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2025 DIGILAW 460 (TS)

Reliance BP Mobility Limited v. Union of India

2025-04-29

N.V.SHRAVAN KUMAR

body2025
ORDER : N.V.SHRAVAN KUMAR, J. Heard Sri.S.Ravi, learned senior counsel appearing for the petitioner and Ms.NVR.Rajya Lakshmi, learned standing counsel appearing for respondent Nos.1 to 3. With the consent of the parties, the writ petition is being taken up for disposal at the admission stage itself. 2. This writ petition has been filed seeking the following prayer:- “to declare the action of the Respondent No.2 in suspending the license of the Petitioner bearing No.P/SC/TG/14/4237 vide Order dated 21.03.2025 as arbitrary, illegal, and in violation of Article 14 and Article 19 of the Constitution of India.” 3. Brief facts as stated in this writ petition are that petitioner is a public limited company incorporated on 23.03.2015, registered under the provision of Companies Act, 2013. The respondent No.1 has issued marketing authorization to Reliance Industries Limited to market transportation fuels- petrol and diesel in retail in India. Subsequently, the Reliance Industries Limited, vide dealership agreement dated 14.03.2005, has appointed M/s.Shiva Krishna Filling Station, as its dealer for the retail and supply of certain products and services using reliance equipments. Thereafter, the Reliance Industries Limited has also entered into a registered lease deed dated 14.03.2005 with M/s.Shiva Krishna Filling Station, with respect to land admeasuring 2246.00 Sq.meters or 2686.098 Square yards, in Sy.No.477/13, 477/1, situated at Garmilla Village, Mancherial Mandal and Municipality, Adilabad District, the said premises is used as storage depot or a service station for the purpose of selling or otherwise dealing in or of receiving, storing, treating or handling for distribution of petroleum or any of this productions. The terms of the lease deed dated 14.03.2005 is for a period of 20 years and the Clause 3(viii) of the said lease deed entitles the lessee to an absolute right of renewal of the lease for a further equivalent terms of 20 years at same rent and on same terms and conditions. 4. Further case is that on 24.02.2020, the Reliance Industries Limited filed an application and requested respondent No.1 to transfer its marketing rights to the petitioner and the respondent No.1 vide letter dated 31.03.2020, has approved the same and the petitioner was permitted to exercise the marketing rights i.e., to market Motor Spirit (MS) and High Speed Diesel (HSD) for retail marketing. Thereafter, the Reliance Industries Limited vide Assignment Agreement dated 07.05.2020, assigned its business of owning, operating, conducting petroleum retail marketing and related activities in the States of Andhra Pradesh and Telangana including its rights, entitlements, liabilities, covenants and obligation under the Dealership Agreement in favour of the petitioner. Subsequently, the Reliance Industries Limited, executed a Assignment of lease deed dated 29.08.2020, wherein the right, title, interest and obligations of the Reliance Industries Limited arising out of lease deed dated 14.03.2005 was also assigned to the petitioner. Later, the petitioner on 28.11.2021 made an application and requested respondent No.3 to renew the petitioner’s licence up to 31.12.2031 and respondent No.3 vide letter No.P/SC/TG/14/4237 (P137190) dated 02.12.2021 has renewed the licence and directed the petitioner to strictly follow the procedure as laid down in Rule 148 of the Petroleum Rules, 2002 and submit complete documents for the renewal of the licence to Jt.Chief Controller of Explosives, Hyderabad on or before 31.12.2031. 5. Learned senior counsel appearing for the petitioner would submit that as per the scheme under the Petroleum Rules, 2002 promulgated under the Petroleum Act, 1934, one of the essential requirements for operating a petroleum retail outlet in India is to obtain a storage license from the Chief Controller of Explosives, Petroleum and Explosives Safety Organisation (PESO) and on account of breach of terms of dealership agreement by M/s.Shiva Krishna Filling Station (hereinafter referred as ‘the dealer’) and adhering to the above condition, the petitioner vide termination letter dated 27.01.2023, terminated the dealership agreement dated 14.03.2005 and thereafter, the petitioner continued to operate the retail outlet directly. Learned counsel would further submit that the petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 had filed Commercial Arbitration petition (L) No.4092 of 2023, seeing relief against the dealer and the Bombay High Court vide order dated 27.02.2023 has disposed of the same by observing the following:- “8) While passing order for appointment of Sole Arbitrator, it is necessary that the Petitioner deserve protection, to the effect that the Respondent and it representative, employees, servants, etc and or any persons claiming through, shall restrain themselves, from creating any disturbance or any nuisance of whatsoever nature and prevent the operation/RO or restrain representative, employees of the petitioner from entering into it at any point of time and in any manner interfering with the business of petroleum dealership, which is continued by the petitioner.” 6. Learned senior counsel would submit that on 14.11.2024, the dealer had sent two undated letters to responded No.3 and thereafter, respondent No.3 issued show cause notices dated 22.05.2024, wherein the petitioner was directed to submit clarification along with requisite documents providing legal possession over the subject premises and in the second show cause notice, the petitioner was directed to submit clarification regarding its license which was renewed up to 31.12.2031. It is further submitted that the said show cause notices were not received by the petitioner and when the petitioner in the first week of February, 2025, had visited the office of responded No.3 for routine work, came to know about the aforesaid show cause notices dated 22.05.2024 and on 17.02.2025, petitioner submitted a detailed reply to the show cause notices dated 22.05.2024. Thereafter, the respondent No.3 issued letter dated 20.02.2025, directing the petitioner to submit the renewed lease deed within 30 days from the date of issuance of the letter. Subsequently, the petitioner issued a notice to the lessor calling upon him to come forward and execute a lease in favour of the petitioner as agreed under clause 3(Viii) of the lease deed dated 14.03.2005. When the lessor did not come forward, petitioner for specific performance filed O.S.No.72 of 2025 and the same is pending before the Principal Junior Civil , Judge, Mancherial. 7. When the lessor did not come forward, petitioner for specific performance filed O.S.No.72 of 2025 and the same is pending before the Principal Junior Civil , Judge, Mancherial. 7. Learned senior counsel would submit that the petitioner vide letter dated 19.03.2025, had brought to the notice of respondent No.3 about the order passed by the Bombay High Court in Commercial Arbitration petition (L) No.4092 of 2023 dated 27.02.2023 and further informed about the pending O.S.No.72 of 2025 and requested the respondent No.3 not to initiate any precipitating action that may disrupt the RO operation. It is further submitted that respondent No.3, without considering the petitioner’s reply dated 17.02.2025 and letter dated 19.03.2025, issued impugned order No.P/SC/TG/14/4237 (P137190) dated 21.03.2025 and suspended the petitioner’s licence. Aggrieved by the same this writ petition is filed. 8. Learned senior counsel for the petitioner would submit that earlier the respondent No.1, had issued office memorandum dated 06.02.2024, relevant portion is extracted hereunder:- “.... f. The Directions of DPIIT has not considered certain rights and statutory protections of the OMCs under Rent Control Acts, Burma Shell/Caltex Acquisition Act etc. and right of lease renewals, ensuring continuation of occupancy even after the expiry of a lease. DPIIT’s directive, as it stands, seems to overlook these protections and prematurely assumes a cessation of the right to the site. ...... 3. In view of likely public inconvenience due to closure of such ROs, many of which are located in urban areas are metropolitan cities, it is therefore requested that the directives issued by DPIIT vide OM dated 26.12.2023 be put on hold and consultation with stakeholders including OMCs may be done in public interest before taking any further decision in this regard.” 9. Learned senior counsel for the petitioner submits that the respondent No.3 without considering the petitioner’s letter dated 19.03.2025, had suspended the petitioner’s licence vide impugned order No.P/SC/TG/14/4237 (P137190) dated 21.03.2025 and the petitioner’s is unable to carry RO operations and the same would cause inconvenience to general public for want of supply of petroleum products, hence pray this Court to set aside the impugned order No.P/SC/TG/14/4237 (P137190) dated 21.03.2025. 10. Learned standing counsel appearing for respondents submits that the respondent No.3 under Rule 153 of the Petroleum Rules, 2002 and in the absence of lease agreement has suspended the petitioner license vide order dated 21.03.2025. 11. 10. Learned standing counsel appearing for respondents submits that the respondent No.3 under Rule 153 of the Petroleum Rules, 2002 and in the absence of lease agreement has suspended the petitioner license vide order dated 21.03.2025. 11. Upon perusal of the impugned order dated 21.03.2025, it is noticed that the responded No.3, without considering the petitioner’s reply dated 17.02.2025 to the show cause notices dated 22.05.2024 and without considering the petitioner’s detail representation dated 19.03.2025 has suspended the petitioner’s license vide impugned order dated 21.03.2025 and in view of the said suspension, the petitioner is unable to carry RO operations and the same would cause inconvenience to general public for want of supply of petroleum products. Hence, this Court deems it appropriate to set aside the impugned order dated 21.03.2025 and remand the matter back to respondent No.3 for afresh consideration. 12. Having considered the above facts and circumstance, this writ petition is allowed by setting aside the impugned order No.P/SC/TG/14/4237 (P137190) dated 21.03.2025, with a liberty to the petitioner to submit fresh explanation before the respondent No.3, enclosing all the relevant documents, within a period of one (1) week from the date of receipt of copy of this order and thereafter in the light of the order passed by the Bombay High Court in Commercial Arbitration petition (L) No.4092 of 2023 dated 27.02.2023 and the arbitral proceedings are pending before the learned Arbitrator, considering the pendency of O.S.No.72 of 2025 on the file of the Principal Junior Civil, Judge, Mancherial, the respondent No.3 is directed to consider the petitioner’s fresh explanation and pass appropriate orders strictly in accordance with law, as expeditiously as possible, preferably within a period of one (01) month from the date of receipt of petitioner’s fresh explanation and communicate the same to the petitioner. 13. Accordingly this writ petition is allowed. Miscellaneous applications, if any pending, shall stand closed. No order as to costs.