Highways Authorities or the Urban Development Authorities and Area Development Authorities established under Gujarat Town Planning and Urban Development Act and the Rules framed thereunder so far as it relates to the petrol/diesel pumps. (vi) that this Court may issue orders directing respondent No. 1 – State of Gujarat, respondent No. 2 – the Secretary, Govt. of Gujarat, Road and Building Department and respondent No. 3 – Union of India through the Secretary, Ministry of Petroleum and Natural Gas, New Delhi to issue immediate orders to the Collectors and other appropriate authorities including the National Highway Authorities and SCA/8116/2005 5 JUDGMENT the State Highway Authorities for prohibiting construction and installation of retail outlets for petrol/diesel pumps and/or petrol pump-cum- service stations in respective Districts by the Collector. (vii) that this Court may be pleased to issue direction or order directing the Urban Development Authority and /or Area Development Authority of the State of Gujarat to forthwith direct stoppage of construction and installation of retail outlet by the respondent Oil Companies by themselves or through their dealers without obtaining prior permission required under Law and the Government Resolutions issued by the Central Government as well as Circulars issued by the State Government referred to earlier. (viii) During the pendency of the petition the petitioner has amended the petition and also added prayer 46(jj) and 46(jjj). 2. The aforesaid petition was filed on 25.4.2005. SCA/8116/2005 6 JUDGMENT It was placed before this Court (Coram: M.R. Shah, J) on 5.5.2005 when this Court issued notice returnable on 13.6.2005. The Court did not grant any interim relief on that day. Thereafter, the matter was placed for hearing before this Court from time to time. 3. On behalf of the petitioner Mr. Harin P. Raval, learned advocate, has appeared. He has argued the matter at great length and with remarkable ability. On behalf of the State Government Mr. A.D. Oza, learned Government Pleader with Mr.L.R.Poojari, learned AGP appears. Mr. Jitendra Malkan, Additional Solicitor General, appears for respondent No. 3 Union of India. Mr. K.S. Nanavati, learned sr. counsel with Mr. Chudgar, learned advocate, appears for respondent Nos. 7, 10 and 12. Mr. G.N. Shah, learned advocate with Ms. Minu Shah, appears for respondent No. 11 and other respondents have been served. With the consent of the parties the matters have been taken up for final disposal. Hence Rule. The learned counsel for the respective respondents waive service of rule. SCA/8116/2005 7 JUDGMENT 4. The facts giving rise to these petitions are as under: 4.1 The petitioner is a Federation of Petrol/Diesel Dealers Association of the State of Gujarat. Dealers dealing in petrol/diesel are members of the petitioner Federation. Petitioner Nos. 1 and 2 are honorary Secretary and honorary Joint Secretary of petitioner No. 1. During the pendency of the petition, the petitioner has also moved a draft amendment and the same was allowed and the petition is accordingly amended. 4.2 Mr. Harin P. Raval, learned advocate for the petitioner has made the following submissions: 4.3 It is the case of the petitioner that the Planning and Valuation Department of Government of Gujarat has issued necessary guidelines. The said guidelines are issued by the Revenue Department of Government of Gujarat vide resolution dated 17.7.1980 regarding permission to be obtained SCA/8116/2005 8 JUDGMENT before construction of a Motor Fuel Filling Station. The State Government also issued relevant regulations for Motor Fuel Filling-cum-Service station. The Indian Roads Congress in its recommended practice for location and lay out of road side Motor Fuel Filling and Motor Fuel Filling-cum-Service Station has laid down the norms which are accepted by the Central Government as well as State Government. The said has been published in 1983. 4.4 The petitioner also referred to the guidelines published by the State of Gujarat in the Government Resolution dated 17.7.1980 (page 104) of the Revenue Department containing Rules and Conditions so as to provide for maintenance of the Urban Development Rules and prevent its breach thereof. The said Regulations contain the minimum distance to be maintained from the Centre of the road before starting construction in various kinds of land according to the location of the land being situated on National Highways, border highways, State Highways and the main District Roads, as well SCA/8116/2005 9 JUDGMENT as other Road and Rural Roads. 4.5 The petitioner has also produced letter of Government of India, Ministry of Road, Transport and Highways dated 25.9.2003/17.10.2003 (page 77- 80) addressed by the Chief Engineer for Director General (Road Development) & Special Secretary to all Chief Secretaries/Secretaries (PWD Roads) of all State Governments/UTs dealing with National Highways and Centrally Sponsored Schemes by which the Government has accepted the norms issued by the Indian Roads Congress (for short “IRC”). The petitioner has relied on paragraphs 1 to 7 of the said letter. 4.6 After relying upon the letter dated 25.9.2003/17.10.2003 the petitioner has stated that a bare perusal of the said letter which is addressed to all the Chief Secretaries of the State Governments as well as to the Union Territories and other authorities named therein clearly go to show that the norms stipulated by the Indian Roads Congress are accepted for being strict enforcement SCA/8116/2005 10 JUDGMENT and scrupulous following by the Union Ministry. The norms referred to in the said letter dated 25-9- 2003/17-10-2003 are in modifications of the earlier norms. The norms referred to in the said letter clearly reflect that the petrol/diesel retail outlets to come up in non-Urban Rural stretches, as well as in Urban stretches unless the minimum distance from an intersection as laid down in para 6.1.1 (i, ii and iii) which is of 1000 metres, 300 metres, and 100 metres is maintained). Similarly, for Urban stretches there is restriction for two fuel stations, which is of 300 metres and 100 metres is maintained) as laid down in para 6.1.2.1 (a) for Urban area with population of more than 20,000 and less than one lakh in para 6.1.2.(b) for Urban areas with population of one lakh and above 100 metres from intersection with any category of road (irrespective of carriageway width). Similarly, the said norms prescribed under para 6.2 minimum distance between two fuel stations along with National Highway to be 300 metres in case of undivided carriageway in plain and rolling terrain in non-Urban (Rural) Areas and 1000 metres of SCA/8116/2005 11 JUDGMENT divided carriageway (with no gap in median at this location and stretch) in case of plain and rolling terrian in non-Urban (Rural) areas. 4.7 The learned advocate further submitted that similarly the minimum plot size of a fuel station is also mentioned in para 6.4 of the said letter. Para 7 of the said letter provides that the norms would be applicable to all the new fuel stations from the date of issuance of the said circular. It is stated that the said documents provide that the norms are applicable to all fuel stations with or without other user facilities of rest areas, along with undivided carriageway and divided carriageway sections of National Highways in plain, rolling and hilly terrain and passing through urban stretches. It also provides for minimum plots size for fuel station. It also provides the list of documents to be submitted for getting approval for installation of new Fuel Station along National Highways. 4.8 On the basis of the aforesaid documents, the learned counsel for the petitioner submitted that SCA/8116/2005 12 JUDGMENT the norms stipulated by the Indian Roads Congress are accepted by the State of Gujarat. It was also submitted that these norms have to be scrupulously and strictly in force followed. It was submitted that unless prior appropriate permission from the concerned Collector, District Development Officer in consultation with the Executive Engineer concerned is not obtained then, the new installation of petrol pumps commissioning and construction cannot be permitted. It also lays down that for violation of requirement of taking permission strict action against the concerned officer would be taken. It is also stated that para 9 states that any permission as an exception to the provisions contained in para 9 or any provisions of the said Government Resolution can only be granted by the Government and that too with the prior consent of the Revenue Department, as well as, of the Road and Building Department. The procedure prescribed for obtaining permission in such exceptional cases is to require such proposals from the Collector and / or District Development Officer to be forwarded to the Government with SCA/8116/2005 13 JUDGMENT details as are set out in the said Resolution. It is also stated that the purpose for which the Urban Development Rules are framed are strictly enforced and directions are issued by the District Collectors and District Government Officer and other Officers to seek a very strictest enforcement. 4.9 It is submitted that similarly, in exercise of powers conferred under Section 17(i) (ii) (a) of the Gujarat Town Planning and Urban Development Act, 1976, after the publication of a draft development plan under Section 13, invitation of objections and suggestions under Section 14 are required. After it is submitted to the State Government for approval under Section 16 of the Gujarat Town Planning and Urban Development Act, 1976, and on the State Government having sanctioned the same in exercise of powers under Section 17(1) (a) to (2)(a), the Ahmedabad Urban Development Authority has framed the General Development Control Regulations which are published in the Government Notification dated 18.5.2002. The said SCA/8116/2005 14 JUDGMENT notification is modified by the corrigendum Notification dated 8.10.2002. 4.10 On the basis of the above, the petitioner has made the following submissions that these General Development Control Regulations are sanctioned by the State Government together with sanction of a draft development plan and therefore these are statutory provisions. That para 20 contains the provisions for gasoline filling-cum-service station. 4.11 The learned advocate stated that a bare perusal of these documents clearly show that all new installation and commissioning and constructions of fuel stations are required to be in consonance with the norms stipulated by the Indian Road Congress, the Urban Development Rules, as published by the Town Planning and Valuation Department of State of Gujarat and with respect to area fall in within the Urban Development Authority such as Ahmedabad Urban Development Authority, as per the General Development Control Regulations. SCA/8116/2005 15 JUDGMENT The above mentioned submissions are with respect to the first facet of the petitioner where the relief prayed for by the Federation is to seek enforcement of various norms, guidelines and rules in the matter of maintenance of distances, locations and let out of new petrol/diesel retail outlets and requirement of obtaining permission of National Highways Authorities, as well as other authorities as stipulated in the Circular. Second Facet of the petitioner's argument: 4.12 It is submitted that the second facet of the petition is to challenge to the arbitrary, illegal and unlawful stand of the State Government as contained in the Resolution/Circular dated 10.2.2003 issued by the Revenue Department. The same is issued on misinterpretation of provisions of Section 48 as well as Section 65(A) and Section 65(B) of the Bombay Land Revenue Code. The State Government has issued a circular dated 10/2/2003 through the Revenue Department that by misinterpreting the various provisions of Bombay SCA/8116/2005 16 JUDGMENT Land Revenue Code. In view of this a deemed N.A. Permission is sought to be made applicable to all new retail petrol/diesel outlets on the ground that it falls within the scope and ambit of a bona fide industrial purpose. This is sought to be done by misinterpreting that petrol is petrochemical industry and storage of petro amount to storage of petrol chemicals. This Circular provides for an incorrect factual basis since petrol is not a petrochemical. 4.13 The learned advocate has stated that in the aforesaid Resolution the State Government has relied on the term “petrochemical” as well as “petroleum” which is defined in Hawley's Condensed Chemical Dictionary 2003, 13th Edition, page 855 as well as Law Dictionary and Concise Encyclopedia, 3rd Revision, 8th Edition, Vol. 3, page 2579 as well as Halsbury's Law of England, 4th Edition, Vol. 35 particularly para 1202 at page 662. The learned advocate has also relied on the Petroleum Act, 1934 and the Indian Explosives Act, 1884 in this behalf. SCA/8116/2005 17 JUDGMENT 4.14 After relying on the definition of “petrochemical” and “petroleum”, the learned counsel has made the following submissions: 4.15 In view of the above, it is clear that petrol is final product and cannot be considered to be petrochemical. Therefore, by misinterpreting the fact that storage of petrol amount to storage of petrochemical benefit of deemed N.A. Permission while considering it as bona fide industrial use is extended by the Government of Gujarat. It is alleged that the said circular is issued to benefit the private Oil Companies viz., Essar Oil Company. Since, on behalf of the Government Oil Companies, a clear statement is made in the affidavit as well as at the bar that they are first applying for and getting N.A. Permission. Therefore, it is clear that the action of the Government is to benefit these two private entrepreneurs. 4.16 In support of his submissions, the learned advocate has relied of certain provisions of the Bombay Tenancy and Agricultural Lands Act and Bombay Land Revenue Code. Similarly, there is SCA/8116/2005 18 JUDGMENT restriction contained in Section 6 of the Bombay Tenancy and Agricultural Lands Act which prohibits transfer to non-agriculturist including being a sell in execution of decree for grant of decree of Civil Court or for recovery of arrears of land revenue. Section 43 of the Bombay Tenancy and Agricultural Lands Act, 1948, as applicable to the State of Gujarat provides for restriction on the retransfer of land purchased or sold under the said Act. That tenure of lands is two types, viz., old tenure which is freely transferable, new and impartable tenure which is restricted tenure. That most of the land are new and impartable tenure granting thereto those lands cannot be sold, transferred or dealt with except in accordance with the manner prescribed under the provisions of law and that too after obtaining prior permission of converting the tenure from new and impartable tenure to old tenure, which can be done only after prior permission being granted and on payment of conversion charges for the change of tenure. The Government of Gujarat by issuing the Circular dated 10.2.2003 the provisions contained in the SCA/8116/2005 19 JUDGMENT Bombay Tenancy Act is clearly given go by. That this restriction is given on the title by virtue of the said circular dated 10.2.2003 and therefore the Circular is contrary to the statutory provisions as it interferes with and nullifies the fact of statutory provisions contained in Sections 43, 48 and 63 of the Bombay Tenancy and Agricultural Land Act. 4.17 The learned counsel submitted that Section 48 of the Bombay Land Revenue Code provides that there is a restriction for use of agricultural land for any other non-agricultural purpose and Section 61 of the Code prohibits any person from unauthorised occupation and user of the land in contravention of the permitted user. 4.18 That Section 65 of the Bombay Land Revenue Code (hereinafter referred to as “the Code”) provides the uses to which the occupant of a land for the purpose of agricultural may put his land. Procedure is prescribed under Section 65(1) of the Code, if the occupant wishes to apply his land to SCA/8116/2005 20 JUDGMENT any other purpose which contemplates, the making application to the Collector to seek his permission and the Collector embarking upon an inquiry before granting such permission. Such application can be made by the occupant alone and not by a transferee. That grant of permission for change of use from agricultural to non-agricultural necessarily contemplates, the payment of premium which is it popularly known. 4.19 The Section 65(A) of the Code is applicable where land is already held as non-agricultural purpose of one kind and where the occupant wishes to apply his land to hold another non-agricultural purpose. Even in such a case, prior permission is required to be applied for and granted. Therefore, no reliefs can be given under Section 65A of the Code to grant benefit of another which is granted by the circular dated 10/2/2003. The Section 65B of the Code provides for procedural use certain lands for bona fide industrial purpose. That only on the fulfillment of the following conditions notwithstanding anything contained in Section 65 or SCA/8116/2005 21 JUDGMENT Section 65A the provisions of Section 65(B) will be applicable viz. (1) that the land used or held for the purpose of agricultural or non-agricultural purpose not being an industrial purpose is (i) designated for the use of industrial purpose in the draft or final development plan or draft or final town planning scheme sanctioned under the Gujarat Town Planning and Urban Development Act, 1976 (hereinafter referred to as “Town Planning Act”) or (ii) in case where no such land is situate, where no such plan or scheme is referred in force it is designated by the State Government by notification in the Official Gazette for the use of such industrial purpose. 4.20 After relying upon Sec.65(B)(1) of the Code, the learned counsel has made the following submissions: 4.21 It is clear that only on fulfillment of above mentioned statutory provisions where any land held for agricultural purpose or non-agricultural purpose is designated for an industrial purpose in SCA/8116/2005 22 JUDGMENT any draft, final development plan or all final town planning scheme or where there is no such scheme in force is so designated by notification in the Official Gazette for use of industrial purpose only then Section 65B of Tenancy Act will apply. 4.22 Another statutory condition required to be fulfilled for applicability of Section 65(B) of the Code is fulfillment of the conditions prescribed in Section 65D of the Code. It is therefore, clear that the Circular dated 10/2/2003 purports to override statutory provisions by conferring benefits of deemed N.A., contrary to statutory provisions. Since it is made general in application without land being so designated for industrial purpose in any draft for final development plan or draft of final town planning scheme, or without it being so notified in the official gazette exist as provided under Section 65(B)(a)(ii). 4.23 Even, otherwise the storage of petroleum or petroleum products cannot be classified as storage of petrochemical products. Therefore, also illegal SCA/8116/2005 23 JUDGMENT arbitrary and invalid and unlawful manner, benefit of deemed N.A. is or to be conferred. 4.24 The learned counsel has submitted that the challenge to the circular dated 10/2/2003 requires to be upheld and the circular deserves to be quashed and set aside as being violative of the statutory provisions and is being contrary to law and therefore illegal, invalid, arbitrary and violative of Article 14 of the Constitution of India. Third Facet of argument of petitioner: 4.25 The argument made by the learned counsel for the petitioner is that the third facet of the petition emanates from the policy as laid down in the resolution of the Ministry of Petroleum and Natural Gas, Government of India, published in the Gazette of India in Part I – Section I dated 8.3.2002 and published on 8.3.2002 which is on page 117 of the petition. The said Resolution points out that on the Government of India deciding to dismantling Administered Pricing Mechanism (APM) in SCA/8116/2005 24 JUDGMENT a phased manner, a group of Ministers for working out a specific framework for developing “India Hydrocarbon Vision 2025” was set up. The group submitted its report on 23.3.2000 which inter alia recommended to set up mechanisms to enable new entrants to establish own distribution networks of marketing without encroaching on the retail networks or the existing marketing companies. 4.26 Thus, it is clear that the policy of enforcement whereby the legitimate expectation of the petitioner and all citizens envisages the setting up of mechanism in the matter of establishment of own distribution networks without encroaching on the retail network of existing marketing. 4.27 It is only a fulfillment of conditions which are prescribed in para 3 I and II of the Circular dated 8.3.2002 which is on page 117 that promotion to establish own distribution networks for marketing can be established. SCA/8116/2005 25 JUDGMENT 4.28 The learned advocate for the petitioner has invited attention of the Court to the Circular/Resolution dated 8.3.2002. Under the said Resolution, the Oil Company eligible to have benefit of the said policy and can only set up its own distribution set up meaning thereby setting up Company Retail outlets and under guise of setting up of distribution network they cannot appoint retail dealers. This is apparent from the provisions contained in para 3, 9, and 10 of the said resolution dated 8.3.2002. It is stated that by misinterpreting the said circular dated 8.3.2002, the State Government has issued Circular dated 12.3.2004 which a bare reading shows that