Chennai: The Madras High Court has ordered a probe by the Central Bureau of Investigation into a large-scale racket involving the alleged use of fake No Objection Certificates (NOCs) to establish petrol, diesel, and auto gas retail outlets across Tamil Nadu.
A First Division Bench comprising Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan directed the state’s Crime Branch-Criminal Investigation Department (CB-CID) to hand over all case records to the central agency after expressing dissatisfaction over the ongoing investigation. The court observed that the existing probe had failed to examine the role of beneficiaries who allegedly operated fuel outlets using forged certificates.
Allegations of Fake NOC Network
The controversy relates to hundreds of retail fuel stations reportedly established using fake NOCs purportedly issued by district collectors and police commissioners before 2020.
The racket reportedly came to light during the hearing of a habeas corpus petition in 2020 concerning the preventive detention of two individuals accused of issuing forged NOCs bearing the seal of the Greater Chennai City Police Commissioner’s office.
Following suspicions that the operation could extend beyond Chennai, the High Court directed the Director General of Police to verify records across all districts. The state police later reported that at least 91 fake NOCs might have been used to run fuel outlets in different parts of the state.
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Investigation Found Inadequate
The Bench noted that though action had been taken against middlemen and document forgers, little progress was made in prosecuting the beneficiaries who allegedly secured the certificates by paying substantial sums of money. According to the court, the crime could not have been executed without the active participation of those who ultimately operated the fuel outlets.
The judges observed that instead of submitting proper applications to district administration or police authorities, some applicants allegedly resorted to paying lakhs of rupees through intermediaries to obtain forged NOCs. The court granted multiple opportunities to the CB-CID to present a satisfactory investigation report but expressed disappointment over the response.
“We have no hesitation in saying that the manner in which the investigation has been conducted is not in the proper direction,” the Division Bench remarked in its order.
Need for Deeper Investigation
Authoring the judgment, the Chief Justice emphasised that surface-level evidence indicated the possibility of a deeper criminal conspiracy.
The court noted that action against beneficiaries had been initiated only in Erode and Dindigul districts, while similar scrutiny was absent in Chennai despite indications of widespread irregularities.
“The material floating at the surface requires a much deeper and fair investigation to examine the role of the beneficiaries for whose benefit the system was allegedly operating,” the order stated.
Case Background
The fake NOC issue was initially flagged during judicial proceedings related to preventive detention cases in 2020. Subsequently, public interest litigation was filed in 2023 demanding strict action against those involved in the racket.
The investigation had been transferred to the CB-CID, which was probing the establishment of multiple fuel outlets in districts including Chennai, Erode, and Dindigul. However, the High Court found that the probe largely focused on intermediaries rather than the primary beneficiaries.
Significance of the Order
The transfer of the case to the CBI marks a major escalation in the investigation, as the central agency will now examine the alleged network behind the forged certification system.
Legal observers say the ruling could trigger fresh scrutiny of fuel outlet licensing processes and regulatory oversight mechanisms in the state. The CB-CID has been directed to provide complete case files to the CBI for further investigation.
