“District Authority Cannot Probe Title Disputes Under Rule 144”: AP High Court Sets Aside NOC Denial, Says “Any Enquiry Beyond Its Power Would Amount to Abdication of Duty”
Sanchayita Lahkar
In a matter concerning the denial of a No Objection Certificate (NOC) under Rule 144 of the Petroleum Rules, 2002, the High Court of Andhra Pradesh held that a District Authority acted beyond its jurisdiction by considering a private dispute between a lessor and lessee while rejecting the NOC application. A Single Bench of Justice Subba Reddy Satti observed that “the dispute, if any, between the lessor and lessee is beyond the scope of the enquiry and that can be subject to separate challenge in appropriate proceedings,” and stated that “any enquiry beyond its power would amount to abdication of duty vested under the statutory provisions.” The Court found the impugned endorsement legally unsustainable in light of the statutory framework and the uncontroverted lease documentation presented by the petitioner.
The petitioner was a lessee of land measuring Ac.00-79 cents in Survey No.87/2B, Padmapuram Village, Araku Valley, Alluri Seetha Ramaraju District, held under a registered lease deed dated 18.11.2013 for a period of 28 years and two months. The lease was executed with respondent No.9, the landowner. Initially used for agricultural activities, the land was later converted for commercial use under the Andhra Pradesh Land Conversion Act, 2006, with permission granted in 2022.
On 24.12.2018, Bharat Petroleum Corporation Limited (BPCL) issued an advertisement for the award of a petroleum retail outlet dealership at Araku Valley. The petitioner applied under the Scheduled Tribe category and was issued a Letter of Intent on 05.07.2021. Following this, the petitioner applied to the relevant authorities for the grant of NOC and for amendment of the lease deed to permit sub-leasing to BPCL.
An endorsement acknowledging the amendment was issued by the Tahsildar and Agency Sub-Registrar under Rc.No.65/2019 SA dated 05.12.2019. Subsequently, the Sub-Collector, Paderu, conducted a field inspection and submitted a report dated 28.12.2022, stating that the land was free from civil disputes, encroachments, or any structures that could affect public safety. Another report dated 21.07.2023 from the Tahsildar was also forwarded by the Sub-Collector to the Joint Collector under Rc.No.909/2019/SA-B.
Despite these reports, the District Collector issued an endorsement dated 09.10.2023, declining to issue the NOC on the grounds of a dispute between the lessor and lessee. This endorsement was challenged by the petitioner through the present writ petition.
The petitioner submitted that the District Authority’s role under Rule 144 is confined to considerations of public interest and safety, and that it does not extend to resolving private contractual disputes. The registered lease and the official endorsement supporting the lease period and amendment were placed on record. Documents marked as Exs.P2, P3, P5, and P6 were relied upon to demonstrate the procedural and legal basis for the petitioner’s entitlement to the NOC.
The Assistant Government Pleader for Revenue submitted that the District Collector had conducted an enquiry, during which statements were recorded from both the petitioner and the lessor, and based on the lessor's objection concerning lease terms and alleged non-payment, the application for NOC was rejected.
Vakalat was filed on behalf of respondent No.9, but no representation was made on behalf of the said respondent during the hearings on 26.03.2024, 16.04.2024, and 06.03.2025. Further, despite multiple adjournments and sufficient time granted, respondent Nos.3 and 4 did not file counter affidavits. The writ petition was filed on 11.12.2023, and the Court recorded that the 120-day time limit under Rule 12 of the Writ Proceedings Rules for filing a counter affidavit had expired.
The Court framed the issue for consideration as: “whether the endorsement dated 09.10.2023 (Ex.P4), impugned in this writ petition is legally sustainable?”
It examined Rule 144 of the Petroleum Rules, 2002, which governs the procedure for obtaining a No Objection Certificate for petroleum storage. The Court noted that the licensing authority requires the applicant to submit a site plan and obtain a certificate from the District Authority confirming that there is no objection to granting the licence. The prescribed proforma under Rule 144 sets out parameters for such certification, including verification of lawful possession, authorization from the landowner or leaseholder, proximity to schools, hospitals, public assemblies, traffic impact, and emergency accessibility.
The Court observed: “While granting NOC, as per the proforma, the authority has to consider whether the possession of the site by the applicant is lawful and has authorization of the land owner or lease holder for developing the premises.” It further stated that “the power under the Rules, as illustrated in Rule 144 and Proforma, clearly indicates that the insistence of NOC from the District Authority is to protect public interest and public safety.”
On examining the factual record, the Court found that the lease deed dated 18.11.2013 was a registered document and that the amendment permitting sub-leasing to BPCL was endorsed by the Tahsildar and registering authority. The Court noted that the District Collector issued the endorsement based on statements recorded from the lessor and lessee, wherein the lessor disputed the lease period and alleged non-payment. However, the Court held that such issues fell outside the scope of enquiry permitted under Rule 144.
The Court relied on the decision of the Supreme Court in C. Albert Morris v. K. Chandrasekaran, (2006) 1 SCC 228, which held: “Rule 144 deals with grant of NOC [and] does not contemplate an enquiry into ownership of the land nor does it require the Collector to enquire into the nature of the right claimed by the person who has applied for NOC.”
The Court also referred to the Division Bench of the Kerala High Court in W.A. No. 1461 of 2022, reported in 2023 LiveLaw (Ker) 508, which held: “The District Authority must confine its scope of enquiry with the parameters referred under the proforma in the light of Rule 144 of the Petroleum Rules 2002. Any enquiry beyond its power would amount to abdication of duty vested under the statutory provisions...”
Regarding the procedural lapse, the Court observed: “In the absence of any counter affidavit rebutting or adverting the averments made in the writ affidavit, it is deemed that the averments made in the writ affidavit are proved.” It cited Lohia Properties (P) Ltd., Tinsukia v. Atmaram Kumar, (1993) 4 SCC 6, to underline that failure to traverse the pleadings results in deemed admission of facts.
On these grounds, the Court found the endorsement impugned in the writ petition to be legally unsustainable and in excess of statutory jurisdiction under Rule 144.
The endorsement vide computer No.7998 dated 09.10.2023 issued by respondent No.3 was set aside. Respondent No.3 was directed to issue a No Objection Certificate in respect of the property situated in Survey No.87/2B, Padmapuram, Araku Valley, Alluri Seetha Rama Raju District, in terms of Rule 144 of the Petroleum Rules, within one week from receipt of a copy of the order. There was no order as to costs. All pending miscellaneous petitions were directed to stand closed.
Advocates Representing the Parties
For the Petitioners: Jada Sravan Kumar, Advocate
For the Respondents: M. Uma Devi, Central Government Counsel; N.H. Akbar, Advocate; G. Kavitha, Standing Counsel for Corporation
Case Title: Mandi Rojashri v. The Union of India and Others
Neutral Citation: APHC010568462023
Case Number: Writ Petition No. 29400 / 2023
Bench: Justice Subba Reddy Satti
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