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PETITIONER: M/S. DURGA OIL COMPANY & ANR

       Vs.

RESPONDENT: STATE OF UP & ORS

DATE OF JUDGMENT:       29/07/1998

BENCH: G.B. PATTANAIK, A.P. MISRA

ACT:

HEADNOTE:

JUDGMENT:                      J U D G E M E N T G.B. PATTANAIK, J.      Leave granted.      This appeal  by grant  of  Special  Leave  is  directed against eh  judgment  dated  2nd  September,  1997,  of  the Allahabad High  Court in civil Misc. Writ Petition No. 28539 of 1997.  The Writ  Petition had been filed by the appellant challenging the  order dated 14th August, 1997 passed by the District  Supply  Officer,  Shahjahanpur  calling  upon  the appellant to  stop using the underground tank and dispensing pump unit  inter alia on the ground that there is no embargo either under  he provisions  of the  Petroleum Act  and  the Rules frames  thereunder or  in the licence in form XI which had been  granted to the appellant under the Petroleum Rules not to  sell High speed Diesel by using the underground tank and the  pump unit  attached to  the same. The High Court by the impugned  judgment considered the different provision of the  Act   and  the   Rules  as  well  as  the  Forms,  More particularly, Forms  XI and  XII and  came to  hold  that  a licensee under  Form XI  is not entitled to store High Speed Diesel in  an underground  tank and  sale from  the same  by using a  pump unit.  With the  aforesaid conclusion the Writ Application  having   been  dismissed   the  appellant   has preferred the present appeal.      Mr.  Sudhir   Chandra,  the   learned  senior   counsel appearing for the appellant contends that an analysis of the relevant provisions  of the  Act and  the Rules will make it crystal clear  that there is no prohibition contained in the licence form,  From XI granted to the appellant from selling high seed  diesel from the underground tank with a hand unit attached to  the same  and the  High Court committed serious error in  arriving at  a conclusion  that the  licence under Form XI  does not  authorise the licensee to sell high speed diesel from an underground tank with a hand unit attached to the same.  In order  to appreciate  the correctness  of  the aforesaid submission  it would  be necessary  to examine the relevant  provisions   of  the  Act  and  the  Rules  framed thereunder.      The expression  ’petroleum’ has been defined in Section 2 (a) of the Act to mean thus:-

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    2(a) ’Petroleum’  means any  liquid      hydrocarbon    or     mixture    of      hydrocarbons, and  any  inflammable      mixture (liquid,  viscous or solid)      containing any liquid hydrocarbon"      The said  ’petroleum’ is divided into 3 classes - class A, B  and C  and petroleum class B has been defined in class 2(bb) thus:-      "2(bb) -  ’Petroleum Class B’ means      petroleum having  a flash -point of      twenty-  three  degrees  Centigrade      and  above   but  below  sixty-five      degrees Centigrade".      It is not disputed that high speed diesel with which we are concerned in the present appeal is petroleum Class B.      Section 4  of the  Act enables  the      Central Govt.  to  make  Rules  for      import, transport  and  storage  of      petroleum.      Under  Section   29  of   the  Act,      Central Govt.  has been  authorised      to make  rules in  respect  of  any      matter ancillary  to such  rules as      necessary  to  protect  the  public      from  danger   arising   from   the      import,     transport,      storage      production refining  or blending of      petroleum.      Section 7  of the Act provides that      no   licence    is   required   for      transport or  storage of  petroleum      Class B  if the  total quantity  in      possession at  any one  place  does      not exceed 2,500 liters and none of      it is  contained  in  a  receptacle      exceeding one  thousand  liters  in      capacity.      Under  the   Rules  the  expression      ’container’  has  been  defined  in      Rule 2  (vii) to  mean a receptacle      for petroleum  not exceeding  1,000      liters in capacity.      The  expression   ’form’  has  been      defined in  Rule 2(xii)  to mean  a      form in the First Schedule.      The expression  ’petroleum in bulk’      has been  defined in  Rule 2(xv) to      mean petroleum  contained in a tank      irrespective  of  the  quantity  of      petroleum contained therein.      The  expression   ’tank’  has  been      defined in  Rule 2(xxii)  to mean a      receptacle for  petroleum exceeding      1,000 liters in capacity.      Under Rule  4, containers exceeding      one litre in capacity for petroleum      Class  A,   and  five   liters   in      capacity for  petroleum Class  B or      petroleum Class  C, shall  be of  a      type   approved    by   the   Chief      Controller.      Rule 6  provides for  container for      petroleum Class B or Class C and it      requires that such container should      be constructed of steel or iron and

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    be of  a type approved by the Chief      Controller.      Rule 124  provides that  every tank      of or receptacle for the storage of      petroleum   in    bulk   shall   be      constructed of  iron  or  steel  in      accordance  with   the   codes   or      specifications  approved   by   the      Indian Standards Institution or any      other   code    or    specification      approved in  writing by  the  Chief      Controller.      Under Rule  141, licences under the      Rules  may   be  granted   by   the      licensing authorities  set forth in      the First  Schedule  in  the  Forms      specified for  the purpose  and  on      payment of a fee specified therein.      Article 4  of  the  First  Schedule      prescribes From  XI to  import  and      store petroleum  Class B  otherwise      than  in   bulk  in   quantity  not      exceeding  25,000  liters  and  the      authority empowered  to grant  such      licences is the District Authority.      Article  5  of  the  said  Schedule      prescribes  Form  XII  for  storing      petroleum in  tank or tanks and the      Chief controller  or Controller  of      Explosives   authorised   in   this      behalf by  the Chief  Controller is      the authority  empowered  to  grant      licence.      Apart from  the aforesaid provisions of the Act and the rules it would be appropriate to notice the order called the U.P. High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies  and Distribution)  Order, 1981,  framed by  the State Govt.  under the  provisions of  Essential Commodities Act. Under  the aforesaid order ’Dealer’ has been defined in Section 2(d) to mean -      " 2  (d) -  ’dealer’ means a person      engaged   in    the   business   of      purchase, sale  or storage for sale      of High  Speed Diesel  Oil or Light      Diesel Oil  or both  but  does  not      include an oil company."      Retailer has been defined in Section 2(i) to mean thus-      " 2 (I) - ’retailer’ means a dealer      who is not a wholesaler.      Wholesaler has been defined in Section 2(n) thus:-      "wholesaler’ in  the case  of Light      Diesel Oil means a dealer who deals      in a light diesel oil exceeding 100      liters in  a single transaction and      in the  case of  High Speed  Diesel      Oil a  dealer who  sells High Speed      Diesel Oil  by means  of dispensing      pumps."      Section 3  of the aforesaid order prohibits carrying on business as a dealer except under and in accordance with the terms and conditions of a licence granted under the Order.      a licence  under the  order is  granted in  Form C  and would subject  to the  conditions specified  therein  as  is apparent from Section 4(b) of the order.      From C  provides 4  columns required  to be  filled  up

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while granting a licence.      Correctness  of  the  submission  Mr.  Sudhir  Chandra, learned senior counsel appearing for the appellant has to be examined in  the light of the aforesaid provisions. There is no dispute that the appellant has been granted a licences in Form, XI  for  import  and  storing  of  petroleum  Class  B otherwise than  in bulk,  in quantity  not exceeding  25,000 liters. From the definition of the expression ’container’ in Rule 2(vii)  and ’tank’ in Rule 2(xxii) it is  apparent that a receptacle  for petroleum  upto 1,000  litre is  called  a ’container’ and a receptacle exceeding 1,000 litre is called a ’container’  and a  receptacle exceeding  1,000 liters  in capacity is  called a ’tank’. From the expression ’petroleum in bulk’  defined in  Rule 2(xv) read with the definition of tank in  Rule 2(xxii)  it is  crystal  clear  that  whenever petroleum  more   than  1,000   liters  is  contained  in  a receptacle then  it must  be held  to be  petroleum in  bulk irrespective of the quantity of petroleum contained therein. In other words in a container whether 1,001 liters is stored or 10,000   liters  is stored  it would  be a  ’petroleum in bulk’ within the ambit of Rule 2(xv).      Bearing in  mind the  aforesaid analysis  if the  First Schedule and  the forms  of licence  contained  therein  are examined then  From XI can be held to be meant for importing and storing  petroleum Class  B otherwise  than in bulk of a total quantity  not exceeding  25000 liters.  In other words the holder of a licence in Form XI can store petroleum Class B in  different containers  each of  which would  not exceed 1000 liters  in capacity  and subject to a total quantity of 25000 liters.  when such licensee stores the petroleum Class B in a tank meaning thereby in excess of 1000 liters then it would be a case of storage of petroleum in bulk and for such storage licence  is required  to be obtained in Form XII and the authority  empowered to grant such licences is the Chief Controller or  a Controller  empowered to grant such licence is the  Chief  Controller  or  a  Controller  of  explosives authorised in  this behalf  by  the  chief  Controller.  The appellant  being   a  licensee  for  importing  and  storing petroleum Class  B in  Form XI  is not entitled to store the same in tank as that would be a storage of petroleum in bulk and for  such storage  licence in  Form XII to be granted by the  Chief   Controlled  or   a  Controller   of  Explosives authorised by  such Chief  Controller is required. Since the appellant does  not possess the licence in Form XII, was not entitled to  store the  High Speed  Diesel in an underground tank and  sale from  the same  by using  of pump  unit.  the conclusion of  the High  Court, therefore,  does not  suffer from any illegality to be interfered with by this Court.      Mr.  Sudhir   Chandra,  the   learned  senior   counsel appearing for  the appellant  in course  of his  submissions contended, that  in interpreting a particular provision like the one  with which we are concerned in the present case the courts   should    adopt   the   principles   of   purposive interpretation as indicated in the decision of this Court in Forest Range  Officer & Ors. etc. vs. P. Mohammed Ali & Ors. etc. 1993  (3) Suppl.  supreme Court  Cases 627,  and if the purpose behind  the provisions  of the  Act and the Rules of the licence  form thereunder a purpose of which are required to be  achieved, namely,  the safety  measures to  deal with highly inflammable  to article is borne in mind, it would be appropriate to hold that the High Speed Diesel can be stored in an  underground tank which is the safest mode of storage. We  have  not  been  persuaded  to  accept  this  submission inasmuch as  the Rules itself provide for different types of licences conferring  authority on different persons to grant

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such licences.  The Act or the Rules do not prohibit storage of High  Speed Diesel in quantity more than 1000 liter in an underground tank  but what  is necessary  in such  a case is that the  licence has  to be  obtained in  Form XII from the Chief Controller  the appellant  admittedly being a licensee on Form  XI granted  by the District Magistrate cannot claim to be  entitled to store High Speed Diesel in an underground tank and  sale from  the same  as that would be a storage of petroleum in  bulk and  it would  be a  contravention of the terms and  conditions of licence itself. We have, therefore, no hesitation  to reject  the aforesaid  submission  or  Mr. Sudhir Chandra,  learned senior  counsel appearing  for  the appellant.      In view of our aforesaid conclusion it is not necessary to examine the effect of the provisions of the UP High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution), Order,  1981, framed by the State Govt. under the provisions  of Essential  Commodities Act,  though there cannot be  a dispute that the State Govt. by such orders can regulate the storage and supply of the High Speed Diesel and put restrictions  and conditions  as  authorised  under  the State Order.      In the  aforesaid premises,  the appeal  fails  and  is dismissed. But  in the  circumstances there will be no order as to costs.