The High Court · 2025

Petitign under section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to suspend the Qrder dated 21t0312025 issued by the Respondent No 3 / Counsel for the Petitioner: SRI S.RAV|, SENIOR COUNSEI- FOR M/s. R.S.ASSOCIATES Counsel for the Respondents: M/s. NVR.RAJYA LAKSHMI, SC FOR CENTRAL GOVT. The Court made the following: ORDER \ THE HONOURABLE SRIIUSTICE N.V.SHRAVAN KUMAR WRIT PETITION No.12367 of 2025 ORDER: 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 itt suspending the license of ttu Petitioner bearing No.P/SC/tG/1a/a237 aide Order dated 21.03.2025 as nrbitrary, iLLegaL, and in aiolation of Article 74 and Article 19 of the Constitution of lndia."

3. Brief facts as stated in this writ petition are that pctitioner is a public limited company incorporated on 23,03.2015, registered under the provision of Companies Act, 2013. The respondent No..l has issued marketing authorization to Reliance Industries Limited to market transportation fuels- pekol and diesel in retail in India. Subscqucntly, the Reliance Industries Limited, oide dealerchip 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 Induslries 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, I \ .+. -'.--t I - 2 477/7, situated,rt Garmilla Village, Mancherial Mand;l and Municipality, Adilabad Districr, tl-Le said premises is used as storage depot or a service station for the purpose of setling or otherwise dealing rn or of receiving, storinl;, treating or handling for distribution of petrokrtrm or any of this productior-rs. The rcrms of the lease deed dated 14.03.2005 is for a period of 20 years and the Cl.use 3(viii) of the said rease deed entitres trre lessee to'an absolute right of rcncwal of the lease for a further equivalent terms of 20 vears at same rent ancl on same terms and conditions

4. Irurther cast' is that on 24.02.2020, the Reliance Indrrstrics Liniired fited an application and requested respondent No.1 to transfer rts marketing rights to the petitione' and the rcspondent No.1 zrlde letter dared 31.03.2020, has approvcd the same'and the petitioner was permitted to exer.cise the markcting rights i.e., to marke't Moror Spirit (MS) and High speed Die,rcl (HSD) for retail marketirrg. Thc.caiter, the Reliance Industries Limited uirle Assignment Agreement dated 117.05.2020, assigned its business of o wning, operating, conducting pctrolcum rctail marketing and related activiti,ls in the states of Andhra Pradcsh anrl rclangana including its rights, entitl:ments, liabilities, covenants and obli;lation under the Dealership Agreement in favour of the petitioner. Subscque ntly, the Reliance Industries Limr ie,d, executcd a Assignment of lcast' decd dated 2g.o1.2o2o, wherein the ri3ht, titre, intcrest and obligations of tlrc Reliance Industries Limited arising..t of leasc deed datecl 14-03 2005 rvas also assigned to the petitioner. Later, the petitioncr on

28.17.2027 macle an.rpplication and requested respondent No.3 to renew the J petitioner's licence up to 3l-12-2037 and respondent No 3 uide letter No.P/SCITG/74/4237(P137190)d.ated02.72.2021hasrenewedthelicence 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 thc petitioncr 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 agrcement by M/ s.Shiva Krishna Filling Station (hereinafter referred as 'the dealer') and adhering to the above condition, the petitioner z;ide 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.a092 of 2023, seeing reiief against the dealer and the Bombay High Court uidz order dated 27 .02.2023 has disposed of the same by observing the following:- " 8) lMile passing order for appointment of SoIe Arbitrator, it is necessary that the Petitioner deserte protection, to the effect that the Respondent and it representntioe, employees, seruants, etc and or any persons claiming through, shall restrain themseloes, from crenting any .\ 4 disturbattce ttr lny nulsance of ulutsoeoer nature and prepent tlrc operation/4<C\ or r.stram representatiae, employees of tlrc petitioner Jrom enterit,t t nto it nt nny point of time and in t,ny manner interfering u,itlt the husiness of petroleunt dealersh;p, tohiclt is continucLl by llr pelitioner." I \

6. Learnecl sr"rior counscl would submit that on 14.11.2021, the dealer had sent two u,rl,rtt:r.l lotters to responded No.3 and the -e,after, rcsp.n<lent No.3 issucd show iarrse notices dated 22.05.2024, wherein the petitioner was directed to subrnit clarification aiong with requisite do< uments providing legal possessir)n o\ or the subject premises and in the sr:cond show cause notice, thc pctitioncr rvas directed to submit clarification rcgarding its licensc which rvas rcnewe.rt up to j1.12.2031. It is further submitted that thc said show cause notices tvcrc not received by the petitionr:r and when the petitioner in tho lirst rvcek of February, 2025, had vis ted the office of responded No.3 for r<tutine rvork, came to know about tlLe aforesaid show cause notices datc.l 22.05.2024 and on 77.02.2025, petiti(xrer subrnitted a detailed reply to thc. show, cause notices dated 22.05.2021. Thereafter, the respondent No.3 issued lettcr dated 20 02.2025, directing the petitioner to submit the renewcd lcasc decd within 30 days from the date of issuance of the letter. Subsequentlv. thc petitioner issued a notice to the ler;sor calling upon him to come forr,r.artl antl execute a lease in favour of the pe:itioner as agreed under clause 3(Viii) of tl.rc lease deed dated 14.03.2005. l4trh:rr the lessor did not come forward, pc'titioner for specific performance filed ().S.No.72 of 2025 and the same is pcnd ing beforc the Principat Junior Civil , |uc ge, Mancherial. 5 7 . Learted senior counsel would submit that the Petitioner oide 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. 092 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 prccipitating action that may disrupt the RO operation. It is further submitted that respondent No.3, without considering the petitioner's reply dated

77.02.2025 and letter dated 19.03.2025, issued impugned order No.P/SClTGl1,4/4237 (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 ights and statutory protections of the OMCs under Rent Control Acts, Bunna Shell/Caltex Acquisition Act etc. and ight of lease reneuals, ensuing continuation of occupancy eaen after the expiry of a lease. DPIIT's directiae, ai it stands, seems to ooerlook these protections and prcmaturely aisumes a cessation of the ngW b the site.

3. In aieu of likely public inconztenience due to closure of such Ros, nuny of which are located in urban areas are metropolitan cities, it is theret'ore requested that the directirtes issued by DPIIT ttide OM dated 26.12.2023 be put on hold and consultation toith stakeholders including OMCs may be done in public interest before taking any further dtcision 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 I 6 suspended thc pt_.titioner,s licence ttid.e impugnecl ordcr No.P/SC/TGIt4/q2i7 (p737190) dated 21..03.2025 a-ri the petitioner,s is unable to carrl Ro .perations an, the same would c..rse inconvcnience to general public for want of supply of petroleum proclucts, hence pray this Court to sct asiilt. tht impugllgcl order No.p/SC /Tc/7a/an7 ei,i.}Zill[) dateti 21.03.202ti

10. Learned stanclir-Lg counsel appearing for respond:nts submits that the respondent No lr uncicr Rulc 153 0f the petroleum Rures, 2002 and in the absence of Ieasc agrecmcnt has suspended the petitioner. license z;irle order dated 21.03.2025 ,'17. Upon pcrusal of the impugned order dated 21.()1.2025, it is noticed that the responct:tl N().3, h,ithout considering the petitioner,s repll, dated 77 '02-2025 to thc sh.rn,causc notices trated 22.05.2024 and ,vithou t considering the petitioncr's cr.tair represcntation dated 1g.03.2025 rras suspended the petitioner's licenst, i,ir1c inrpul;ncd order dated 27.03.2025 and in view of the said suspension, th. petitio.er is unabre to carry Ro operations and the same wotild cause incon,,,cnicncc to general public for want of slL[rply of peholeum products. Hence, this Court rlcems it appropriate to set aside the impugned order dated 21.03.2()25 ancl remand the matter back to respondent No.3 for afresh consideration. .\ I ,ry r!t i1rtt.ra!.,, l

12. Having considererl 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 beforc thc responclent No'3' enclosing all the relevant documents' within a periocl of one (1) week from the date of receip[ of copy of this order and trrereafter in the right of the order passed by the Bombay High Court in Commercial Arbitration petition (L) No 4092 of 2023 dated 27 '022023 and the albitral proccedings are pending before the learned Arbitrator' considering the pendencl' of O S No 72 of 2025 on thc file of the Principal Junior Civil' Judge, Mancherial, the respondent No 3 is directed to consider the petitioner's fresh explanation ancl pass appropriate orders strictly in accordance with law' as expeditiously as possible' preferably within a period o{ one (01) month from t[-rc clate of reccipt of petitioner's {resh explanation and cotnmunicate the same to the Petlttoner

13. Accordinglv this writ petition is allowed Misce any pencling, shall stand closed No ordel ls to lottti llaneous aPPlications, if D'-A AS isflt'IA:e'tFRRX ,,TRUE COPY" SECTION OFFICE R To 1 2 3 4 6 Ministry of Petroleum and Natural s (MoPNQ) Shastri of Commerce and lndustry VaniiYa Bhawan' New and ExPlosive s SafetY CQO Towers , Kavad iguda, NV R.RAJYALA KSH Ml, SC FOR CENl*o' oo* toPucl s Petroleum losive 02, 6th Floor' No. 6 ATES, Advocate IOPUC nion of lndia' U awan, New Delhi - 1 1001 1 Bh Un ion of lndia , Ministry Delhi - 1'10011 ntroller of ExP ief Co Joint Ch PESO). Room tion ( organisa Secunderabad -500080 One CC to M/s R S. AS SOCI one CC to SRI CD Coptes Two 6 K PS BS w CC TODAY oB THE s 14 IC (/, : / 0 5 I'|AY [m l:'.> li -l \,,,11 \ (r' ..,/ ]I HIGH COURT DATED:2910412025 ORDER WP.No.12367 of 2025 ALLOWING THE WRIT PETITION WITHOUT COSTS Bc.ekA s"