Petroleum Storage Licence Auto-Cancels On Lease Expiry, No Hearing Required; Kerala High Court
Safiya Malik
The High Court of Kerala Single Bench of Justice M.A. Abdul Hakhim held that a petroleum storage licence lapses on its own when the outlet operator no longer has a legal right over the site after the lease period ends, making a separate cancellation order unnecessary. In the case, the landowners approached the court seeking eviction of the dealer operating a petroleum retail outlet on their land after the lease expired and also sought action to cancel the explosives/petroleum storage licence issued for the outlet. While declining to order eviction through writ jurisdiction, the court allowed the petition in part and directed the licensing authority to cancel the licence for the outlet premises.
The writ petition was filed by the owners of a parcel of land leased in 2004 for the operation of a petroleum retail outlet. The lease deed was executed for a fixed period of twenty years commencing from 1 February 2004 and expired on 31 January 2024. After expiry of the lease, the dealer continued operating the petroleum outlet from the premises.
The petitioners sought a writ of mandamus directing delivery of vacant possession of the leased premises and cancellation of the explosive licence issued for the petroleum outlet. Their contention was that upon expiry of the lease, the dealer ceased to have any right over the site, rendering continuation of the petroleum outlet illegal.
The dealer opposed the writ petition on the ground that eviction could not be sought against a private individual through writ jurisdiction and that cancellation of licence required adherence to the procedure under the Petroleum Rules, 2002. It was also pointed out that a civil suit for recovery of possession was already pending.
The statutory authority concerned was the licensing authority under the Petroleum Rules, 2002, which had issued the licence for storage of petroleum at the site.
The Court noted that the lease deed executed between the parties was for a fixed term and “expired on 31.01.2024”. It recorded that the respondent dealer was “a private individual” and that the oil marketing company was not in possession of the premises.
While examining the prayer for eviction, the Court observed that “since Respondent No.1, who is a private individual, has been in possession of the leased premises, it is the Respondent No.1 who is to be evicted from the leased premises and not the Oil Marketing Company”. It further stated that writ jurisdiction could not be invoked to evict a private party from leased premises.
On the issue of cancellation of the explosive licence, the Court noted that the petitioners had submitted a written demand to the licensing authority and that “when the Authority does not respond to the demand of the Petitioners within a reasonable time, it is well within the right of the Petitioners to seek a Writ of Mandamus”.
Referring to Rule 152 of the Petroleum Rules, 2002, the Court recorded that “every license granted under the said Rules shall stand cancelled if the licensee ceases to have any right to the site for storing petroleum”. It observed that upon expiry of the lease, the dealer “ceases to have the right to the site for storing petroleum”.
The Court rejected the contention that a prior hearing was mandatory, stating that “the license stands cancelled automatically without any formal order for the same by the Licensing Authority” when the licensee loses the right over the site.
Relying on precedent, the Court reiterated that “a wrong cannot be a right of a person who trespasses on to another’s land” and that continued occupation without legal entitlement could not confer any enforceable right.
The Court directed: “In view of the decision in C. Albert Morris (supra), the Petitioners are entitled to get their second prayer seeking a Writ of Mandamus to the Respondent No.4 to cancel the Explosive License issued in favour of the Respondent Nos.1 to 3 for conducting a Petroleum Retail Outlet in the leased premises.”
“Accordingly, this Writ Petition is allowed in part, issuing a Writ of Mandamus to the Respondent No.4 to cancel the Explosive License issued in favour of the Respondent Nos.1 to 3 for conducting the Petroleum Retail Outlet in the leased premises covered by the Ext.P1 Lease Deed. “
Advocates Representing the Parties
For the Petitioners: Sri. K.M. Sathyanatha Menon, Advocate
For the Respondents: Sri. S. Sreekumar, Senior Advocate; Sri. Martin Jose P., Advocate; Sri. Nithin George, Advocate; Government Pleader for the statutory authority
Case Title: Choorapilan Jameela & Anr. v. Padavanna Shamseer & Ors.
Neutral Citation: 2026: KER:1428
Case Number: WP(C) No. 39399 of 2025
Bench: Justice M.A. Abdul Hakhim
