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Allahabad High Court · body

2019 DIGILAW 1047 (ALL)

Sanjay Agrawal v. State Of U. P.

2019-04-23

PANKAJ BHATIA, SHASHI KANT GUPTA

body2019
JUDGMENT : 1. The present petition has been filed by the petitioners stating that the petitioner is engaged in the transportation of Diesel (Petroleum Class B) up to 2000 litres on hire from duly installed Petrol Pumps to the different mines which are being run under lease or permit having certificate of approval for Petroleum. It is stated that the rivals of the petitioner made a false complaint to the authorities stating that the petitioner's Tanker are violating the Rules 75, 76 & 77 of the Petroleum Rules. It is stated that the District Magistrate, based upon the said complaint, made certain enquiry behind the back of the petitioners and based upon such ex-parte enquiry proceeded to pass the order dated 8.1.2019 whereby it was held that all the Tankers which are being run in violation of Rules 75, 76 & 77 of the Petroleum Rules, 2018 are wholly illegal. it was also recorded that a report was called from the Deputy Chief Controller of Explosive, Allahabad and based upon the said report, it is held that all the Tankers without any permission under Rules 76, 76 & 77 of the Petroleum Rules, 2018 are illegal and necessary action may be taken against the said person. It is this order dated 8.1.2019 which has been impugned in the present writ petition. 2. Counsel for the petitioners Sri Rahul Sripat has specifically argued that the transportation of petroleum products are governed by the Petroleum Act, 1934 and the Rules framed thereunder. 3. Section 7 of the Petroleum Act specifically provides that no license is needed for transport or storage of limited quantity of Petroleum Class B and Petroleum Class C and further Section 7 (i) of the Petroleum Act provides that for possession or transport of Petroleum Class B not exceeding 2500 litres, no permission is required. It is also specifically argued that the reference to the Petroleum Rule 2018 in the impugned order is wholly erroneous inasmuch as the said Petroleum Rules, 2018 have not been notified. It is further argued that even under the draft Rules of 2018, there is no change with regards to the works carried out by the petitioners and are not applicable in view of Section 7 of the Petroleum Act, 1934. It is further argued that even under the draft Rules of 2018, there is no change with regards to the works carried out by the petitioners and are not applicable in view of Section 7 of the Petroleum Act, 1934. The last submission of the counsel for the petitioners is that the order has been passed without providing the ex-parte report and without even affording an opportunity of hearing to the petitioner and, thus, the impugned order suffers from the vice of arbitrariness. 4. This Court had called for instructions from the standing counsel. Standing counsel has placed the instructions before us wherein it has been provided that on a complaint made against the petitioners, the District Magistrate had called for report from various authorities including the Transport Department, Chitrakoot, Fire Officer, Chitrakoot, the authorities under the Weight and Measures Act, Assistant Commissioner Trade Tax as well as from the Office of the Deputy Chief Controller of Explosive, Allahabad, in terms of the said reports called by the District Magistrate, the Deputy Chief Controller of Explosive, Allahabad has given a report that under the provisions of the Petroleum Act, 1934 read with Petroleum Rules, 2018 for transport of Petroleum products in bulk required necessary permission under Rules 75, 76 & 77 of the Rules and any transportation through the Tankers without the permission is wholly illegal. It is based upon this the report dated 10.12.2018 sent by the Deputy Chief Controller of Explosive, Allahabad, the District Magistrate proceeded to pass the impugned order dated 8.1.2019. 5. The standing counsel has argued that for transportation of Petroleum product in bulk requisite permission is required and as such has justified the passing of the order dated 8.1.2019. 6. Considering the rival submissions at the bar the questions that emerge for consideration are; Whether any permission is required for transportation of Petroleum Class B whose quantities are less than 2500 litres in terms of Section 7 of the Petroleum Act, 1934 ? Whether the District Magistrate was justified in passing the order dated 8.1.2019 placing reliance of Rules 75, 76 & 77 of the Petroleum Rules, 2018 and based upon the report of Deputy Chief Controller of Explosive, Allahabad without giving any opportunity of hearing to the petitioners ? 7. Whether the District Magistrate was justified in passing the order dated 8.1.2019 placing reliance of Rules 75, 76 & 77 of the Petroleum Rules, 2018 and based upon the report of Deputy Chief Controller of Explosive, Allahabad without giving any opportunity of hearing to the petitioners ? 7. A perusal of Section 7 of the Petroleum Act makes it clear that for transport or storage of limited quantities of Petroleum Class B or Petroleum Class C no license is required, however, Rule 75 of the Petroleum Rules, 2002 specifically provides for obtaining a license for transport of Petroleum Class A or Petroleum Class B in 'bulk'. Rule 76 of the Petroleum Rules, 2002, however, provides for restriction for loading or unloading of Tanker vehicle with any class of Petroleum and it is provided that loading and unloading can be done only at a place which is situate within the premises licensed under these Rules. Section 7 of Petroleum Act is quoted below:- "7. No licence needed for transport or storage of limited quantities of petroleum Class B or petroleum Class C.- Notwithstanding anything contained in this Chapter, a person need not obtain a licence for the transport or storage of - (i) petroleum Class B if the total quantity in his possession at any one place does not exceed two thousand and five hundred litres and none of it is contained in a receptacle exceeding one thousand litres in capacity; or (ii) petroleum Class C if the total quantity in his possession at any one place does not exceed forty-five thousand litres and such petroleum is transported or stored in accordance with the rules made under section 4." 8. Under Section 29 of the Petroleum Act, powers are conferred on the Central Government to frame Rules which are to be published in the official Gazette. Rules 75, 76 & 77 of the said Rules framed by the Central Government known as Petroleum Rules, 2002 provides for obtaining a license for transport in bulk of Petroleum Class A and Class B. Rules 75, 76 & 77 of the said Rules, are quoted herein below:- "75. Licence necessary for the transport in bulk of petroleum Classes A and B.? (1) No person shall transport petroleum Class A or petroleum Class B in bulk, by road except under and in accordance with the condition of a licence granted under these rules. Licence necessary for the transport in bulk of petroleum Classes A and B.? (1) No person shall transport petroleum Class A or petroleum Class B in bulk, by road except under and in accordance with the condition of a licence granted under these rules. (2) Nothing in this rule shall apply to the transport by railway administration of petroleum which is in its possession in its capacity as a carrier or to the transport of petroleum in the refueller, licensed under these rules between places within the same aerodrome. 76. Restriction against loading and unloading of tank vehicles.? (1) No person shall load or unload a tank vehicle with any class of petroleum except at a place which is situated within premises licensed under these rules and is approved in writing, for loading or unloading of such class of petroleum, by the Chief Controller: Provided that petroleum Class-C may be loaded or unloaded at a place where such petroleum is allowed to be stored without licence under sections 7 and 10 of the Act: Provided further that? (a) a tank wagon may be loaded or unloaded at railway sidings earmarked for the purpose; and (b) a tank vehicle may be unloaded at any other place with all due precautions against fire and under adequate supervision if such unloading is necessitated by an accident or breakdown. (2) Every tank vehicle, while it is being loaded or unloaded and until its valves have been shut and filling pipe and discharge faucets closed, shall be attended to by a person who is familiar with the rules in this Part. (3) No person shall under any circumstances allow filling or replenishment of the fuel tank of any motor vehicle or internal combustion engine directly from a tank vehicle: Provided that nothing in this sub-rule shall restrict filling or replenishment of the fuel tank of an aircraft in accordance with the rule framed under Aircraft Act, 1934 (22 of 1934). 77. Prohibition of loading of leaky or defective tank vehicles or unlicensed tank vehicles.? No person shall load? 77. Prohibition of loading of leaky or defective tank vehicles or unlicensed tank vehicles.? No person shall load? (i) any class of petroleum in tank vehicle if any tank, compartment, valve, pipes or any safety fitting thereof becomes leaky or defective and until such leaks are repaired and defects rectified and, in the case of any leak in a tank or a compartment until all the tanks or compartment are re-tested in the manner laid down in para 5 of the Third Schedule and pass the test; (ii) petroleum Class A or petroleum Class B in any tank vehicle other than a tank wagon which is not licensed under these rules." 9. A plain reading of Section 7 of the Act makes it is clear that no permission is required for storage and transport of limited quantities of Petroleum Class B or Petroleum Class C, the only conclusion that arises from the plain reading of Section 7 of Petroleum Act and Rule 75, 76 & 77 is clear that a distinction is made for storage and transport of Petroleum products in 'bulk' and for smaller quantities. The answer to the question as to what could amount to the 'bulk' quantity is clear under Section 7 (i) and sub section (ii). As the word 'bulk' has not been defined either under the Act or the Rules, the import of Section 7 makes it clear that any quantity above 2500 litres of Class B Petroleum and 45000 litres of Petroleum Class C would be termed as 'bulk'. The provisions of the Act and Rules further makes it clear that for quantities of Petroleum product which are not specified under Section 7, a permission is required under Rule 75, 76 & 77 of the Petroleum Rules. 10. We are also inclined to accept the submission of Sri Rahul Sripat that even the draft amended Rules of 2018 are not different than the Rules of 2002 in respect to the storage and transport of Petroleum product Class B and Petroleum product Class C. The Court also notes that there is no amendment in Section 7 of the Petroleum Act, 1934 and as such for transportation and storage of Petroleum products Class B, no permission is required as has been argued by Sri Rahul Sripat. We are also inclined to except the submission of Sri Rahul Sripat to the effect that in any view of the matter it was incumbent upon the District Magistrate to have granted an opportunity of hearing and the petitioners ought to have been provided with the reports relied upon by the District Magistrate prior to passing of the impugned order. 11. It is trite law that any administrative action which is likely to have an adverse affect should be passed in conformity with the principles of natural justice. 12. The Hon'ble Supreme Court has explained the principles of natural justice in the case of M/s Dharampal Satyapal Ltd. Vs. Deputy Commission of Central Excise, Gauhati & others, 2015 (8) SCC 519 , while dealing with the requirement of observance of principles of natural justice, has held as under:- "20. Though the aforesaid principles of natural justice are known to have their origin in Common Law, even in India the principle is prevalent from ancient times, which was even invoked in Kautilya's 'Arthashastra'. This Court in the case of Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors. explained the Indian origin of these principles in the following words: "Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has many colours and shades, many forms and shapes and, save where valid law excludes, it applies when people are affected by acts of authority. It is the bone of healthy government, recognised from earliest times and not a mystic testament of judge-made law. Indeed from the legendary days of Adam -and of Kautilya's Arthashastra -the rule of law has had this stamp of natural justice, which makes it social justice. We need not go into these deeps for the present except to indicate that the roots of natural justice and its foliage are noble and not new-fangled. Today its application must be sustained by current legislation, case law or other extant principle, not the hoary chords of legend and history. Our jurisprudence has sanctioned its prevalence even like the Anglo-American system". 21. Aristotle, before the era of Christ, spoke of such principles calling it as universal law. Justinian in the fifth and sixth Centuries A.D. called it 'jura naturalia', i.e. natural law. 25. Our jurisprudence has sanctioned its prevalence even like the Anglo-American system". 21. Aristotle, before the era of Christ, spoke of such principles calling it as universal law. Justinian in the fifth and sixth Centuries A.D. called it 'jura naturalia', i.e. natural law. 25. It is on the aforesaid jurisprudential premise that the fundamental principles of natural justice, including audi alteram partem, have developed. It is for this reason that the courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made and infraction thereof has led to the quashing of decisions taken. In many statutes, provisions are made ensuring that a notice is given to a person against whom an order is likely to be passed before a decision is made, but there may be instances where though an authority is vested with the powers to pass such orders, which affect the liberty or property of an individual but the statute may not contain a provision for prior hearing. But what is important to be noted is that the applicability of principles of natural justice is not dependent upon any statutory provision. The principle has to be mandatorily applied irrespective of the fact as to whether there is any such statutory provision or not. De Smith captures the essence thus -"Where a statute authorises interference with properties or other rights and is silent on the question of hearing, the courts would apply rule of universal application and founded on plainest principles of natural justice". Wade also emphasizes that principles of natural justice operate as implied mandatory requirements, non-observance of which invalidates the exercise of power. In Cooper v. Sandworth Board of Works, the Court laid down that: '...although there is no positive word in the statute requiring that the party shall be heard, yet justice of common law would supply the omission of Legislature". Exhaustive commentary explaining the varied contours of this principle can be traced to the judgment of this Court in Managing Director, ECIL, Hyderabad & Ors. v. B. Karunakar & Ors., wherein the Court discussed plenty of previous case law in restating the aforesaid principle, a glimpse whereof can be found in the following passages: "20. Exhaustive commentary explaining the varied contours of this principle can be traced to the judgment of this Court in Managing Director, ECIL, Hyderabad & Ors. v. B. Karunakar & Ors., wherein the Court discussed plenty of previous case law in restating the aforesaid principle, a glimpse whereof can be found in the following passages: "20. The origins of the law can also be traced to the principles of natural justice, as developed in the following cases: In A.K. Kraipak v. Union of India, (1969) 2 SCC 262 : (1970) 1 SCR 457 , it was held that the rules of natural justice operate in areas not covered by any law. They do not supplant the law of the land but supplement it. They are not embodied rules and their aim is to secure justice or to prevent miscarriage of justice. If that is their purpose, there is no reason why they should not be made applicable to administrative proceedings also especially when it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial ones. An unjust decision in an administrative inquiry may have a more far reaching effect than a decision in a quasi-judicial inquiry. It was further observed that the concept of natural justice has undergone a great deal of change in recent years. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the inquiry is held and the constitution of the tribunal or the body of persons appointed for that purpose. Whenever a complaint is made before a Court that some principle of natural justice has been contravened, the Court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. The rule that inquiry must be held in good faith and without bias and not arbitrarily or unreasonably is now included among the principles of natural justice. 21. In Chairman, Board of Mining Examination v. Ramjee, (1977) 2 SCC 256 , the Court has observed that natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. The rule that inquiry must be held in good faith and without bias and not arbitrarily or unreasonably is now included among the principles of natural justice. 21. In Chairman, Board of Mining Examination v. Ramjee, (1977) 2 SCC 256 , the Court has observed that natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. The Courts cannot look at law in the abstract or natural justice as mere artifact. Nor can they fit into a rigid mould the concept of reasonable opportunity. If the totality of circumstances satisfies the Court that the party visited with adverse order has not suffered from denial of reasonable opportunity, the Court will decline to be punctilious or fanatical as if the rules of natural justice were sacred scriptures. 22. In Institute of Chartered Accountants of India v. L. K. Ratna, (1986) 4 SCC 537 , Charan Lal Sahu v. Union of India, (1990) 1 SCC 613 (Bhopal Gas Leak Disaster Case) and C. B. Gautam v. Union of India, (1993) 1 SCC 78 , the doctrine that the principles of natural justice must be applied in the unoccupied interstices of the statute unless there is a clear mandate to the contrary, is reiterated." 13. In his separate opinion, concurring on this fundamental issue, Justice K.Ramaswamy echoed the aforesaid sentiments in the following words: "61. It is now settled law that the proceedings must be just, fair and reasonable and negation thereof offends Articles 14 and 21. It is well settled law that principles of natural justice are integral part of Article 14. No decision prejudicial to a party should be taken without affording an opportunity or supplying the material which is the basis for the decision. The enquiry report constitutes fresh material which has great persuasive force or effect on the mind of the disciplinary authority. The supply of the report along with the final order is like a post mortem certificate with putrefying odour. The enquiry report constitutes fresh material which has great persuasive force or effect on the mind of the disciplinary authority. The supply of the report along with the final order is like a post mortem certificate with putrefying odour. The failure to supply copy thereof to the delinquent would be unfair procedure offending not only Arts. 14, 21 and 311(2) of the Constitution, but also, the principles of natural justice." 28. In the case of East India Commercial Company Ltd., Calcutta & Anr. v. The Collector of Customs, Calcutta, this Court held that whether the statute provides for notice or not, it is incumbent upon the quasi-judicial authority to issue a notice to the concerned persons disclosing the circumstances under which proceedings are sought to be initiated against them, failing which the conclusion would be that principle of natural justice are violated. To the same effect are the following judgments: (a) U.O.I. & Ors. v. Madhumilan Syntex Pvt. Ltd. & Anr. (b) Morarji Goculdas B & W Co. Ltd. & Anr. v. U.O.I. & Ors. (c) Metal Forgings & Anr. v. U.O.I. & Ors. (d) U.O.I. & Ors. v. Tata Yodogawa Ltd. & Anr. 29. Therefore, we are inclined to hold that there was a requirement of issuance of show-cause notice by the Deputy Commissioner before passing the order of recovery, irrespective of the fact whether Section 11A of the Act is attracted in the instant case or not. 35. At the same time, it cannot be denied that as far as Courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in the case of Managing Director, ECIL (supra) itself in the following words: "Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/ Tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/ Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as it regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Court/Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment." 14. In the present case the District Magistrate has neither supplied the copies of the reports nor did he provide any opportunity of hearing before passing of the order dated 8.1.2019. An opportunity of hearing by the District Magistrate could have avoided this litigation inasmuch as no attention was given in the impugned order to the provisions of Section 7 of the Petroleum Act, 1934 and the order was passed only on the reading of Rule 75, 76 & 77 of the Petroleum Rules, 2018 completely overlooking the distinction between 'bulk' quantity or less than 'bulk' quantity. No effort was made by the District Magistrate, nor is it reflected in the impugned order as to what quantity of storage and transport require the obtaining of a license. All these questions, if given an opportunity to the petitioners, could have lead to different orders. 15. Considering the submissions made at the bar and the provisions of the Act and Rules as well as the findings recorded above, we are constraint to quash the order dated 8.1.2019. Accordingly, the order dated 8.1.2019 passed by respondent no.2, the District Magistrate, Chitrakoot (Annexure-1 to the writ petition) is hereby quashed. 15. Considering the submissions made at the bar and the provisions of the Act and Rules as well as the findings recorded above, we are constraint to quash the order dated 8.1.2019. Accordingly, the order dated 8.1.2019 passed by respondent no.2, the District Magistrate, Chitrakoot (Annexure-1 to the writ petition) is hereby quashed. However, the District Magistrate, Chitrakoot is free to make an enquiry pertaining to the storage and transport of Petroleum products Class B and pass a reasoned order in accordance with law after affording an opportunity of hearing to the affected persons, if he so desires. 16. Accordingly, the writ petition is allowed.