Case Note & Summary
The litigation arose from a writ petition filed before the High Court of Judicature at Bombay, Bench at Aurangabad, challenging the refusal of an Additional Collector to issue a No Objection Certificate for a petroleum retail outlet dealership. The petitioner had participated in an advertisement dated 25/11/2018 for award of a retail dealership of Hindustan Petroleum Corporation, respondent No.2. Upon being found qualified, respondent No.2 issued a Letter of Intent dated 24/06/2020 in favour of the petitioner for Gut No.160, village Suratgaon, Taluka Tuljapur, District Osmanabad. After receiving the Letter of Intent, the petitioner, along with other requisite NOCs, applied to the District Magistrate (Additional Collector), Osmanabad, seeking an NOC. The Additional Collector refused by communication dated 28/08/2023 on the ground that two crimes were registered against the petitioner, namely Crime No.304/2017 under Sections 143, 149, 353, 504 and 506 of the Indian Penal Code, 1860, and Crime No.56/2016 under Sections 120-B, 323, 504, 506, 143 and 149 of the Indian Penal Code, 1860. The Additional Collector also intimated respondent No.2 accordingly. The petitioner contended that the refusal was unlawful because neither the advertisement nor the Letter of Intent contained any stipulation barring issuance of an NOC on the ground of mere registration of criminal cases. Respondent No.3, the Additional Collector, filed an affidavit reiterating that two crimes were registered against the petitioner and therefore the office declined to issue the NOC. Respondent No.2, Hindustan Petroleum Corporation, filed an affidavit drawing attention to Clause 14(c) of the Letter of Intent, which provided that the dealership may be withdrawn or cancelled only if the Letter of Intent holder is convicted of any crime or economic offence involving moral turpitude. The High Court considered whether, in the absence of any statutory provision, the Additional Collector could lawfully refuse to issue an NOC despite the issuance of a Letter of Intent. The Court found that neither the advertisement nor the Letter of Intent precluded issuance of an NOC on the ground of registration of criminal cases. Clause 14(c) explicitly stated that only upon conviction would the dealership be liable to be cancelled. The Court noted that no statutory provision was brought to its notice authorising non-issuance of an NOC merely on account of registration of criminal cases. The denial of NOC was therefore wholly unjustified. Accordingly, the High Court quashed and set aside the impugned communication dated 28/08/2023 and directed respondent No.3 to issue the NOC in favour of the petitioner within three weeks. The Rule was made absolute.
Headnote
A) Administrative Law - No Objection Certificate for Petroleum Retail Outlet - Mere Registration of Criminal Cases Cannot Justify Refusal of NOC Absent Statutory Provision or Clause in Advertisement/Letter of Intent - Indian Penal Code, 1860, Sections 143, 149, 353, 504, 506, 120-B, 323 - The Additional Collector refused NOC citing two registered crimes, but the Letter of Intent issued by Hindustan Petroleum Corporation contained Clause 14(c) providing for cancellation only upon conviction for any crime or economic offence involving moral turpitude; neither the advertisement nor the Letter of Intent barred issuance of NOC on registration of crimes, and no statutory provision authorized such refusal - Held that the denial of NOC was wholly unjustified and the impugned communication dated 28/08/2023 was quashed with direction to issue NOC within three weeks (Paras 2-11).
Issue of Consideration
Whether the Additional Collector, Osmanabad, could refuse to issue a No Objection Certificate (NOC) for a retail outlet dealership in the absence of any statutory provision and despite issuance of Letter of Intent, merely on ground of registration of criminal cases.
Final Decision
The impugned communication dated 28/08/2023 issued by respondent No.3 – Additional District Collector, Osmanabad, refusing to grant an NOC in favour of the petitioner for Gut No.160 of village Suratgaon, Taluka Tuljapur, District Osmanabad, was quashed and set aside. Respondent No.3 was directed to issue the NOC in favour of the petitioner within a period of three weeks from the date of judgment. The Rule was made absolute.
Law Points
- Administrative authority cannot refuse NOC without statutory or contractual basis
- Mere registration of criminal cases is not a lawful ground to deny NOC
- Letter of Intent Clause 14(c) allows cancellation only upon conviction for crime or economic offence involving moral turpitude
- No Objection Certificate must be issued when prescribed conditions are satisfied
