of Himachal Pradesh & Ors etc. Vs. Ganesh Wood Products & Ors etc
 INSC 482 (11
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Mukherjee M.K. (J) B.P. Jeevan Reddy. J.
1996 AIR 149 1995 SCC (6) 363 JT 1995 (6) 485 1995 SCALE (5)303
counsel for the parties.
appeals arise from a judgment of the Himachal Pradesh High Court disposing of
eight writ petitions together.
is a necessary ingredient in pan and pan masalas.
is derived from the khair tree. The central portion of the tree is used for
this purpose. These trees are found in considerable number in the State of Himachal Pradesh. They are also found in other
States but it appears that one after the other, various States have banned the
cutting of khair trees, with the result that those intending to manufacture katha
have been flocking to Himachal Pradesh over the last few years.
the year 1975, katha was being manufactured in the State of Himachal Pradesh only by 'bhattiwalas'. Since the
manufacture of katha requires extremely cold conditions, it is stated, the
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
Pradesh is an industrially backward State.
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
To act as the focal point for dissemination of information regarding programmes
of Government assistance and incentives to entrepreneurs.
To receive all application for setting up of factories in medium and large
To process the applications for establishment of new industries and select
projects for Government approval.
To arrange all necessary assistance required for the successful implementation
of approved projects from various Govt. Departments and to act as the channel
of correspondence and the coordinating agency between the entrepreneurs and various
concerned Govt. Departments.
review the progress of approved projects.
To recommend necessary changes in the Government policy regarding Industrial
Development in the light of experience gained.
Such other matters as the Government may refer of delegate to the Authority
from time to time." (Emphasis added) On November 29, 1990 IPARA was abolished by the Government. It appears to have
been revived later. By Notification dated September 3, 1993, the President of India (Himachal
Pradesh was then under the President's rule) reconstituted IPARA with a more
expansive membership. The terms of reference and the activities to be
undertaken by the IPARA, however, remained the same as were contained in the
Notification dated May
13, 1977. It is stated
that during the period IPARA was not in existence, the Director of Industries, Himachal
Pradesh was looking after that work.
received from entrepreneurs proposing establishment of industrial units in Himachal
Pradesh were being processed in the first instance by IPARA - and during the
period when IPARA was not in existence, by the Director of Industries.
units applied to IPARA/Director of Industries during the years 1992 and 1993
proposing to establish mechanised units for manufacturing katha. In all,
fifteen units applied but we are concerned only with eight such units in these
appeals. We shall, therefore, state the particulars with respect to these eight
indicated in the Table, the applications made by these units were considered by
the sub-committee of IPARA, which granted "approval" to all the
applicants. Since the said "approval" was supposed to be provisional
in nature, all the proposals were put up for fuller consideration before the
full committee of IPARA. The full committee met on August 28, 1993 and decided to recommend units at S1.Nos.1 to 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 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. He submitted that the raw material
available in the State (khair trees) for manufacturing katha is not sufficient
to sustain the proposed industries, as many as fifteen in number, and hence no
permission should be granted for new units. Soon afterwards, Shankar Trading
Company, the existing mechanised unit, filed Writ Petition No.1475 of 1973 for
an appropriate writ restraining the Government of Himachal Pradesh from
granting permission for establishment of any new unit on the ground that the
raw material available in the State is not adequate to sustain any new units.
According to this petitioner, the entire raw material available is hardly
sufficient to meet its own requirement and the requirement of bhattiwalas. It
relied upon an agreement entered into with the Government of Himachal Pradesh whereunder
fifty percent of the raw material extracted in a year has to be sold to it.
after the Governor's decision aforementioned was communicated to the concerned
parties, three writ petitions came to be filed by the units at S1.Nos.5 to 7 in
the aforementioned Table, viz., Writ Petition No.1576 of 1993 by Dev Bhoomi
Industries, Writ Petition No. 1590 of 1993 by Ganesh Wood Products and Writ
Petition No.145 of 1994 by Naman Wood Products. Two other Writ Petitions,
No.1479 of 1994 and 611 of 1994 were filed by Indian Wood Products and Chander Katha
Products. There was yet another writ petition (1489 of 1993) filed by one Ved Prakash
espousing the cause of Bhattiwalas.
hearing the parties and perusing the relevant records, the High Court dismissed
Writ Petition Nos.1455 of 1993 and 1475 of 1993 filed by Sri Yogendra Chandra
and Shankar Trading Company respectively. It allowed Writ Petition Nos.1576 of
1993, 1590 of 1993 and 145 of 1994 and quashed the orders of the Government
refusing permission to these three persons to establish their units. So far as
the writ petitions filed by Indian Wood Products and Chander Katha Industries
(Writ Petition Nos. 1479 of 1993 and 611 of 1994) are concerned, they were allowed
with a direction to the authorities of the State to reconsider their case in
the light of the observations made in the judgment. S.L.P.(C) Nos.12754-58 of
1995 are preferred by the State of Himachal Pradesh, S.L.P.(C) No.11082 of 1995
is preferred by Yogendra Chandra and S.L.P.(C) Nos.11086-11089 of 1995 by Shankar
Trading Company against the judgment of the High Court.
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 Solicitor General submitted that the High
Court exceeded the well recognised constraints of writ jurisdiction in taking
upon itself the determination of the availability of raw material and on that
basis quashing the orders of the government.
Madhava Reddy, learned counsel for Sri Yogendra Chandra submitted that the High
Court was not justified in holding that the appellant Yogendra Chandra cannot
be "accepted as a public spirited citizen approaching this Court to
protect the public interest", merely because he was not able to place
before the Court reliable data in support of his allegation of illicit felling
of trees in the past.
counsel contended that while rightly holding that there was no evidence of
collusion between Yogendra Chandra and Shankar Trading Company, the Court erred
in not entertaining his writ petition as a bonafide public interest litigation.
P.P. Rao, learned counsel appearing for Shankar Trading Company submitted that
the raw material available in the State is not sufficient to feed any new units
and that this fact has been repeatedly brought to the notice of the government
by the Chief Conservator of Forests, who must be deemed to be the person fully
aware of the true situation regarding the availability of raw material. Learned
counsel submitted that the permission granted to the respondent- units is in
violation of the provisions of several statutes, both Central and State.
Dave, learned counsel appearing for Ganesh Wood Products (one of the respondents
in these appeals) submitted that after the introduction of the New Industrial
Policy (Liberalisation Policy) and the notifications issued in that behalf by
the Government of India, a citizen of this country has an unquestioned and an
absolute right to establish a small-scale industry at any time, at any place
and of whatever capacity he may choose. He submitted that Katha industry is not
governed by Industries Development (Regulation) Act, 1951, (I.D.R.Act) hence no
licence or permission is necessary from the authorities under the said Act for
establishing a katha factory, more so in the small scale sector. The
government's duty is merely to register the units being set up. It is bound to
register any and every application for establishing a small-scale industry and
it has no power to cancel, revoke or disapprove such registration. Learned
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
submitted that in the interest of growers of khair trees and in the interest of
public and the State of Himachal
Pradesh, new units
must be allowed to come up.
Subramaniam, learned counsel for Dev Bhoomi (another respondent in these appeals)
urged four contentions:
that the order of the Governor made without notice to affected parties is in
violation of principles of natural justice since no notice was given to them
before refusing approval;.
that the High Court was justified in going into the merits of the case and
quashing the orders of the Governor on merits in the particular facts and
circumstances of the case;
that the State Government is not without power to regulate the supplies of raw
material in case it think it necessary or expedient. There are enough
enactments empowering it to do so;
recommendations of IPARA made in its meeting held on August 28, 1993 were considered decisions arrived
at after taking into consideration all aspects of the matter.
applied a legitimate criteria in diseinguishing Ganesh Wood Products, Naman
Wood Products and Dev Bhoomi Industries from others. IPARA was of the opinion
that no new units should be permitted but those units that have already acted
upon the approval granted by IPARA should be allowed to come up and function.
The Governor's action is devoid of any reasons. The alleged protests of Chief
Conservator of Forests contained in his letters are of no significance in view
of the fact that though he was a member of IPARA, he never recorded his protest
to any of the approvals granted to several units.
counsel further pointed out that khair trees were included in the Schedule to
the Himachal Pradesh Forest Produce (Regulation of Trade) Act, 1982 by
Notification dated April
30, 1991 but that the
same was deleted by another Notification issued on November 18, 1991. In this view of the matter, the learned counsel contended,
the Governor's action is unsustainable in law.
Swamy, learned counsel appearing for the Naman Wood Products (another
respondent) supported the contentions of Sri Dave and Sri Gopal Subramaniam.
Jaitley, learned counsel appearing for Indian Wood Products and the learned
counsel for Chandra Katha respectively (respondents) submitted that they too
had acted upon the approval granted by IPARA and have invested substantial
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.
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.
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"- subject,
of course, to the provisions of Entries 7 and 52 of List-I - is a matter within
the exclusive province of the States. In the absence of an enactment, the
executive power of the State extends to the said subject matter [Rai Sahib Ram Jawaya
Kapur And Ors. v. State of Punjab (1955
(2) S.C.R.225)]. The Himachal Pradesh Government has not only evolved a forest
policy but has also framed certain guidelines with a view to encourage the industrialisation
of the State. It has constituted IPARA, as far back as 1974, with the same
purpose. The functions of the said authority have been the same throughout,
viz., to act as the focal point for dissemination of information regarding programmes
of government assistance and incentives to entrepreneurs generally. In particular,
it is empowered "(ii) to receive all applications for setting up of
factories in medium and large scale sector and (iii) to process the
applications for establishment of new industries and select projects for
government approval". Indubitably, clause (iii) takes in industries in
small scale sector as well. The authority is further required "(iv) to
arrange all necessary assistance required for the successful implementation of
the approved projects from various government departments and to act as the
channel of correspondence and as the coordinating agency between the
entrepreneurs and various concerned government departments". In short,
this authority is to act as the nodal agency. It is also expected to review the
progress of approved projects and to recommend necessary changes in government
policy regarding industrial development in the light of experience gained.
reiterate that IPARA is not established under any statutory provision and its
acts and proceedings do not have any statutory sanction. The idea is to
encourage new industries and to provide necessary assistance to them. The more
relevant function of the authority from the point of view of the controversy
herein is the power, or function, as it may be called, "to process the applications
for establishment of new industries and select projects for government
approval". This clause makes it clear that the function of the authority
was not to grant approval for any new industry but only to process their
applications and to select projects for government's consideration; it was for
the government to approve them. It is 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.
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
successful establishment and running of the industry. Now, it cannot be denied
that the power to approve includes the power to decline approval and the power
to disapprove. And that is all that has happened now. The Government of Himachal
Pradesh has chosen to approve only three units, viz., Doon Katha, Sagar Katha
and Orient Herbs and it has refused to approve the rest including Ganesh Wood
Products, Naman Wood Products and Dev Bhoomi Industries (Hari Krishan). So far
as Indian Wood Products and Chander Katha Products are concerned, their cases
were not even put up to the government because their cases were rejected even
by the IPARA. When this is done, it is argued by learned counsel, Sri Dave,
appearing for Ganesh Wood Products that the government has no power to decline
the approval or to disapprove the provisional approval granted by IPARA.
Learned counsel contended that the government can only register an unit but it
cannot de- register it nor can it refuse to register it. We cannot agree. The
notifications constituting IPARA, whether of 1974 or of 1993, do not speak of
registering any unit. The argument of the learned counsel, therefore, means
that any and every application for establishment of new industry must
necessarily be approved by the government and that the government has no power
to refuse to approve nor can it disapprove any provisional approval granted
earlier. We are unable to understand or appreciate the logic behind this
argument, more particularly, in view of the further contention of the learned
counsel that since the I.D.R. Act does not govern the establishment of this
industry and also because of the liberalisation policy introduced by the
Central Government in 1991, no permission of any authority whatsoever is
required for establishing the katha industry in small scale sector. If the
contention of the learned counsel is that by virtue of the liberalisation
policy or by virtue of the position of law obtaining as on today - as
understood by him - a citizen of this country has an absolute and unbridled
freedom to establish any small scale industry anywhere in the country, he is
free to do so. The impugned order of the government does not say that he
cannot. It does not prohibit him from establishing the industry. All that the
government says, and means, is that if any one wants to come to it or to the
authority established by it, viz., IPARA, 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.
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.
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.
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 take the consequences, if any, of his action.
short, the position is this: the impugned order of the Government of Himachal
Pradesh (made by the Governor of Himachal Pradesh) on September 3, 1993 is not
traceable to any statutory provision or statutory power. It is made in exercise
of its executive power. While acting in its executive capacity, the government
is entitled to lay down policies and preferences in the interest of State, its
economy and keeping in view the National Forest Policy, Himachal Pradesh Forest
Policy and the Central and State enactments relevant in that behalf. The only
obligation of the State in such an event would be to extend a fair and
equitable treatment to all persons coming before it. Having approached the
IPARA and the government for approval, the respondents (persons intending to
set up katha units) cannot - when the approval is refused - turn round and say
that the government has no power to refuse approval. They cannot be heard to
say so. It is not as if - be it reiterated - the government has prohibited the
said respondents from establishing their factories in the State. The approval
and non-approval or disapproval, as it may be called, is administrative in
nature. If anyone wishes to seek approval from the government, he has to abide
by the government's policies and guidelines evolved or enunciated in that
our observations hereinabove may be misunderstood, we may mention a few of the
enactments - without trying to be exhaustive - governing the establishment of
forest-based industries, whether small scale, medium scale or large scale. They
Wildlife Protection Act, 1972.
Water (Prevention and Control of Pollution) Act, 1974 (amended in 1978 1988 and
Forest (Conservation) Act, 1980 (as amended in 1988).
Air (Prevention and Control of Pollution) Act, 1981 (as amended in 1988).
Environment (Protection) Act, 1986.
Industries Development and Regulation Act, 1951 (as amended from time to time)
- to the extent it is applicable.
H.P. Private Forests Act, 1954.
H.P. Land Preservation Act, 1978 and the Rules made thereunder.
Himachal Pradesh Forest Produce (Regulation of Trade) Act, 1982.
Various Municipal/Panchayat and Development Acts, wherever applicable."
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 there under and to refer briefly to the scheme of the Himachal
Pradesh enactments. The preamble to the Environment (Protection) Act reads:
Act to provide for the protection and improvement of environment and for
matters connacted therewith.
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;
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:
includes water, air and land and the inter-relationship which exists among and
between water, air and land, and human beings, other living creatures, plants,
micro-organism and property." Section 3 empowers the Central Government
"to take all such measures as it deems necessary or expedient for the
purpose of protecting and improving the quality of the environment and
preventing, controlling and abating environmental pollution". Sub-section
(2) of Section 3 elaborates the powers of the Central Government. It says:
In particular, and without prejudice to the generality of the provisions of sub-section
(1), such measures may include measures with respect to all or any of the
following matters, namely:-
Planning and execution of a nation- wide programme for the prevention, control
and abatement of environmental pollution;
down standards for the quality of environment in its various aspects;
restriction of areas in which any industries, operations or processes or class
of industries, operations or processes shall not be carried out or shall be
carried out subject to certain safeguards;....." Section 6 confers upon
the Central Government the power to make rules in respect of all or any of the
matters referred to in Section 3. Section 6(2) (e), in particular, empowers the
Central Government to make rules providing for "(e) the prohibition and
restrictions on the location of industries and the carrying on of processes and
operations in different areas".
have been framed under the Act. Rule 5 deals with "(P)rohibition and
restriction on the location of industries and the carrying on processes and
operations in different areas". Sub-rule (1) of Rule 5, insofar as it is
relevant, may be quoted:
The Central Government may take into consideration the following factors while
prohibiting or restricting the location of industries are carrying on of
processes and operations in different areas.......
The topographic and climatic features of an area.
The biological diversity of the area which, in the opinion of the Central
Government needs to be preserved.
Environmentally compatible land use.
Net adverse environmental impact likely to be caused by an industry, process or
operation proposed to be prohibited or restricted." These provisions
establish and emphasise the power of the Central Government to regulate 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
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.
Pradesh Land Preservation Act, 1978 confers extensive powers to regulate,
restrict, prohibit cutting of trees and their removal from notified areas. So
does the Himachal Pradesh Private Forests Act, 1955 contain elaborate
provisions empowering the State Government to prohibit the cutting and felling
the trees in the specified private forests. The provisions of these Acts have a
crucial bearing on the establishment and running of forest based industries.
SIGNIFICANCE OF FOREST WEALTH AND ITS IMPACT ON
ENVIRONMENT AND ECOLOGY:
well to remember that manufacture of katha requires cutting of khair trees.
Only the central portion of the trunk of the tree is used for the manufacture
of katha and the rest is of no use except perhaps as firewood. The more the
number of industries, the more pressure there will be for cutting these trees. Himachal
Pradesh is a hill State. The considerations of environment and ecology and
preservation of forest wealth are absolutely relevant considerations which the
government must keep in mind while devising its policies and programmes. A
brief examination of the importance and the fundamental significance of forests
in the matter of environment and ecology would be in order at this juncture.
report of the "World Commission on Environment and Development"
constituted by the United Nations and chaired by the then Prime Minister of
Norway, Gro Harlem Brundtland contains certain facts and warnings which are
relevant to the present context. We may refer to a few of them:
The excerpts are drawn from the book "Our Common Future:
Commission on Environment and Development" published by Oxford University
Press in 1987. India was represented on this Commission by its representative
Sri Nagendra Singh.
Report was sutmitted in the year, 1987.
has been a growing realisation in national governments and multilateral
institutions that it is impossible to separate economic development issues from
environment issues; many forms of development erode the environmental resources
upon which they must be based, and environmental degradation can undermine
economic development. Poverty is a major cause and effect of global
environmental problems. It is therefore futile to attempt to deal with
environmental problems without a broader perspective that encompasses the
factors underlying world poverty and international inequality..........
present development trends 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.....
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
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:
for Institutional and Legal Change", the Commission states, inter alia,
countries face the challenges of desertification, deforestation, and pollution,
and endure most of the poverty associated with environmental
degradation......The next few decades are crucial for the future of humanity.
Pressures on the planet are now unprecedented and are accelerating at rates and
scales new to human experience: a doubling of global population in a few
decades, with most of the growth in cities; a five to ten fold increase in
economic activity in less than half a century; and the resulting pressures for
growth and changes in agricultural, energy, and industrial systems.
for more sustainable forms of growth and development are also growing. New
technologies and potentially unlimited access to information offer great
promise.......Environmental protection and sustainable development must be an
integral part of the mandates of all agencies of governments, of international
organizations, and of major private-sector institutions. These must be made
responsible and accountable for ensuring that their policies, programmes, and
budgets encourage and support activities that are economically and ecologically
sustainable both in the short and longer terms." Similar views were
expressed at the United Nations Conference on the Human Environment held at
Stockholm from June 5th to 16th, 1972. We do not, however, wish to burden this
judgment with them. Suffice to refer to Article 51-A of our Constitution which
makes it a duty of every citizen to protect and improve the natural environment
including forests, lakes, rivers and wildlife and to have compassion for living
the effects of unthinking and indiscriminate felling of forests needs no
emphasis at the present juncture, we cannot but quote the following passages
from the book "Topsoil and Civilization" by Tom Dale and Vernon Gill
Carter, both highly experienced ecologists:* "Man, whether civilised or
savage, is a child of nature - he is not the master of nature. He must conform
his actions to certain natural laws if he is to maintain his dominance over his
environment. When he tries to circumvent the laws of nature, he usually
destroys the natural environment that sustains him. And when his environment
deteriorates rapidly, his civilisation declines.......
writers of history have seldom noted the importance of land use. They seem not
to have recognised that the destinies of most of man's empires and civilisations
were determined largely by the way the land was used.
the influence of environment on history, they fail to note that man usually
changed or despoiled his environment.
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.
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.
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.
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 world, there is hardly any space left for
anyone to move from his place to another.
digression was necessary to put in proper perspective the ooligation of the
State and the significance of the concept of "sustainable development"
and "inter- generational equity"* vis-a-vis the legal submissions
made on the basis of principles of natural justice, estoppel and so on.
FEW MORE RELEVANT FACTS:
person applied for approving his project for ------------------------------------------------------------
* Inter-generational equity means the concern for the generations to come. The
present generation has no right to imperil the safety and well-being of the
next generation or the generations to come thereafter.
of a katha industry, the sub-committee of IPARA communicated its approval
clearly envisaging that soon after receiving the said approval, the person
concerned should take immediate and effective steps for setting up the
industry. We are told that all these approvals were accorded in a prescribed proforma,
one of which (addressed to Ganesh Wood Products) may be set out hereinbelow:
DEV.F.(34) IPARA-463/93 GOVERNMENT OF HIMACHAL PRADESH 'DIRECTORATE OF
INDUSTRIES' Dated: Shimla - 171002 The 21.6.1993 To M/s Ganesh Wood Products,
108-109/215, Katha Paren, Tilak Bazar, Delhi - 110006.
APPROVAL OF PROJECT BY IPARA.
Sir, We have the pleasure to inform you that your application dated 11/6/93 for
the approval of your project has been cleared by IPARA Sub-Committee meeting
held on 16/6/1993 for the setting up of new Industrial Undertaking at Sansarpur
Terrace District Kangra in the State of Himachal Pradesh for the manufacture of
following items:- ----------------------------------------
ITEM OF MANUFACTURE PROPOSED
CAPACITY ---------------------------------------- Acacia Catechu Extract 240
Products (Cutch) 240 MT.
This approval is subject to the following conditions:-
letter of approval is valid for a period of 12 months from the date of issue.
You shall take effective steps within this validity period for the
implementation of the project, if an extension to the period of validity is
found necessary you should apply preferably 3 months in advance with full
justification for any extension of time sought alongwith a detailed statements
of the steps taken for the implementation of the project.
Adequate steps shall be taken to the satisfaction of the Govt. to Prevent Air,
Water and Soil Pollution. Such 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.
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
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.
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, advised to initiate the steps, for procurement
of land, finance and other assistance as required for the project at your own.
will have to make own arrangement for the procurement of water from the source
to the factory site at your own cost. In case you sink a tube well for your
unit, you will ensure that it does not upset the water table in that area
are required to furnish quarterly progress report untill the commencement of
production. This report will have to be furnished every quarter ending 31st
March, 30th June, 30th Sept.
will inform this office about the commencement of production.
will notify the vacancies to all the employment exchanges in Himachal Pradesh.
These vacancies shall be filled in as per notifications issued by the
Department from time to time. You shall have to employ only bonafide residents
of H.P. and also trained and technical persons from ITI's, RITI's, polytechnics
and Engineering Colleges in the State in your industrial unit. You are further
required to give quarterly return regarding employment of Himachal and non-Himachali
to the General Manager, Distt. Industries Centre, of your district.
will have to make inbuilt parking facilities within factory area or separately
for parking of trucks and other vehicles and these will not be allowed to be
parked on National
public utility read.
This proposal has been approved without any commitment of availability of Khair
Wood by the State Government.
You will have to raise green belt around the factory premises.
hopeful that you will now immediately initiate effective steps to implement
this project. In case of any difficulty/assistance required, kindly fee free to
get in touch with us. We assure you of our full co-operation.
added) Wishing you and your enterprise a success.
faithfully, sd/- ( S.C. Negi ) Member Secretary ______ _________ IPARA"
(Let it be noted that this letter is not from the Government of Himachal
Pradesh but only from IPARA.) The terms of approval are clear enough and we do
not think it necessary to set out their substance in our own words.
appears that when IPARA approved as many as fifteen proposals for establishing katha
factories in the State, the Forest Department of the State and the Ministry of
Environment and 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:
OF INDIA MINISTRY OF ENVIRONMENT AND FORESTS Paryavaran Bhawan, C.G.O. Complex,
Lodi Road, New Delhi Pin 110 003.
Dated: 6th October,
1993 To The Forest Secretary, Government of Himachal
Registration of New Katha units - availability of khair wood.
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 yet been received by this Ministry.
However, it has come to the notice of this Ministry that the State Govt. have
issued orders for registration of 15 new katha units for manufacturing of Katha
from Khair Wood and is also contemplating to issue more licences for setting up
of new units.
is being done without due consideration to the principle of sustainable
management of the forest and is not commensurate to the annual yield for Govt.
and private forests. This is against our National Forest Policy of 1988, which
clearly says that no forest based enterprise, except that at the village or
cottage level be permitted in future unless it has been first cleared after a
careful scrutiny with regard to assured availability of raw material.
is, therefore, requested that review of the earlier decision taken by the State
Govt. in regard to the registration of 15 new units of Katha may be taken
keeping in view the availability of Khair Wood in the State as per sustainable
annual yield available from Government and private forest area. Action taken in
this regard may kindly be sent immediately.
faithfully sd/- ( Anoop Badhwa ) Asstt. Inspector General of Forests."
Evidently, this letter was written by Government of India before it was apprised
of the action taken by the Government of Himachal Pradesh impugned herein. It
is legitimate to presume that similar views must also have been expressed
from the concern expressed by the Government of India, Ministry of Environment
and Forest, there was a spate of criticism in the media and other public fora
(including protest by Chairman of four block samities) with respect to grant of
approval to establish as many as fifteen mechanised units for manufacture of katha
in Himachal Pradesh. All this made the Government of Himachal Pradesh and IPARA
to sit up and take notice of the consequences of the action of the
sub-committee of IPARA in approving fifteen units. A full meeting of IPARA was
convened for August 28, 1993.
the capacity of each of these units was restricted to 3600 metric tonnes or
2400 cubic metres per annum and the "approvals" granted to some other
units, who had not taken any steps pursuant to sub-committee's
"approval" were cancelled. The full committee meeting of the IPARA
held on August 28, 1993 took note of the concern expressed in 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 Trading Company) and the aforesaid six new units with their
restricted capacity. It decided that the approvals of the other units should be
cancelled because they had not taken any concrete steps to implement the
projects approved. The IPARA also took note of the requirement of Shankar
Trading Company (Mahesh Udyog) and the agreement it had with the Government of Himachal
Pradesh and felt that its capacity and its requirement of raw material should
be assessed and verified in a proper manner. The proposals and recommendations
of the IPARA aforesaid were placed before H.E. the Governor for approval. On September 15, 1993, H.E. the Governor made the
my opinion, the proposal at Para 5 and its
sub para 1 on page 3 of the note descorve to be modified as under:- Para 5 - sub para 2
Hari Krishan Bajaj, Prop. M/s. Dev Bhumi Industries, Baddi District, Solan,
M/s. Naman Wood Products, Tahliwala, District Una and
M/s. Ganesh Wood Products, Sansarpur Terrace, Distt. Kangra, H.P., as approved
by IPARA Sub- Committee should not be implemented.
units at para 5 sub-para 2(1) Shri Anil Kumar Arya, Prop., M/s. Orient Herbs, Baddi,
Distt. Solan (2) M/s. Sagar Katha Factory, Kala Amb, distt. Sirmour and one
small proposal of Bhatti type being set up by Mrs. Sushma Chauhan, a woman entrepeneur
at Paonta Sahib (para 5 sub para 1) are approved and be implemented.
Governor 15.9.93" The decision was communicated to the concerned persons -
leading to the filing of several writ petitions in the High Court.
OF KATHA IN THE STATE OF HIMACHAL PRADESH:
to the directions of the High Court on the question of availability of raw
material for manufacturing katha, Sri R.K.Anand, Secretary (Forests) to the
Government of Himachal Pradesh, filed, what he designated as "short
affidavit in compliance to the order dated 31.12.1993 passed by the Hon'ble
Court". It is instructive to extract certain portions of this affidavit in
view of their crucial relevance:
It is submitted that policy in regard to cutting of Khair trees is to obtain
yield on sustained basis.** The National and State policies in regard to
establishment of industries is as under:
National Forest Policy: Para 4.9 of the National Forest Policy states that `as
far as possible', a forest based industry should raise the raw material 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."
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".
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 allotted 50% of the total khairwood available annually from Government
forests and all the Bhatti units get 12 1/2%. Though the installed capacity of
the said mechanized unit is 5000 M3 per year as assessed by the representatives
of the Forest, Industry Deptts and Small Industries Service Institution - an organisation
of Govt. of India situated at Solan, as per the suggestion of IPARA - yet the
management of the said mechanized unit i.e. Mahesh Udyog has represented to the
Government that the installed capacity of the unit has not been properly
assessed. Accordingly, their representation is being examined.......
Working Plan of Khair trees: Khair trees are not found all over the State.
are confined to the lower belt of H.P. from Sirmaur district in the East to Chamba
in the West. All the khair trees in Government Forests have not been
enumerated. However, Working Plans have been prepared in respect of Forest
Divisions which prescribe certain annual yield in terms of numbers of trees and
volume and area. The yield is exactly known after carrying out markings and fellings.
However, the average annual yield is 2838 cubic metres. It is average of
1990-91 to 1992-93.
of Working Plans is 15 years. It is not, therefore, possible to furnish
information for 30 years.
is no working plan or enumeration of khair trees growing on private land.
However, the annual yield of 21034 cubic metres of khair wood from private
ownership is based on extraction of khair wood during the year 1990-91 and
1991-92. This makes a total annual availability of 23872 cubic metres
(2838+21034) of khair wood both from Government and private ownership........
Approval of the State Government:
had initially cleared 14 projects and conveyed the clearance to the respective
parties in anticipation of the Government approval. However, Government
reviewed the decision of IPARA taken in its meeting held on 28-8- 1993 and
decided that 6 units out of 14 which were recommended by IPARA, only 3 units in
order of precedence or receipt of applications be allowed to continue.
IPARA withdrew the approval of all units except 3 as allowed by Government.
Policy regarding import/export of khair wood from outside the State of Himachal Pradesh: There is no ban on export of khair
wood from the State in respect of khair wood obtained 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.
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.
MYOPIC APPROACH OF THE SUB-COMMITTEE OF THE IPARA IN APPROVING THE PROPOSALS
FOR KATHA FACTORIES:
the years 1992 and 1993, the sub-committee of IPARA seems to have been
proceeding on the assumption that so long as there is no commitment on the part
of the Government to supply khair wood to the proposed factories, there is no
harm in approving any and every proposal that comes before it. This cannot but
be termed as a totally faulty and a myopic approach. It is also violative of
the National Forest Policy and the State Forest Policy evolved by the
Government of India and the Himachal Pradesh Government respectively - besides
the fact that it is contrary to public interest involved in preserving forest
wealth, maintenance of environment and ecology and considerations of
sustainable growth and inter-generational equity. Afterall, the present
generation has no right to deplete all the existing forests and leave nothing
for the next and future generations. Not keeping the above considerations in
mind, it is obvious, has vitiated the approvals granted by the sub-committee of
IPARA - apart from the fact that it was not empowered to grant any such
approval. The obligation of sustainable development requires that a proper
assessment should be made of the forest wealth and the establishment of
industries based on forest produce should not only be restricted accordingly
but their working should also be monitored closely to ensure that the required
balance is not disturbed. In this view of the matter, we must say that insofar
as forest-based industries are concerned, there is no absolute or unrestricted
right to establish industries notwithstanding the policy of liberalisation
announced by the Government of India. The policy of liberalisation has to be
understood in the light of the National Forest Policy devised by the Government
of India itself and in the light of the several enactments applicable in that
behalf, some of which have been referred to hereinbefore. It is meaningless to
prescribe merely that the government need not supply the raw material and that
the units will have to get their khair trees/raw material from private
lands/forests. No distinction can be made between government forests and
private forests in the matter of forest wealth of the nation and in the matter
of environment and ecology. It is just not possible or permissible. The National
Forest Policy and the Himachal Pradesh Forest Policy do not make any such
distinction. The perils of ignoring the above policies and considerations
cannot be over-emphasised.
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.
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
interest of environment and ecology. His inability to produce material in
support of his allegation of illicit felling in the State does not tell upon
also mention, even at this stage, that so far as Shankar Trading Company is
concerned, there is absolutely no doubt in our mind that it is not entitled to
question the approvals granted to new units since there was no indication at
any stage that the supplies which it was receiving in the previous years
pursuant to the agreement with the government were going to be affected. Its
attempt to stop the new industries from coming up in the State, while enjoying
an almost monopoly status in the matter of khair wood supplies, is certainly a
strong factor militating against its bonafides in approaching the court.
DOCTRINE OF PROMISSORY ESTOPPEL AND THE PUBLIC INTEREST:
doctrine of promissory estoppel is by now well recognised in this country. Even
so it should be noticed that it is an evolving doctrine, the contours of which
are not yet fully and finally demarcated. It would be instructive to bear in
mind what Viscount Hailsham said in Woodhouse Ltd. v. Nigerian Produce Ltd.
(1972 A.C. 741):
desire to add that the time may soon come when the whole sequence of cases
based upon promissory estoppel since the war, beginning with Central London
Property Trust Ltd. v. High Trees House Ltd. (1947 (1) K.B. 130) may need to be
reviewed and reduced to a coherent body of doctrine by the courts. I do not
mean to say that they are to be regarded with suspicion. But as is common with
an expanding doctrine, they do raise problems of coherent exposition which have
never been systematically explored." Though the above view was expressed
as far back as 1972, it is no less valid tody. The dissonance in the views
expressed by this Court in some of its decisions on the subject emphasises such
a need. The views expounded in M/s. Motilal Padampat Sugar Mills Company
Limited v. State of Uttar
Pradesh (1979 (2)
S.C.C.409) was departed from in certain respects in Jit Ram Shiv Kumar v. State
of Haryana (1981 (1) S.C.C.11), which was in
turn criticised in Union of India v. Godfrey Philips India Limited (1985 (4)
S.C.C.369). The divergence in approach adopted in Sri Bakul Oil Industries v.
State of Gujarat (1981 (1) S.C.C.31) and Pournami
Oil Mills v. State of Kerala (1986 Suppl.S.C.C.728) is another
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".
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.
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? Does it mean such a
change in the position of the promisee (as a result of acting on the faith of
representation of the promissor) that compensating him in money would not be
just and equitable to him, i.e., a situation where the ends of justice and
requirements of equity demand that the promissor should not be allowed to go
back on his representation and must be held to it or does altering his position
mean doing of some act, big or small, which the promisee does acting on the
faith of the representation which he would not have done but for the
representation? In other words, is it enough that the promisee has spent some
money or has taken some step acting on the basis of representation, which can
be recompensed in money or otherwise? Is it not ultimately a matter of doing equity
and justice between the parties - a case of holding the scales even between the
parties and deciding whether in the interests of justice and equity the promissor
can be allowed to resile from his promise and compensate the promisee
appropriately or the promissor ought to be held to his promise and not allowed
to go back since such a course is necessary in view of the change in position
of promisee? Our view of the matter is probably evident from the way we have
posed the above questions. To wit, the rule of promissory estoppel being an
equitable doctrine, has to be moulded to suit the particular situation. It is
not a hard and fast rule but an elastic one, the objective of which is to do
justice between the parties and to extend an equitable treatment to them. If it
is more just from the point of view of both promissor and promisee that the
latter is compensated appropriately and allow the promissor to go back on his
promise, that should be done; but if the Court is of the opinion that the
interests of justice and equity demand that the promissor should not be allowed
to resile from his representation in the facts and circumstances of that case,
it will do so. This, in our respectful opinion, is the proper way of
understanding the words "promisee altering his position". Altering
his position should mean such alteration in the position of the promisee as it
makes it appear to the Court that holding the promissor to his representation
is necessary to do justice between the parties. The doctrine should not be
reduced to a rule of thumb. Being an equitable doctrine it should be kept
elastic 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, if not better than, a
mere representation. All that we wish to emphasise is that anything and
everything done by the promisee on the faith of the representation does not
necessarily amount to altering his position so as to preclude the promissor
from resiling from his representation. If the equity demands that the promissor
is allowed to resile and the promisee is compensated appropriately, that ought
to be done. If, however, equity demands, in the light of the things done by the
promisee on the faith of the representation, that the promissor should be
precluded from resiling and that he should be held fast to his representation,
that should be done. To repeat, it is a matter of holding the scales even
between the parties - to do justice between them. This is the equity implicit
in the doctrine.
matters before us have to be approached and decided keeping the above
principles in mind. The Court should first ascertain what precisely has each
the said five respondents (Ganesh Wood Products, Naman Wood Products, Dev Bhoomi
Industries, Indian Wood Products and Chander Katha Industries) have done on the
basis of and on the faith of the "approval" granted by the IPARA
(sub-committee of IPARA) by the date of the communication of the decision of
the government - and IPARA in the case of two last mentioned units. [The
expression "communication" in this behalf should be understood as
explained in State of Punjab v. Khemi Ram (A.I.R. 1970 S.C.214).
After ascertaining the same, the Court shall have to decide whether it is a
case - separately in case of each of the said respondents - where the
government should or should not be allowed to go back on the said
"approval" granted by the IPARA (sub-committee). It is obvious that
this decision has to be taken after giving an opportunity to both the parties
to adduce material in support of their respective stands. Inasmuch as the High
Court has not approached and examined the case from the above standpoint, the
matter has to go back. While deciding the appropriate course, it is evident
that the Court shall also have to keep in mind the plea of government that
IPARA or its sub-committee was not competent to accord approval and that the
power lay only with the government, as also the plea of the respondents that in
the circumstances they believed and acted in good faith that IPARA is but
another name for, or a mouthpiece of, 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.
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
Padampat Sugar Mills, it has been held firstly that:
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.
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 made by it, the Court would not raise an equity in favour of the promisee
and enforce the promise against the Government. The doctrine of promissory estoppel
would be displaced in such a case because, on the facts, equity would not
require that the Government should be held bound by the promise made by it.
When the Government is able to show that in view of the facts which have
transpired since the making of the promise, public interest would be prejudiced
if the government were required to carry out the promise, the Court would have
to balance the public interest in the Government carrying out a promise made to
a citizen which has induced the citizen to act upon it and alter his position
and the public interest likely to suffer it the promise were required to be
carried out by the Government and determine which way the equity lies."
and then it is observed:
even where ther is no such overriding public interest, it may still be
competent to the Government to resile from the promise 'on giving reasonable
notice, which need not be a formal notice, giving the promises a reasonable
opportunity of resuming his position' provided of course it is possible for the
promisee to restore the statuts quo ante. If, however, the promises could
become final and irrevocable. Vide Ajayi v. Briscoe (1964) 3 All ER 556."
It is this aspect which has been elaborated by us keeping in mind the facts and
circumstances of this case.
true that in case of the three units (Ganesh Wood Products, Naman Wood Products
and Dev Bhoomi Industries), the full meeting of IPARA (held on August 28, 1993)
opined that "it would not be appropriate to rescind the approval keeping
in view the progress made in implementation of their projects.....", yet
it is not clear what exactly had they done by the date of rejection of their
proposal by the Government (23rd September, 1993). Even the High Court has not
recorded any clear finding on this aspect. All that it said is : "It is
apparent that the Units recommended by IPARA were earlier registered with the
industries Department and have thereafter purchased lands, constructed factory
buildings, and/either purchased or placed orders for machinery. In some cases
even the raw-material has been purchased." There is no reference to any
material in support of the said opinion nor is the case of each of the
petitioners separately examined. 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.
OF THE STATE OF HIMACHAL
MAKE A PROPER ESTIMATE OF THE AVAILABILITY OF THE RAW- MATERIAL/KHAIR WOOD IN
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 there under.
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 years with
the assistance of an expert body to be appointed in consultation with the
Ministry of Environment, Government of India. Such an estimate should cover
both the Government and private lands/forests and must be arrived at keeping in
view the National and State forest policies and the relevant statutory
provisions. It is only then one can say, what is the quantity of khair wood
available and how many industries it can feed - and upto what capacity.
Further, it is on the basis of such estimate that the capacity of the katha
factories, at any given point of time, may have to be restricted, if need be.
Some of them may even have to be closed if warranted by public interest.
must say that the estimate of availability of raw material arrived at by the High
Court is based upon the quantity extracted over a period of two or three years.
As pointed out hereinabove, the quantity extracted in a given year or given
years can never be treated as a proper estimate of the availability of the raw
material. Hence, the need for a proper and credible survey by an expert body.
In this view of the matter, it is not necessary to deal with the criticism
mounted by the learned counsel for respondents to the varying estimates of raw
material put forward by the government at various stages of this litigation and
to other alleged contradictions in its case from stage to stage.
The appeals are accordingly allowed, the judgment of the High Court is set
aside and the matters remitted to High Court for a fresh disposal of the writ
petitions in accordance with law and in the light of this judgment.
the passing of final orders by High Court pursuant to these directions, none of
the said five units - Ganesh Wood Products, Naman Wood Products, Dev Bhoomi
Industries, Indian Wood Products and Chander Katha - shall take any further
steps towards setting up the factory. The status quo as on today shall
continue. The government and all concerned shall take steps to ensure
observance of this direction.
Government of Himachal Pradesh shall make a survey and assess the approximate
availability of khair wood in the year 1996 and the ensuing years. This shall
be done through an expert body to be appointed by the government. The
government shall be entitled to rely upon the expert committee's report and its
own assessment arrived on the basis of such report before the High Court for
its consideration as provided in this judgment.
industry/unit for manufacture of katha shall be approved by the government
pending a final decision by the government on the question of availability of
raw material in the years to come.
order as to costs in these appeals.