w w w . L a w y e r S e r v i c e s . i n



M/s. Sayeed Absar bidi Works & Others v/s State of U.P. & Others

    Writ - C No. 28617 of 2021

    Decided On, 23 December 2021

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MRS. JUSTICE SUNITA AGARWAL & THE HONOURABLE MR. JUSTICE VIKAS BUDHWAR

    For the Petitioners: Vivek Kumar Singh, Advocate. For the Respondent: C.S.C.



Judgment Text

1. Heard Sri Bhagwati Prasad Singh learned Senior Advocate assisted by Sri Vivek Kumar Singh learned counsel for the petitioners and learned Standing Counsel for the State-respondents.

2. The petitioners herein are challenging the orders dated 6.7.2021 passed by the respondent no. 2 namely the Secretary, U.P. State Biodiversity Board and the consequential order dated 20.7.2021 passed by the respondent no. 3 namely the Divisional Director, Social Forestry, Forest Division, Prayagraj asking the petitioners to comply with the provisions of the Biological Diversity Act, 2002 (hereinafter referred to as "the Act, 2002"), by depositing the Access and benefit sharing amount in Form '1' of the Biological Diversity Rules, 2004 (hereinafter referred to as "the Rules, 2004") and Form 'Ka' of the Regulations, 2014 framed under the Act, 2002.

3. The petitioners herein are manufacturers of bidi and are registered partnership firms and company under the relevant Acts. For the purposes of their business, they are registered under the G.S.T. Act with the competent authority as well as the U.P. Tendu Patta (Vyapar Viniyaman Adhiniyam) Adhiniyam, 1972 [herein referred to as "the Tendu Patta Act" or U.P. Act No. 19 of 1972, as and where the reference requires] with the Forest Department of the State of the Uttar Pradesh.

The registration period of the petitioners under the U.P. Act No. 19 of 1972 is one year which has been renewed from time to time in accordance with the statutory provisions. The last renewal being for the year 2021, the petitioners are certified to carry on the business of manufacturing bidi.

4. The arguments of the learned Senior Advocate to challenge the orders impugned are two folds.

Firstly, it is contended that the petitioners are engaged in manufacturing bidi for the past several years and they are purchasing Tendu leaves from the respective State Department, inasmuch as, the collection and purchase of Tendu leaves have been monopolized by the State Government under the U.P. Act No. 19 of 1972. It is contended that under the Tendu Patta Act, 1972 the collection, sale, purchase and transportation of Tendu leaves is solely regulated by the State Government. The petitioners only purchase Tendu leaves from the respective State Department to use it to wrap the bidi as a "value added product" and do not purchase Tendu leaves from their growers or collectors and as such would not fall within the meaning of 'Traders' under the Act, 2002. After manufacturing bidi, they sell it as a "value added product" in the open market and, therefore, would not fall within the meaning of "manufacturer" from "biological resources" for "commercial utilization" as per the Act, 2002. It is the State Government which can only be termed as 'trader' of Tendu leaves and since the business or the commercial activities of the petitioners is/are regulated by the U.P. Act No. 19 of 1972, the provisions of the Act, 2002 would not be applicable.

In the second limb of submissions, it is argued that various notices in the month of December, 2020 and January, 2021 were issued to each petitioners separately, requiring them to comply with the provisions of Sections 7 of 24 of the Act, 2002. A common reply to the said notices was given by the petitioners on 25.2.2021 addressed to the Secretary, U.P. State Biodiversity Board, Lucknow raising objection with regard to the applicability of the Act, 2002. It was specifically pleaded therein that the Act, 2002 is in no way applicable to the petitioners and they cannot be made liable for any benefit sharing under the Act, 2002 or the Rules and the Regulations framed thereunder. The bidis manufactured by the petitioners' firms/Companies being "value added" product wherein other material as well are used which are excluded from the definition of the "biological resources" as defined under Section 2(c) of the Act, 2002, the utilization of Tendu leaves will not be covered under the definition of "commercial utilization" of "biological resources" within the meaning of Section 2(f) of the Act, 2002. The impugned notices seeking compliance of Sections 7 and 24 of the Biological Diversity Act, 2002 (the Act, 2002) are, thus, illegal and liable to be set aside.

5. It is vehemently argued by the learned Senior Counsel for the petitioners that none of above contentions of the petitioners have been dealt with while passing the order dated 6.7.2021 by the respondent no. 2 namely the U.P. State Biodiversity Board. The orders impugned, thus, suffer from the vice of violation of principles of natural justice. The orders impugned being result of non-application of mind, non-speaking orders are liable to be set aside.

It is lastly contended that the petitioners cannot be relegated to file appeal under Section 52-A of the Act, 2002 before the National Green Tribunal for two reasons; (i) firstly, that no Green Tribunal has been constituted within the State of U.P. and relegating the petitioners to approach the National Green Tribunal located in Delhi would cause irreparable loss to them and (ii) secondly, that since the orders impugned are non-speaking orders, the Court has inherent jurisdiction to quash the same in order to meet the ends of justice. In such a situation, the petitioners cannot be relegated to file appeal before the National Green Tribunal and as such the writ petition may not be dismissed on the ground of alternative remedy.

6. The notice of the writ petition on behalf of the respondent nos. 1 and 3 has been received in the office of the learned Chief Standing Counsel. There is no counsel designated to appear on behalf of the respondent no. 2/Board.

7. We have heard the learned Senior Counsel for the petitioners on the question of applicability of the Act, 2002 and do not find any reason to relegate the petitioners on the said issue, inasmuch as, being a Court of extraordinary jurisdiction, in exercise of the powers under Article 226 of the Constitution of India, the question of applicability of the Act can be looked into and need not be relegated to the National Green Tribunal, moreso, for the language employed in Section 52-A of the Act 2002, which provides the remedy of appeal to a person aggrieved by any determination of benefit sharing or order of the State Biodiversity Board.

Moving to the issue of applicability of the Act, 2002 in view of the arguments of the learned Senior Counsel for the petitioners in light of the U.P. Act No. 19 of 1972, it would be apposite to go through the provisions of both the Acts in order to ascertain the area or the field occupied by them. The U.P. Act No. 19 of 1972 has been enacted, in the public interest, to create State monopoly in the purchase and distribution of Tendu leaves and for matters connected therewith.

In the Act, 1972, "grower of Tendu leaves" means:-

(i) in respect of tendu leaves grown on land which is for the time being vested in and held by the State Government or constituted as a reserved forest or protected forest under the Indian Forest Act, 1927- the State Government Act XVI of 1927).

(ii) in respect of tendu leaves grown on land which is for the time being vested in and held by a Gaon Sabha or other local authority such Gaon Sabha or other local authority;

(iii) in respect of tendu leaves grown on land which is for the time being held by a tenure-holder-such tenure holder;

(iv) in respect of tendu leaves grown on land which is for the time being held by a mortgagee in possession or tenant or lessee on behalf of the State Government or such Gaon Sabha, local authority or tenure-holder as aforesaid- such mortgagee in possession, tenant or lessee, as the case may be;

(v) in respect of tendu leaves grown on land which is for the time being in the custody of a receiver appointed by a court or by some other authority in exercise of a power conferred by law- such receiver;

(vi) in respect of tendu leaves of on land which is for the time being held by any other person- such person;"

The Act, 1972 extends to the whole of Uttar Pradesh and Section 3 states that the entire area, to which the Act applies, may be divided into such number of units as the State Government may deem fit. Section 5 of the Act, 1972 puts restrictions on sale, purchase and transport of Tendu leaves. It provides that no person shall sell or purchase Tendu leaves to or from any person other than the State Government, officer or agent, in respect of the unit in which the leaves have grown, on any land of which he is not owner or tenure-holder.

8. It further restricts transportation of Tendu leaves except in the cases provided under sub-clauses (i) to (iii) of clause (c) of sub-section (1) of Section 5. Sub-section (2) of Section 5 provides for issuance of permits by the State Government or an officer authorised by it for purchase and transportation of Tendu leaves in or outside the State of U.P. The State Government is empowered to fix price at which Tendu leaves shall be purchased by or for it in each unit of the division during the concerned year, on the advice of the Advisory Committee constituted under Section 6 of the Act, 1972. Section 8 obliges the State Government to purchase at the price fixed under Section 7, all Tendu leaves offered for sale to or for it during the normal hours of business at a depot set up by the State Government in that behalf. Section 9 mandates registration of growers of Tendu leaves other than the State Government or a Gaon Sabha or other local authority as also manufacturer of bidi and exporter of Tendu leaves on payment of such fee and in such manner as may be prescribed. Section 10 provides that the Tendu leaves purchased by or for the State Government shall be sold or otherwise disposed of in such manner as the State Government may direct. Any contravention of the provisions of the Act, 1972 is an offence within the meaning of Chapter IX of the Indian Forest Act, 1927 and would be subjected to penalty as per Sections 13 and 14 of the Act, 1972. Section 18 of the Act, 1972 empowers the State Government to bring the rules to carry out the provisions of the Act and to prescribe for the publication of the price list of Tendu leaves.

9. The U.P. Tendu Patta (Vyapar Viniyaman) Niyamawali, 1972 defines 'manufacturer of bidis' under Rule 2(7) as including a person manufacturing bidis through mazdoors by advancing them either Tendu leaves or tobacco or both. The 'purchaser' within the meaning of Rule 2(9) means a person to whom Tendu leaves have been sold by the State Government under the Act. Rule 3-A provides that a person who has been appointed a purchaser as per the provisions of Rule 9 may be issued a permit in Form ''Q' by the Divisional Forest Officer authorising him to collect Tendu leaves from the grower(s) of the particular unit of which he is a purchaser. The permit will, however, contain the names of all growers of Tendu leaves in the unit and estimated quantity of leaves to be collected besides the name of the purchaser. The said purchaser shall collect Tendu leaves from the growers directly on the payment of price thereof as offered in the bid for the unit in his tender/auction, in the manner as agreed to under Form ''R'. The said purchaser shall also pay to such persons as are engaged in the collection of leaves, such collection charges as may have been notified in the Official Gazette. The purchaser, as noted above, shall be deemed to be an agent of the State Government for the purposes of Clauses (a) and (b) of sub-section (1) of Section 5 of the Act. Rule 8 which deals with the registration of manufacturers of bidis and/or exporters of Tendu leaves provides that the manufacturers of bidis shall be registered in the manner provided in the said rules after payment of an annual registration fee of Rs. 50/- and that every registered manufacturer of bidis shall maintain a register of account of Tendu leaves in Form ''1' and shall submit to the Divisional Forest Officer two returns of stock in prescribed Form ''J' on 31st March and 30th September; each year. The Conservator of Forest is empowered to terminate the agreement and cancel the certificate of registration of manufacturer of bidi who has been punished under Section 13 of the Act for committing any breach of the provisions of the Act and may also refuse registration for such further period as it may deem proper.

The manner of disposal of Tendu leaves has been provided in Rule 9 framed in accordance with Section 10(1) of the Act, 1972 which is by a tender notice advertised in the newspaper and selection of successful tenderer or bidder after issuance of the certificate of sale by the State Government or its officer or the agent.

10. A comprehensive reading of the U.P. Act No. 19 of 1972 and the Rules, 1972 framed thereunder makes it clear that the scope of the said Act is confined to the sale, purchase and transport of Tendu leaves at the price fixed by the State Government and the quantity permitted by it. The registration of manufacturers of bidis under the Act, 1972 is to regulate the purchase of Tendu leaves, i.e. to achieve the object of the U.P. Act No. 19 of 1972.

11. On the other hand, the Act, 2002 has been framed with the object to provide for conservation of biological diversity, sustainable use of its components and share and equitable sharing of the benefits arising out of the use of biological resources; knowledge and for matters connected therewith or incidental thereto. The said Act has been enacted in order to give effect to the United Nations Convention on biological diversity, to which India is a signatory on 5th June, 1992. The Convention has been signed by the contracting parties with the main objective of conservation of biological diversity being conscious of the importance of biological diversity for evolution and for maintaining life sustaining systems of the biosphere. The preamble of United Nations Convention on Biological Diversity affirms that the conservation of biological diversity is a common concern of humankind and reaffirms that States have sovereign rights over their biological resources and are responsible for conserving their biological diversity and for using their biological resources in a sustainable manner. It has taken note of the concern of the contracting parties that biological diversity has been insignificantly reduced by certain human activities and noted that it is vital to anticipate, prevent and attack the causes of significant reduction or loss of biological diversity at source. It was noted in the U.N. Convention signed at Rio de Janeiro on 5th June, 1992 that where there is a threat of significant reduction or loss of biological diversity, lack of full scientific certainty should not be used as a reason for postponing measures to avoid or minimize such a threat. The fundamental requirement for the conservation of biological diversity is the in-situ conservation of ecosystems and natural habitats and the maintenance and recovery of viable populations of species in their natural surroundings.

12. In order to provide for conservation, sustainable utilization and equitable sharing of benefit arising out of utilization of genetic resources and to give effect to the said convention, the Parliament has enacted the Biodiversity Act, 2002 which has been extended to the whole of India.

The words "biological diversity", "biological resources", "commercial utilization", "fair and equitable benefit sharing", "sustainable use" and "value added products" have been defined in the Act, 2002 in the following manner:-

"2. (b) "biological diversity" means the variability among living organisms from all sources and the ecological complexes of which they are part and includes diversity within species or between species and of eco-systems;

(c) "biological resources" means plants, animals and micro-organisms or parts thereof, their genetic material and by-products (excluding value added products) with actual or potential use or value but does not include human genetic material;

(f) "commercial utilization" means end user of biological resources for commercial utilization such as drugs, industrial enzymes, food flavours, fragrance, cosmetics, emulsifiers, oleoresins, colours, extracts and genes used for improving crops and livestock through genetic intervention, but does not include conventional breeding or traditional practices in use in any agriculture, horticulture, poultry, dairy farming, animal husbandry or bee keeping;

(g) "fair and equitable benefit sharing" means sharing of benefits as determined by the National Biodiversity Authority under section 21;

(o) "sustainable use" means the use of components of biological diversity in such manner and at such rate that does not lead to the long-term decline of the biological diversity thereby maintaining its potential to meet the needs and aspirations of present and future generations.

(p) "value added products" means products which may contain portions or extracts of plants and animals in unrecognizable and physically inseparable form."

13. Section 3 puts a restriction on certain persons, who are not citizen of India, a non-resident Indian and a body corporate or association not incorporated or registered in India for research or for commercial utilization or for bio-survey and bio-utilization of any biological resources occurring in India, without previous approval of the National Biodiversity Authority which is established under Section 8 of the Act, 2002. For others, such as Indian citizen, a body corporate, association or organization registered in India, Section 7 provides that no such person shall obtain any biological resource for commercial utilization, or bio-survey and bio-utilization for commercial utilization, except after giving prior intimation to the State Biodiversity Board concerned. The only exception to this provision is under the proviso to Section 7 which states that the said restriction shall not apply to the local people and communities of the area, including growers and cultivators of biodiversity and vaids and hakims, who have been practising indigenous medicine.

14. The National Biodiversity Authority is a body corporate established by notification in the Official Gazette by the Central Government. Functions and powers of the National Biodiversity Authority has been provided in Section 18 of the Act, 2002. Section 22 of the Act, 2002 contemplates establishment of the State Biodiversity Board by notification in the Official Gazette by the State Government for the purposes of the Act, which is a body corporate and shall discharge functions and powers as provided under Sections 23 and 24 of the Act, 2002. Under Section 23(b), one of the functions of the State Biodiversity Board is to regulate by granting of approvals or otherwise requests for commercial utilization or bio-survey and bio-utilization of any biological resources by Indians. Section 24 provides that any citizen of India or a body corporate, organization or association registered in India intending to undertake any activity referred to in Section 7 shall give prior intimation in such form as may be prescribed by the State Government, to the State Biodiversity Board. The State Biodiversity Board, on receipt of such intimation, may in consultation with the local bodies concerned and after making enquiries, by order, prohibit or restrict any such activity which in its opinion is detrimental or contrary to the objectives of conservation and sustainable use of biodiversity or equitable sharing of benefits arising out of such activity. Section 32 of the Act, 2002 contemplates Constitution of State Biodiversity Fund wherein all sums received by the State Biodiversity Board apart from the grants and loans received by it shall also be credited. The State Biodiversity Fund as per sub-section (2) of Section 32 shall be applied for (c) conservation and promotion of biological resources apart from other purposes as provided in clauses (a), (b), (d) and (e) therein.

15. Section 41 of the Act, 2002 contemplates Constitution of Biodiversity Management Committee by the local body within its area, for the purpose of promoting conservation, sustainable use and documentation of biological diversity including preservation of habitats etc.... The National Biodiversity Authority and the State Biodiversity Boards are required to consult the Biodiversity Management Committee while taking any decision relating to the use of biological resources and knowledge associated with such resources occurring within the territorial jurisdiction of the Biodiversity Management Committee. The Biodiversity Management Committee is also empowered to levy charges by way of collection fees from any person for accessing or collecting any biological resource for commercial purposes from areas falling within its territorial jurisdiction. The Local Biodiversity Fund constituted under Section 43 as contained in Chapter XI of the Act, 2002 is to be utilized for conservation and promotion of biodiversity in the areas falling within the jurisdiction of the concerned local body and for the benefit of the community in so far such use is consistent with conservation of biodiversity.

16. Section 21 of the Act, 2002 deals with the determination of equitable benefit sharing by National Biodiversity Authority and reads as under:-

"21. Determination of equitable benefit sharing by National Biodiversity Authority.--

(1) The National Biodiversity Authority shall while granting approvals under section 19 or section 20 ensure that the terms and conditions subject to which approval is granted secures equitable sharing of benefits arising out of the use of accessed biological resources, their by-products, innovations and practices associated with their use and applications and knowledge relating thereto in accordance with mutually agreed terms and conditions between the person applying for such approval, local bodies concerned and the benefit claimers.

(2) The National Biodiversity Authority shall, subject to any regulations made in this behalf, determine the benefit sharing which shall be given effect in all or any of the following manner, namely:--

(a) grant of joint ownership of intellectual property rights to the National Biodiversity Authority, or where benefit claimers are identified, to such benefit claimers;

(b) transfer of technology;

(c) location of production, research and development units in such areas which will facilitate better living standards to the benefit claimers;

(d) association of Indian scientists, benefit claimers and the local people with research and development in biological resources and bio-survey and bio-utilisation;

(e) setting up of venture capital fund for aiding the cause of benefit claimers;

(f) payment of monetary compensation and other non-monetary benefits to the benefit claimers as the National Biodiversity Authority may deem fit.

(3) Where any amount of money is ordered by way of benefit sharing, the National Biodiversity Authority may direct the amount to be deposited in the National Biodiversity Fund:

Provided that where biological resource or knowledge was a result of access from specific individual or group of individuals or organisations, the National Biodiversity Authority may direct that the amount shall be paid directly to such individual or group of individuals or organizations in accordance with the terms of any agreement and in such manner as it deems fit.

(4) For the purposes of this section, the National Biodiversity Authority shall, in consultation with the Central Government, by regulations, frame guidelines."

17. The Biological Diversity Rules, 2004 have been framed in exercise of the powers conferred by Section 62 of the Biological Diversity Act, 2002.

Rule 20 (1) & (2) of the Rules, 2004 provide criteria for "equitable benefit sharing" as contemplated in Section 21. As per the said provisions, the Authority namely the National Biodiversity Authority shall formulate the guidelines to describe the benefit sharing formula by notification in the Official Gazette, which shall provide for such monetary and other benefits as given in the sub-rule (2). Such benefit sharing formula as per sub-rule (3) of Rule 20 shall be determined on case-by-case basis. Rule 20(5) and (6) provides that the quantum of benefits shall be mutually agreed upon between the persons applying for approval before the authority and depending upon each case, the authority shall stipulate the time frame for assessing benefit sharing on the nature of benefits being short, medium and long term. Rule 20(7) and (10) states that the authority shall stipulate that benefits shall ensure conservation and sustainable use of biological diversity and that it shall monitor the flow of benefits determined under sub-rule (4) in a manner determined by it.

In exercise of powers conferred by Section 64 read with sub-section (1) of Section 18 and sub-section (4) of Section 21 of the Biological Diversity Act, 2002, the Regulations named as Guidelines on Access to Biological Resources and Associated Knowledge and Benefits Sharing Regulations, 2014 (In short as "the Regulations, 2014") have been framed.

Regulation 2 of the Regulations, 2014 provides that:-

"2. Procedure for access to biological resources, for commercial utilization or for bio-survey and bio-utilization for commercial utilization. -- (1) Any person who intends to have access to biological resources including access to biological resources harvested by Joint Forest Management Committee (JFMC)/ Forest dweller/ Tribal cultivator/ Gram Sabha, shall apply to the NBA in Form-I of the Biological Diversity Rules, 2004 or to the State Biodiversity Board (SBB), in such form as may be prescribed by the SBB, as the case may be, along with Form ''A' annexed to these regulations.

(2) The NBA or the SBB, as the case may be, shall, on being satisfied with the application under sub-regulation (1), enter into a benefit sharing agreement with the applicant which shall be deemed as grant of approval for access to biological resources, for commercial utilization or for bio-survey and bio-utilization for commercial utilization referred to in that sub-regulation."

Regulations 3 and 4 deal with the formula and mode of benefit sharing for access to biological resources for commercial utilization which read as under:-

"3. Mode of benefit sharing for access to biological resources, for commercial utilization or for bio-survey and bio-utilization for commercial utilization.-- (1) Where the applicant/ trader/ manufacturer has not entered into any prior benefit sharing negotiation with persons such as the Joint Forest Management Committee (JFMC)/ Forest dweller/ Tribal cultivator/ Gram Sabha, and

purchases any biological resources directly from these persons, the benefit sharing obligations on the trader shall be in the range of 1.0 to 3.0% of the purchase price of the biological resources and the benefit sharing obligations on the manufacturer shall be in the range of 3.0 to 5.0% of the purchase price of the biological resources:

Provided that where the trader sells the biological resource purchased by him to another trader or manufacturer, the benefit sharing obligation on the buyer, if he is a trader, shall range between 1.0 to 3.0% of the purchase price and between 3.0 to 5.0%, if he is a manufacturer:

Provided further that where a buyer submits proof of benefit sharing by the immediate seller in the supply chain, the benefit sharing obligation on the buyer shall be applicable only on that portion of the purchase price for which the benefit has not been shared in the supply chain.

(2) Where the applicant/ trader/ manufacturer has entered into any prior benefit sharing negotiation with persons such as the Joint Forest Management Committee (JFMC)/ Forest dweller/ Tribal cultivator/ Gram Sabha, and purchases any biological resources directly from these persons, the benefit sharing obligations on the applicant shall be not less than 3.0% of the purchase price of the biological resources in case the buyer is a trader and not less than 5.0% in case the buyer is a manufacturer.

(3) In cases of biological resources having high economic value such as sandalwood, red sanders, etc. and their derivatives, the benefit sharing may include an upfront payment of not less than 5.0%, on the proceeds of the auction or sale amount, as decided by the NBA or SBB, as the case may be, and the successful bidder or the purchaser shall pay the amount to the designated fund, before accessing the biological resource.

4. Option of benefit sharing on sale price of the biological resources accessed for commercial utilization under regulation 2.-- When the biological resources are accessed for commercial utilization or the bio-survey and bio-utilization leads to commercial utilization, the applicant shall have the option to pay the benefit sharing ranging from 0.1 to 0.5 % at the following graded percentages of the annual gross ex-factory sale of the product which shall be worked out based on the annual gross ex-factory sale minus government taxes as given below:-

Annual Gross ex-factory sale of product Benefit sharing component

Up to Rupees 1,00,00,000 0.1 %

Rupees 1,00,00,001 up to 3,00,00,000 0.2 %

Above Rupees 3,00,00,000 0.5 % "

Regulation 17, however, exempts certain activities and classes of persons from requiring approval of the National Biodiversity Authority or State Biodiversity Board, named as:-

"17. Certain activities or persons exempted from approval of NBA or SBB. --

The following activities or persons shall not require approval of the NBA or SBB, namely:-

(a) Indian citizens or entities accessing biological resources and/ or associated knowledge, occurring in or obtained from India, for the purposes of research or bio-survey and bio-utilization for research in India;

(b) collaborative research projects, involving the transfer or exchange of biological resources or related information, if such collaborative research projects have been approved by the concerned Ministry or Department of the State or Central Government and conform to the policy guidelines issued by the Central Government for such collaborative research projects;

(c) local people and communities of the area, including growers and cultivators of biological resources, and vaids and hakims, practising indigenous medicine, except for obtaining intellectual property rights;

(d) accessing biological resources for conventional breeding or traditional practices in use in any agriculture, horticulture, poultry, dairy farming, animal husbandry or bee keeping, in India;

(e) publication of research papers or dissemination of knowledge, in any seminar or workshop, if such publication is in conformity with the guidelines issued by the Central Government from time to time;

(f) accessing value added products, which are products containing portions or extracts of plants and animals in unrecognizable and physically inseparable form; and

(g) biological resources, normally traded as commodities notified by the Central Government under section 40 of the Act."

A notification dated 7th April, 2016 has been published in the Gazette of India by the Central Government in exercise of the powers conferred by Section 40 of the Biological Diversity Act, 2002, which contains the table having the details of said biological resources which are normally traded commodities subject to the terms enumerated in the notes given below in the said table.

18. We may note that the said table gives details of the items, the biological resources, illustrative trade or common name, plant part and the source from which the said plant part is obtained.

19. We may note, at the outset, that Tendu leaves is not enlisted in the aforesaid notification as "normally traded commodities" nor it is exempted in any of the clauses of Regulation 17 of the Regulations, 2014.

20. The meaning of the "biological resources" as contained in Section 2(c) of the Act shows that it includes plants with actual or potential use or value and excludes "value added products" and "human genetic material". The "commercial utilization" as defined in Section 2(f) means end user of biological resources for commercial utilization and excludes conventional breeding or traditional practices in use in any agriculture, horticulture, poultry, dairy farming, animal husbandry or bee keeping. The "value added products" as defined in Section 2(p) means products which may contain portions or extracts of plants in unrecognizable and physically inseparable form. The "fair and equitable benefit sharing" as defined in Section 2(g) as determined by the National Biodiversity Board as per the criteria provided in Rule 20 of the Rules, 2004 is for the purpose to ensure the conservation and sustainable use of biological diversity.

21. The Regulations, 2014 framed by the National Biodiversity Authority in exercise of the power conferred by Section 64 read with Section 21(4) of the Act, 2002 contains guidelines for access to biological resources and provides for benefit sharing formula. Regulation 2 clearly states that any person who intends to have access to biological resources for commercial utilization shall apply to the National Biodiversity Authority or the State Biodiversity Authority, in the prescribed format, as the case may be, and further states that such authority or the Board shall enter into a benefit sharing agreement with the applicant on being satisfied with the application so moved and such agreement shall be deemed as grant of approval for access to biological resources for commercial utilization. Regulations 3 and 4 provides the mode and option of benefit sharing for access to biological resources, wherein formula for the applicants/traders/manufacturers who have entered into any prior benefit sharing negotiation with the concerned person or who have not entered into any such negotiation has been prescribed.

22. The object and purpose of the Act, 2002 by regulating use of biological resources for commercial utilization is with the main objective of conservation of biological diversity and sustainable use of its components. By providing the idea of fair and equitable sharing of the benefits arising out of biological resources, as determined by the National Biodiversity Authority under Section 21, the object is to achieve the end result, the conservation of biological resources and its sustainable utilization, i.e. use of components of biological diversity in such manner and at such rate that does not lead to the long term decline of the biological diversity, and thereby maintaining its potential to meet the needs and aspirations of present and future generations. The idea, thus, is to give back to the Mother Nature the products which have been used by the humankind for their sustenance or usage.

The "benefit claimers" as per Section 2(a) are the conservers of biological resources, creators and holders of knowledge and information relating to use of such biological resources. The "commercial utilization" as defined under the Act, 2002 means the end user of biological resources for commercial utilization and only excludes the conventional or traditional practices in use of such resources in any agriculture or related activity. Being a signatory to the United Nations Convention on Biological Diversity at Rio de Janeiro, India was committed to bring appropriate legislation in the Country in order to give effect to the provisions of the treaty. It was in this background and to achieve the purpose and objects noted above, the Parliament enacted the Biodiversity Act in the year 2002. The first and foremost objectives of the Act, 2002 is the conservation of biological diversity. The second is sustainable use of its components and third is fair and equitable sharing of the benefits arising out of utilization of biological resources.

23. Looking to the above, we may deal with the first argument of the learned Senior Counsel for the petitioners that the petitioners being registered firms and companies under the U.P. Act No. 19 of 1972 are excluded from the purview of the Act, 2002. We are afraid to accept the said submission and it is liable to be rejected, at the outset, in view of the scope of the Act, 2002 and the language employed in Section 59 which says that the provisions of the Act, 2002 shall be in addition to, and not in derogation of, the provisions of any other law, for the time being in force, relating to forests or wildlife. The Act, 2002, thus, supplant the existing provisions of the U.P. Act No. 19 of 1972, i.e. the U.P. Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1972.

24. We may note as a clarification to the above opinion that the object and purpose of the U.P. Act No. 19 of 1972 is to regulate the purchase and distribution of Tendu leaves, which is admittedly a plant product and would fall within the meaning of "biological resources" under Section 2(c) of the Act, 2002. The object of the Act, 1972 is to create monopoly of the State, which is one of the growers of the Tendu leaves, in the matter of sale and purchase of Tendu leaves at a fixed price and the manufacturers of bidi (which is the end product), are required to be registered under the Act, 1972 in order to participate in the tender which is to be held in accordance with Rule 9 of the Rules, 1972 for purchase of a fixed quantity of Tendu leaves at a fixed price in a particular year.

Whereas under the Act, 2002, the State Biodiversity Board is established as a body corporate to achieve the object of implementing concept of sustainable use of biological resources "as a component of biological diversity" with the main object of conservation of biological diversity. Section 7 cast an obligation on any person, an individual or association or organization or a body corporate registered in India to give prior intimation to the Board for obtaining any biological resource for commercial utilization.

The purpose and object with which the Act, 2002 has been enacted is clearly distinct from the U.P. Act No. 19 of 1972. By the mere fact that the State Government regulates sale and purchase of Tendu leaves, which is used as an end product in manufacturing bidis and that the manufacturers of bidi are required to be registered under the U.P. Act No. 19 of 1972, it cannot be said that by the registration of the bidi manufacturers under the Act, 1972, their obligation under the Act, 2002 to give prior intimation to the State Biodiversity Board for obtaining the biological resources (Tendu leaves) for commercial utilization is meted out. The traders and manufacturers of biological resources, both, are covered under the Regulations, 2014 framed by the National Biodiversity Authority which provides the formula of benefit sharing for access to biological resources for commercial utilization. The idea of benefit sharing is to create a fund which is called as "National Biodiversity Fund" which includes any charges and royalty received by the National Biodiversity Authority under the Act and grants and loans received by the National Biodiversity Authority from the Central Government. The State Biodiversity Fund as provided in Section 32 of the Act, 2002 is created by the grants and loans from the State Government as also the grants and loans made by the National Biodiversity Authority and sum received from such other sources as decided upon by the State Government. The above funds are to be utilized/applied for the conservation and promotion of biological resources as is provided in clause (c) of sub-section (2) of Section 32 of the Act, 2002, apart from other purposes.

25. We may note, at the cost of repetition, that the Regulations, 2014 providing for the guidelines for access to biological resources for commercial utilization, clearly states that any person who intends to have access to biological resources including access to biological resources harvested by Joint Forest Management Committee/Forest dweller/Tribal cultivator/Gram Sabha, shall have to apply to the State Biodiversity Board, in the prescribed format as annexed to the said regulations. The State Biodiversity Board on dealing with the said application, if satisfied with the information given therein may enter into a benefit sharing agreement with the applicant which shall be deemed as grant of approval for access to biological resources for commercial utilization. On such agreement being arrived, the mode of benefit sharing would be as per Regulation 3(2) of the Regulations, 2014. For such manufacturers, traders and applicants who have not entered into prior benefit sharing negotiation with the person such as Joint Forest Management Committee/Forest dweller/Tribal cultivator/Gram Sabha and purchase any biological resources directly from these persons, the benefit sharing obligations shall be in accordance with the formula provided in Regulation 3(1) of the Regulations, 2014. An option has been given in Regulation 4 for benefit sharing on sale price of the biological resources accessed for commercial utilization under the Regulation 2 at the graded percentages of the annual gross ex-factory sale of the product as per the formula provided in Regulation 4 of the Regulations, 2014.

26. There is no challenge to the provisions of Regulations, 2014 which has been framed by the National Biodiversity Authority in exercise of powers conferred under sub-section (4) of Section 21. Section 21(2) empowers the National Biodiversity Authority to determine the benefit sharing formula subject to the regulations made by it which shall be in the manner as provided in clauses (a) to (f) of sub-section (2) of Section 21. Clause (f) of sub-section (2) provides that the benefit sharing may be in the manner of payment of monetary compensation and other non-monetary benefits to the benefits claimers as the National Biodiversity Authorities may deem fit. The "benefits claimers" as defined under the Act, noted above, include the conserver of biological resources who may be the growers of the plant parts which is being used for commercial utilization.

27. Going a step further, we may note that in the matter of Tendu leaves, the "grower of Tendu leaves" may be the State Government or the local authority or Gram Sabha in respect of Tendu leaves grown on the land vested in and held by it and tenure holder in respect of Tendu leaves grown on the land held by such tenure holder. The U.P. Act No. 19 of 1972 though creates State's monopoly in the matter of sale, purchase of distribution of Tendu leaves but cast on obligation on the State to purchase all Tendu leaves offered for sale and also provides that in case, the State Government refuses to purchase any leaves terming it as unfit for the purposes of manufacturing bidis, the person aggrieved by such rejection may make a complaint to the concerned officer and in case, the rejection is found improper, the aggrieved person may be compensated for any damage or loss suffered by him because of such improper rejection, i.e. on account of the Tendu le

Please Login To View The Full Judgment!

aves becoming unsuitable for manufacturers of bidis in the interregnum (on account of improper rejection). The State Government, thus, while regulating the sale and purchase of Tendu leaves is also duty bound to ensure that all Tendu leaves grown in the area regulated by it are disposed of in a proper manner and the "growers of Tendu leaves" other than the State may not suffer for any improper act of its officers. 28. The above discussion, thus, make it clear that both the Acts namely Tendu Patta Act, 1972 and the Act, 2002 operate in different fields and the fields/areas occupied by them are not overlapping. They have been enacted with distinct objects and registration in Tendu Patta Act, 1972 would not exclude the petitioners from the purview of the Act, 2002, to share the benefits obtained from biological resources used for commercial purposes, to contribute to the fund for conservation of biological diversity and ensure sustenance of its components. 29. Lastly, the contention of the learned Senior Counsel for the petitioners that the petitioners being manufacturers of bidi shall not fall within the purview of Act, 2002 because of the language employed in Section 2(c) which excludes the "value added products" from the meaning of biological resources, is found misconceived, inasmuch as, the manufacturers of the "value added products" which contain portions or extracts of plants, which is produced by commercial utilization of the biological resource, i.e. by the end user of the biological resources (including plants) is covered in the benefit sharing formula, as formulated in Regulations 3 and 4 of the Regulations, 2014. The exclusions as provided in the proviso to Section 7 of the Act, 2002 and Regulation 17 of the Regulations, 2014 are not attracted in the case of the petitioners as they can neither be said to be the growers and cultivators of biodiversity within the meaning of the proviso to Section 7 nor can be said to be dealing with "biological resources" which are "normally traded as commodities" notified by the Central Government under Section 40 of the Act. The petitioners are, thus, under obligation to contribute to the National Biodiversity Fund by providing fair and equitable benefit sharing for commercial utilization of biological resource (Tendu leaves in this case) so as to achieve the objective of the Biodiversity Act, 2002, for application/utilization of the said funds for conservation and promotion of biological resource (Tendu leaves, a plant product). 30. Thus, on both the above counts, the challenge to the decision of the respondent authorities asking the petitioners to comply with the provisions of the Biological Diversity Act, 2002 cannot be sustained. The competence of the U.P. State Biodiversity Board to put the petitioners to notice to comply with the provisions of the Act, 2002 cannot be questioned. 31. Now, only question that may arise is of computation of the benefits received by the petitioners from commercial utilization of the biological resources and their shares as per the formula provided in the Regulations, 2014. In this regard, we may note that the petitioners have been asked to submit information in the requisite format and the benefits to be shared by them as per their self-assessment in Form-A of Regulations, 2014. The record indicates that the petitioners have not provided information for use of biological resource which is to be furnished by them in Form-A as self-disclosure till date. The question of computation of their liabilities, therefore, does not arise. 32. We leave it open, that in the event, the petitioners comply with the direction of the respondent no. 2 namely the U.P. State Biodiversity Board by submitting the information in the prescribed format as per the Regulations, 2014, it would be open for them to raise dispute with regard to the computation of their liability towards fair and equitable sharing of benefits, which may arise and the Board shall be required to deal with the same in its final decision. We may also leave it open for the petitioners to seek opportunity of hearing at the time of computation of their liabilities by writing to the Board at the time of submission of the prescribed form, alongwith the copy of this decision. In case, the petitioners comply with the above directions, the respondent no. 2/U.P. State Biodiversity Board shall be under obligation to provide adequate opportunity to the petitioners on the issue of quantum and shall be required to pass a reasoned and speaking order, in accordance with law, determining the obligations of the petitioners in quantum as sharing of benefit as per Section 21 of the Act, 2002 readwith Regulations 3 and 4 of the Regulations, 2014. With the above observations and directions, the writ petition is disposed of.
O R