High Court Directs BPCL to Decide Fate of Impugned Letter of Intent in Accordance with Applicable Rules and Regulations

07 May 2024 8:19 AM

By: Admin

In a significant judgment, the Punjab and Haryana High Court, presided over by Hon’ble Mr. Justice Jagmohan Bansal, has directed Bharat Petroleum Corporation Limited (BPCL) to decide the fate of the impugned Letter of Intent (LOI) issued for the establishment of a petrol pump. This direction comes in the wake of the Deputy Commissioner, Sirsa rejecting BPCL's application seeking a No Objection Certificate (NOC) in terms of Rule 144 of the Petroleum Rules.

The core legal issue pertains to the grant of LOI by BPCL for setting up a petrol pump, the procedural compliance with government guidelines, and the subsequent rejection of the NOC application by the Deputy Commissioner.

The petitioner, Deepak Goyal, challenged the allotment process after being unsuccessful in the initial draw of lots for the petrol pump, which saw respondent No.7 receiving the LOI. The case was complicated by the fact that the land initially offered by respondent No.7 faced objections from the PWD Department for not adhering to the government guidelines and instructions. Despite offering alternate land, the NOC from the PWD Department was not granted, leading to a legal stalemate.

Justice Bansal meticulously analyzed the sequence of events and the legal provisions involved. His observation pointed out that the rejection of the NOC application by the Deputy Commissioner does not automatically lead to the cancellation of the LOI issued to respondent No.7. The court noted, "Rejection of application seeking NOC in terms of Rule 144 of Petroleum Rules does not automatically entail cancellation of Letter of Intent issued by any oil company in favor of any candidate."

The judgment reinforces the importance of adherence to the Petroleum Rules, particularly Rule 144, which governs the issuance of NOCs for setting up petrol pumps. It also highlights the procedural necessity for oil companies like BPCL to follow government guidelines and instructions in issuing LOIs.

The court disposed of the petition with a directive to BPCL to decide the fate of the impugned LOI. The decision must be in accordance with the terms and conditions of the brochure, along with applicable rules and regulations. The judgment does not automatically cancel the LOI but mandates a reevaluation by BPCL in light of the Deputy Commissioner's rejection of the NOC.

Date of Decision: January 31, 2024

Deepak Goyal vs. Bharat Petroleum Corporation Limited and others