TMI Blog1995 (9) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of katha was being undertaken in bhatties only during the winter season. In the year 1975, however, a mechanised unit was established in the State by Shankar Trading Company for the manufacture of katha. The manufacture of katha can go on round the year in a mechanised unit. The mechanised unit consumes far larger quantities of khair wood than all the bhatties put together. Himachal Pradesh is an industrially backward State. Like other States, it too has been evolving schemes for encouraging the industrialisation of the State. By a Notification dated May 13, 1974, the Governor of Himachal Pradesh established the Industrial Projects Approval and Review Authority (IPARA) comprising Chief Secretary to the Government, Secretaries to the Departments of Multipurpose Projects and Power, Public Works, Industries and Finance besides Chairman of the Himachal Pradesh State Electricity Board, Chief Conservator of Forests, Chief Engineer, P.W.D. and the Director of Industries. The terms of reference and the activities to be undertaken by the IPARA were specified as under : (i) To act as the focal point for dissemination of information regarding programmes of Government assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and 5 to 7 for government's approval. It rejected the proposals of others including the units at S1.Nos.4 and 8 in the Table on the ground that they failed to take any steps to set up the factories pursuant to sub- committee's approval. The matter was then placed before H.E. The Governor. Out of the said six units, only the first three units have been approved by the Governor. In the case of units at S1.Nos.5 to 7, the Governor has declined to approve. This decision was taken by the Governor of Himachal Pradesh on September 15, 1993. The proceedings of the meeting of IPARA held on August 28, 1993 and the order of H.E. The Governor have been placed before us. (Himachal Pradesh was under the President's rule then.) Just about the time the Governor (government) was taking his decision, Writ Petition No.1455 of 1993 came to be filed by Sri Yogendra Chandra, M.L.A. for issuance of an appropriate writ restraining the government from permitting the establishment of any katha units in the State on the ground that such establishment would lead to indiscriminate felling of khair trees which would have a deep and adverse effect upon the environment and ecology of the State. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the High Court. The learned Additional Solicitor General, Sri V.R. Reddy, submitted that the provisional registration or approval , as it is called by IPARA, did not confer any right upon any of the units inasmuch as the said approval was subject to final approval by the government. The Governor has taken into consideration the availability of raw material in the State and arrived at the conclusion that it can sustain only three units viz., Doon Katha, Orient Herbs and Sagar Katha besides the existing one. Of these three units, Doon Katha is a very small unit; its consumption is almost as much as that of a bhatti. Thus, in truth, only two units have been permitted. It is true that the IPARA recommended the case of six units, viz., the three units aforesaid and Ganesh Wood Products, Naman Wood Products and Dev Bhoomi Industries but the Governor did not agree with the said recommendation and selected the first three units applying the principle 'first come, first served'. No valid objection can be taken to the orders of the government since they are conceived in public interest keeping in view the availability of the raw material. The learned Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel submitted further that on the basis of approval granted by IPARA, the government granted registration to Ganesh Wood Products on June 21, 1993 and has communicated the same to it. Indeed, by a subsequent communication dated 18th August, 1993, the government restricted its capacity to 3600 metric tons (2400 cu. meters). Even the full IPARA meeting held on August 28, 1993 recommended the case of Ganesh Wood Products. The rejection by the Governor is based on no reasons and is, therefore, liable to be set aside as an arbitrary decision. Learned counsel relied upon certain material in support of his proposition that the particulars of raw material available in the State is more than sufficient to sustain not only the three units permitted by the Governor but also the three units recommended by the IPARA in its meeting held on August 28, 1993. He submitted that bonafides of Sri Yogendra Chandra are suspect and that he has been put up really by Shankar Trading Company. So far as Shankar Trading Company is concerned, the learned counsel submitted that it is seeking to merely ensure that all the raw material in the State is reserved for itself by excluding all other units. It is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al amounts in acquiring the land and setting up the units and if only they had been given an opportunity, they would have established their contention. They supported the submissions of Sri Gopal Subramaniam and Sri Dave. Sri Dholakia and Sri M.S.Ganesh appearing for Sagar Katha (yet another respondent) disputed the several contentions raised by the learned counsel for the appellants and submitted that the Governor has rightly granted permission to Sagar Katha and that there are absolutely no grounds to interfere with the same at the instance of Yogendra Chandra or Shankar Trading Company. Sri Balakrishnan, learned counsel for Orient Herbs advanced submissions on the same lines. LAW APPLICABLE: Katha industry is not in the schedule to the Industries Development and Regulation Act. The provisions regulating the establishment of industries contained in the said Act, therefore, have no application to this industry. There is no corresponding enactment made by the legislature of the State of Himachal Pradesh governing the establishment of industries similar to I.D.R. Act. At the same time, by virtue of Entry 24 of List-II of the Seventh Schedule to the Constitution, industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s equally relevant to note that the Notifications constituting or reconstituting the IPARA do not say anywhere that no industry can be established unless it applies to IPARA or unless its application is processed by IPARA, nor do they say that unless approved by the Government, no industry can be established in the State. This means that if there are any enactments or other statutory provisions governing the establishment of industries, they have to be complied with by the intending entrepreneurs. The IPARA or the Government of Himachal Pradesh propose neither add to those provisions nor do they purport to detract therefrom. Evidently because it was in their interest, the fifteen units proposing to establish katha factories in Himachal Pradesh (including the units concerned in this batch of appeals) applied to IPARA - and during the period the IPARA was not in existence, to the Director of Industries - for approval of their projects. They knew full well that if their applications are approved by the government, they will have several advantages in the matter of acquiring land, obtaining power connection, obtaining water supplies and in various other matters relevant to successfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for approval then he must submit to the regimen established by the government in that behalf and to its policies. While approving the projects, it is certainly open to the government to say that having regard to the availability of the raw material it shall not approve more than a particular number of units in a particular industry or of more than a particular capacity. It is entitled to say that the available raw material in the State should be exploited in an even and balanced manner keeping in mind the availability of the raw material in the years to come. It is entitled to make an estimate of the raw material available from the government sources as also from the private sources and say that the raw material so available can feed only so many industries and no more. We may make it clear that we do not approve or accept the contention urged by Sri Dave that as on today there is no law preventing any person from establishing any industry anywhere so long as it is not governed by the I.D.R. Act. That question does not arise in these writ petitions and appeals. All that we have stated is that if that is what any person thinks, it is for him to act according to his conviction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. While we do not think it necessary to refer to all of them, it would be sufficient to refer to certain provisions of the Environment (Protection) Act, 1986 and the rules made thereunder and to refer briefly to the scheme of the Himachal Pradesh enactments. The preamble to the Environment (Protection) Act reads: An Act to provide for the protection and improvement of environment and for matters connacted therewith. Whereas decisions were taken at the United Nations Conference on the Human Environment held at Stockholm in June, 1972, in which India participated, to take appropriate steps for the protection and improvement of human environment; And whereas it is considered necessary further to implement the decisions aforesaid in so far as they relate to the protection and improvement of environment and the prevention of hazards to human beings, other living creatures, plants and property. Clause (a) of Section 2 defines the expression environment in a comprehensive manner to take in all factors affecting environment including preservation of forests. It reads: 'Environment' includes water, air and land and the inter-relationship which exists among an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late the location of industries which also includes the power to prohibit their establishment as well. Having regard to the objectives underlying the Act and the alarming diminution of forest cover in the country, the said provisions should be understood not so much as conferring powers on the Central Government but as creating an obligation upon it to exercise those powers for achieving the objectives underlying the Act. It is absolutely essential that the Central Government issues orders under and as contemplated by Rule 5, if not already issued. The Himachal Pradesh Forest Produce (Regulation of Trade) Act, 1982 contains elaborate provisions regulating sale, purchase, transfer and trade of forest produce including the forest produce from private lands. It is, of course, true that khair trees were first included in the Schedule to the Act in April 1991 and deleted in November 1991, but it can always be included in the schedule again, if the government thinks it necessary, as contemplated by Section 18 of the Act. The Act permits government monopoly in the matter of sale of forest produce covered by the Act. The Himachal Pradesh Land Preservation Act, 1978 confers extensive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leave increasing numbers of people poor and vulnerable, while at the same time degrading the environment. How can such development serve next century's world of twice as many people relying on the same environment? ....More than 90 per cent of the increase (in population) will occur in the poorest countries..... Meanwhile, the industries most heavily reliant on environmental resources and most heavily polluting are growing most repidly in the developing world, where there is both more urgency for growth and less capacity to minimize damaging side effects.......Ecology and economy are becoming ever more interwoven - locally, regionally, nationally, and globally - into a seamless net of causes and effects....... The other great institutional flaw in coping with environment/development challenges is governments' failure to make the bodies whose policy actions degrade the environment responsible for ensuring that their policies prevent that degradation. In Chapter -12 entitled Towards Common Action: Proposals for Institutional and Legal Change , the Commission states, inter alia, that: developing countries face the challenges of desertification, deforestation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined largely by the way the land was used. While recognising the influence of environment on history, they fail to note that man usually changed or despoiled his environment. How did civilised man despoil this favourable environment? He did it mainly by depleting or destroying the natural Quoted in Small is beautiful - A study of economics as if people mattered by E.F.Schumacher. resources. He cut down or burned most of the usable timber from forested hillsides and valleys. He over-grazed and denuded the grasslands that fed his livestock. He killed most of the wildlife and much of the fish and other water life. He permitted erosion to rob his farm land of its productive topsoil. He allowed eroded soil to clog the streams and fill his reservoirs, irrigation canals, and harbours with silt. In many cases, he used and wasted most of the easily mined metals or other needed minerals. Then his civilisation declined amidst the despoilation of his own creation or he moved to new land. There have been from ten to thirty different civilisations that have followed this road to ruin (the number depending on who classifies the civilisations). We may add that in the present-day worl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch anti-pollution measures to be installed should conform to the effluent and emission standard prescribed by the H.P. State Pollution Control Board. The equipment for anti-pollution measures will form a part of your project report. The design of the equipment will have to be got approved from the H.P. State Pollution Control Board. Further, adequate industrial safety measures as provided in the relevant Act should be made to the satisfaction of the State Government. 3. This letter of approval does not constitute an authorisation under Industrial Development Regulation Act, 1951 or any other relevant acts of the Govt. of India. Wherever applicable such permission or clearances as may be required under the provisions of such Acts should be separately obtained by you before taking any effective steps for the implementation of the project. 4. Further this approval of project does not imply any commitment what-so- ever on the part of the Government to provide finance, raw materials, Land etc. or any other assistance. Request for such assistance would be considered separately on merits after you have made the necessary application to the concerned authorities. You are, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Forest of the Government of India became alarmed. On September 23, 1992, the Government of India, Ministry of Environment and Forest addressed a letter to the Principal Chief Conservator of Forests, Government of Himachal Pradesh requesting him to furnish basic information relevant to the State of Himachal Pradesh in the proformas enclosed to the said letter which was necessary to review the production and sale of khair wood/teak wood/resin in the country . A reminder was sent on April 29, 1993. The concern of the Government of India is evident from the letter dated October 6, 1993 addressed to the Forest Secretary, Government of Himachal Pradesh, which is worth reproducing: GOVERNMENT OF INDIA MINISTRY OF ENVIRONMENT AND FORESTS Paryavaran Bhawan, C.G.O. Complex, Lodi Road, New Delhi Pin 110 003. No.3-13/93-94 Dated: 6th October, 1993 To The Forest Secretary, Government of Himachal Pradesh, Shimla. Subject: Registration of New Katha units- availability of khair wood. Sir, I am directed to refer to this Ministry's letter No. 7-4/92-SU dated 18.9.92 (copy enclosed) regarding review of production and disposal of Khair Wood and to say that the information sought has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the media and other public fora regarding the paril to the forest wealth of the State on account of indiscriminate approval of katha factories and tried to restrict the number as much as possible. But then it was faced with the problem that pursuant to the approvals granted by the sub-committee of IPARA, certain units had already taken steps for setting up of the factories. It was noted that of the fifteen units to which approval was so accorded, Doon Katha industries was promoted by a woman entrepreneur and was a very small industry analogous to a bhatti and further that installation of its factory was almost complete. It was, therefore, decided not to disturb the approval granted to it. It was also found that five other units, viz., Orient Herbs, Sagar Katha, Dev Bhoomi Industries, Naman Wood Products and Ganesh Wood Products are in the process of establishing their units. It noted that the capacity of these industries has already been restricted to 3600 metric tonnes. The IPARA was of the opinion that the approximate availability of khair wood in the State is 30,000 cubic metres and that it would be sufficient to feed the existing bhatties, existing mechanised factory (Shankar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial needed for meeting its own requirement preferably by establishment of a direct relation between the factory and the individuals who can grow the raw material by supporting the individuals with inputs including credit, constant technical advice and finally harvesting and transport services. (ii) State Forest Policy: Para No. 25 of the H.P. State Forest Policy states that until detailed forest resources, wood production and consumption studies have been carried out to determine wood balances specially of broad leaved species, available at present and in future (projections over a period of twenty An echo of sustainble development emphasised by The World Commission on Environment and Development. years) for various industries, no commitment for supply of raw material should be held out to the wood based industries. The consequences of proposed moratorium of commercial fellings shall also have to be fully kept in view . Regarding establishment of forest based industries particularly those based on khairwood, it is stated that so far there is only one mechanized katha unit apart from about 100 Bhatties. As per the decision of the Government while the mechanized unit is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from private land. However, the export from the State of khair wood obtained from private land is regulated in terms of the Government's order contained in Annexure R-19. The khair wood extracted from Government Forest by H.P. State Forest Corporation Ltd. and disposed through open auction is required to be utilised within the State of Himachal Pradesh only. There is no restriction on the import of khair wood from outside the State. It is clear from the above affidavit that there has been no systematic or a proper survey of the availability of khair wood in the State. The availability of khair wood is determined on the basis of quantity extracted during the years 1990-91 to 1992-93 in the case of government forests and 1990-91 and 1991-92 in the case of private forests. It is obvious, and an indisputable proposition, that extraction in a given year or in certain given years is no index of availability. The estimate of availability on the basis of extraction in a given two or three years' period is bound to be faulty. Extraction in a given year or years may be more or less than the average annual availability. THE MYOPIC APPROACH OF THE SUB-COMMITTEE OF THE IPARA I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not make any such distinction. The perils of ignoring the above policies and considerations cannot be over-emphasised. We must say that in the light of the above considerations, the High Court was not right in observing that Sri Yogendra Chandra cannot be accepted as a public spirited citizen approaching the court to protect public interest - more so, when it has recorded a simultaneous finding that there is no evidence of collusion between him and Shankar Trading Company (Mahesh Udyog). The credentials of Sri Yogendra Chandra appear to be impeccable. He is not only a member of the Himachal Pradesh Legislative Assembly but also the Convenor of the Indian National Trust for Art and Cultural Heritage. He is also the President of the Himalayan Wild Life and Environment Preservation Society. The said organisations may be big or small, may be well- established ones or recently started ones - that is immaterial. Once it is found that he was not acting at the instance of or at the behest of or for protecting the interests of Shankar Trading Company, there was no reason to hold that he was not acting bonafide in approaching the court to preserve the forest wealth of the State in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r instance. The fact that the recent decision in Kasinka Trading and Ann. v. Union of India Ors. (1995 (1) S.C.C.274) is being reconsidered by larger Bench is yet another affirmation of the need stressed by Lord Hailsham for enunciating a coherent body of doctrine by the Courts . An aspect needing a clear exposition - and which is of immediate relevance herein - is what is the precise meaning of the words the promisee.....alters his position , in the statement of the doctrine. The doctrine has been formulated in the following words in M/s. Motilal Padampat Sugar Mills Co. Ltd.: The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Govt. would be held bound by the promise and the promise would be enforceable against the Govt. at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Art.299 of the Constitution. What does altering the position mean? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lastic enough in the hands of the Court to do complete justice between the parties. Now, can the doctrine of promissory estoppel be put on a higher pedestal than the written contract between the parties? Take a case where there is a contract between the parties containing the very same terms as are found in the approval granted by IPARA (sub-committee) and then the government resiles from the contract and terminates the contract. The promisee will then have to file a suit for specific performance of the contract in which case the court will decide, having regard to the facts and circumstances of the case and the provisions of the Specific Relief Act, whether the plaintiff should be granted specific performance of the contract or only a decree for damages for breach of contract. It must be remembered that the doctrine of promissory estoppel was evolved to protect a promisee who acts on the faith of a promise/representation made by promissor and alters his position even though there is no consideration for the promise and even though the promise is not recorded in the form of a formal contract. Surely, a representation made or undertaking given in a formal contract is as good as, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the government. It is equally evident that while deciding where the interests of justice and equity lie, the Court will also take into account, and balance, public interest and the interest of the respondents aforesaid. The Court shall also take into consideration the estimate of raw material (khair trees) and its expected availability - at present and in the years to come - to be made by the Himachal Pradesh government pursuant to the directions contained herein with the aid of an expert committee. The High Court may give six months' time to the government to arrive at such an estimate and to place it before the Court. It may perhaps be appropriate to point out that what we have said above is consistent with the doctrine as stated in Motilal Padampat Sugar Mills and the subsequent decisions. In Motilal Padampat Sugar Mills, it has been held firstly that: But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined. Probably, the High Court was influenced by the opinion expressed by the IPARA (at the meeting held on August 28, 1993) referred to above. But it would be seen that it too is quite general and vague. Hence, the necessity for the remand to High Court. OBLIGATION OF THE STATE OF HIMACHAL PRADESH TO MAKE A PROPER ESTIMATE OF THE AVAILABILITY OF THE RAW- MATERIAL/KHAIR WOOD IN THE STATE: The facts stated above do establish the imperative necessity of a proper estimate of the availability of raw material, namely, khair wood in the State. We are told that any and every khair tree is not fit for cutting for obtaining katha. Only a tree with a particular girth (20 cm. at breast height) yields the optimum quantity of requisite material and is allowed to be cut. Trees with lesser girth are not allowed to be cut as per the Technical Order No.670 dated 13th August, 1993 issued under the Himachal Pradesh Land Preservation Act, 1978 and the Rules made thereunder. This Order, it may be noted, is applicable to private lands/forests. The State Government should obtain a proper estimate of the khair wood in the State and also to make an estimate of its availability in each of the coming y ..... 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