Tata Engineering and Locomotive Co.
Ltd. Vs. The State of Bihar & ANR [2000] INSC 243 (24 April 2000)
Doraiswami raju, V.N.Khare
Raju, J.
The above appeal is against the judgment of a
Division Bench of the Patna High Court whereunder the claim of the appellant to
quash the notice dated 16.11.95 asking the Vice President of the
appellant-company to take licence under the Bihar Saw Mills (Regulation) Act,
1990 (hereinafter referred to as `the Act) came to be rejected and the Court
also declined to grant a declaration sought for that the provisions of the Act
and the Rules framed thereunder, namely, the Bihar Saw Mills (Regulation)
Rules, 1993 (hereinafter referred to as `the Rules) are not applicable to them.
The appellant-company is engaged in
manufacturing and assembling of vehicles of various descriptions including
trucks and light motor vehicles, such as Car, Jeep, etc. at its various
factories situate in different parts of the country including the State of
Bihar. The activities of the company consist of manufacturing of trucks of
various descriptions and size, as also their components. The company, in the
course of its manufacturing activities, requires articles and components made
of wood for being used as battery base for chassis, gaggers for production of
tool box, pallet platform, staging platform staging for C.E.D./M.C. wheel
carrier, etc. To meet such requirements, the company claims to purchase
substantial and huge quantity of wood/ timber from registered dealers having
valid licences and the same is used in their own saw mills located inside their
factory premises for manufacturing the various wooden components required for
their main business. On an inspection made, the company was found to have been
running about 5 to 8 saw mills inside their premises and indisputably they have
not obtained any licence either under the Act in question or the Forest Act for
transport of timber purchased by them, their claim throughout being that they
are not carrying on any trade in timber as such, by selling wood to any
outsider nor are they engaged in the activities of saw trading as such and that
they are not covered under the Act with any liability to take out any licence
or pay any licence fee therefor.
The Division Bench of the High Court repelled
the contentions of the company and held that the admitted nature of activities
of the company are sufficient to attract the provisions of the Act and the
theory of end product use or that they are only incidental to the main business
activity of manufacturing automobile vehicles, have no relevance in adjudging
their liabilities under the Act and the Rules made thereunder. The definitions
contained in the Act of saw mill, saw pit and sawing were held to be of
sufficient amplitude to cover the activities of the company. Hence, this
appeal.
Shri R.F. Nariman, learned senior counsel,
while ably presenting the case of the appellants reiterated the stand taken
before the High Court and vehemently contended that the existence of `saw mills
or `saw pits or the mere activity of `sawing by themselves are not sufficient
to attract the provisions of the Act and the Rules made thereunder - those
activities of the company being carried not by way of trade in timber but only
as ancillary and incidental to their main business of manufacturing and selling
automobiles of various kinds and varieties. The further submission on behalf of
the appellant is that it is always necessary to find out the object and reason
as well as the reach of the statutory provisions and the general words in the statute/rules
would take colour only from the reason for it. Argued the learned counsel
further that as long as the activities of the company are not in the course of
any trade as such in timber and the machineries installed in the factory
premises are for cutting the timber purchased by them lawfully from registered
and licensed dealers for manufacturing the various components of the
automobiles only the provisions of the Act and the Rules made thereunder had no
application to the appellants and consequently, they are neither obliged to
take any licence or pay any licence fee nor could they be penalised for not
complying with the provisions of the Act. The learned counsel placed strong
reliance upon the decision reported in Utkal Contractors & Joinery Private
Ltd. vs State of Orisssa [1987 (3) SCR 317], besides inviting our attention at
great length to the various provisions of the Act and Rules to demonstrate as
to how, in his view, the provisions are inappropriate and inapplicable to the
case of the appellants.
Per contra, Shri Rakesh Dwivedi, learned
senior counsel appearing for the respondent-State, with equal force and
vehemence contended that, a careful analysis and consideration of the
provisions of the Act, even in the light of the principles of construction
suggested for the appellants would make them applicable to the case of the
appellants - the object and reason as well as the reach of the provisions being
not only to regulate `The Trade of Sawing but also the establishment and
operation of saw mills and saw pits as defined in the Act and further for the
protection and conservation of forests and environment in the State, in public
interest. The fact that one or the other of the Rules or Forms prescribed and
some or the other particulars specified therein may not apply to the appellants
is no test, according to the respondents, to exclude its application to the
appellants. While inviting our attention extensively to the provisions in the
Act and the Rules, it was contended that the provisions of the Act were
deliberately couched in the widest possible language to regulate and control,
for the protection and conservation of forests and environment, and viewed in
the context of the mischief sought to be prevented, the provisions have to be
liberally construed in furtherance of the laudable object of the legislation,
keeping in view the factual position that those industries which are located in
and around Jamshedpur consume huge volume of wood for commercial and industrial
purposes and those areas are surrounded by forests in the State of Bihar and
bordering States of Orissa and West Bengal. For the respondents, it has also
been pointed out that other industries located in the Jamshedpur, i.e., Tata
Iron and Steel Company Ltd, Indian Tubes Company, Tin Plate Company, etc.,
operating saw mills similarly within their factory premises have taken licences
under Section 5 of the Act.
`Saw mill is defined in Section 2 (g) of the
Act as follows: 2 (g). Saw mill means the plant and machinery with which and
the premises including the precincts thereof in which or in any part of which
sawing is carried on with the aid of electrical or mechanical power.
`Saw pit is also defined in Section 2 (h) in
the following terms: 2 (h). Saw pit means a place where wood is sawn by manually-operated
saws.
Similarly Section 2 (i) defines `Sawing to
mean as hereunder:
2 (i). Sawing with its grammatical variations
and cognate expressions means operation of sawing, cutting, converting,
fashioning or seasoning wood and includes preservation and treatment thereof
either by mechanical process with the aid of electrical or mechanical power or
manually-operated saws.
`Wood has also been defined in Section 2 (k)
to mean and include trees when they have fallen or have been felled, and all
wood of any species whether cut, converted, fashioned, sawn or hallowed out for
any purpose or not.
The other relevant provisions to appreciate
the submissions of the learned counsel on either side, to which detailed
reference had also been made by them, are Sections 5, 9, 10 and 25 as well as
Rules No.7 and Form No.D. Section 5 of the Act, which mandates the taking of a
licence, reads as follows:
5. Application for licence.- On and from the
appointed day- (a) no person shall establish a saw mill or a saw pit except
under the authority and subject to the conditions of a licence granted in that
behalf under this Act;
(b) no person shall operate a saw mill or a
saw pit in existence on the said date, unless he is granted a licence in that
behalf under this Act on an application made by such person within a period of
thirty days from such date:
Provided that for the period of thirty days
and thereafter the period during which the application is pending for
consideration, it shall be deemed as if such person was granted a licence under
this Act and he was operating the saw mill or saw pit accordingly.
Section 9, which provides for submission of
returns by a licenee, and Section 10, which obligates the keeping of account of
stock of wood in saw mill and saw pit, read as follows:
9. Submission of returns - Every licensee
shall submit such returns relating to the business of the saw mill or saw pit,
as the case may be, and in such forms and to such officers and on such dates as
may be prescribed.
10. Keeping of account of stock of wood in
saw mill and saw pit - All wood whether sawn or not, found in or brought to the
saw mill or saw pit or at the site of sawing at any time or during any period
by any person in any manner or by any means for purpose of sawing or for any
other purpose shall always be properly accounted for and all relevant evidence,
documents, receipts, order and certificate as are necessary to show that the
wood is legally obtained, shall be maintained and made available at the time of
inspection. It shall be presumed in respect of the stock of wood which is not
accounted for satisfactorily that the same has been obtained unlawfully and the
stock of wood shall be liable for confiscation.
Section 25 contains the saving clause by
virtue of which certain class and category of activities and State Government
are exempt from the application of the Act and it reads as follows:
25. Saving - The provisions of this Act or
the Rule made thereunder shall not apply to - (a) the ordinary operations of
carpentry not involving saw mill or saw pit operations;
(b) any saw mill or saw pit owned by the
State Government.
The conditions of licence which caste certain
obligations on the licensee and which are set out in Rule 4, read as follows:
4. Grant of licence - (1) The licensing officer
shall grant the licence in Form C.
(2) The licence shall be subject to the
following conditions:- (a) The sawing operations in the saw mill and saw pit
shall not be carried out after sunset and before sunrise.
(b) The certified copies of the licence
granted under sub-rule (1) shall be displayed at conspicuous place in the saw
mill or saw pit.
(c) The licence shall maintain daily account
of receipt of wood purchased, sawing and disposal in Form `D.
(d) The monthly account of wood received for
sawing only shall be maintained in Form `E.
(e) The registers of accounts shall, if so
required, be produced before the licensing officer or any other officer
authorised by him for inspection.
(f) If the licensee or the person incharge of
the operation of saw mill or saw pit has reason to believe that the wood
brought to the saw mill or the saw pit is illicit, he shall inform the nearest
Range Officer of Forests as early as possible, about the arrival of illicit
wood. In no case, the illicit wood shall be sawn.
(g) The expansion of the saw mill or saw pit,
or change in its location shall not be carried out without the written
permission of the licensing officer.
(3) The licence shall be valid for a calendar
year for which it was issued.
(4) The copies of conditions (under whom the
licence is being granted) and the copies of forms of accounts (in which receipt
of wood, sawing and disposal) shall be showing to the applicant by the
licensing officer before grant of the licence. The licensing officer shall
explain the conditions and the subject matter of draft to the applicant, if he
is unable to read. The licensing officers shall obtain the signature or thumb
impression of the applicant, as the case may be, on the application in token of
the acceptance of the conditions. The applicant shall be applied with one copy
each of conditions and terms, in which account shall be maintained.
(5) In case the licence is lost and smuttered
the licensee may obtain a certified copy of the licence on payment of rupees
one hundred for each saw mill and rupees ten for each saw pit, from the
licensing officer.
Rule 7 of the Rules mandates the maintenance
of a register in Form No.D and monthly account in Form-E and enjoins upon a
licensee to submit a return of those accounts to the concerned Divisional
Forest Officer by a date not later than 10th of every month. Form-D pertains to
details of purchase of wood for sawing and disposal and Form-E relates to the
monthly account of arrival, sawing and disposal of wood received for sawing.
All these are designed to assist the Licensing Officer and/or any authorised
person, to effectively discharge their duties under Section 8 of the Act and
thereby ensure proper compliance with the provisions of the Act, by everyone
concerned.
Statutes, it is often said, should be
construed not as theorems of Euclid but with some imagination of the purposes
which lie behind them and to be too literal in meaning of words is to see the
skin and miss the soul. The method suggested for adoption, in cases of doubt as
to the meaning of the words used is to explore the intention of the legislature
through the words, the context which gives the colour, the context, the subject
matter, the effects and consequences or the spirit and reason of the law. The
general words and collocation or phrases, howsoever wide or comprehensive in
their literal sense is interpreted from the context and scheme underlying in
the text of the Act. The decision in Utkal Contractors & Joinery Pvt. Ltd.
case (supra) also emphasis the need to construe the words in a provision in the
context of the scheme underlying the other provisions of the Act as well, which
ultimately was considered to be in tune with the object set out in the
statement of objects and reasons and in the Preamble. Apart from the fact that
the observations contained in the decision have to be understood in the light
of the issue raised and exercise undertaken by the Court therein, the fallacy
in the submission on behalf of the appellant lies though not in the principles
of construction to be adopted but in the assumption of the counsel to confine
or restrict and construe the law in question to be one made to regulate the
trade of sawing, contrary to the very Preamble which reads, To make provisions
for regulating in the public interest the establishment and operation of saw
mills and saw pits and trade of sawing for the protection and conservation of
forest and the environment (emphasis applied).
This Court has on more than one occasion
proclaimed the need for strict regulation of wood based industries after
identifying the proliferation of such industries to constitute the main cause
of degradation of forests, resulting in serious threat to ecology and
environment protection. Apparently conscious of the nature of evil to be curbed
and the laudable object to be achieved a most liberal and wide definition of
`Sawing of all comprehensive nature has been enacted to rope in all kinds of
activities connected with the use and consumption of wood and ultimately
classify the users under two different categories depending upon the nature of
operation viz., manual operation or operation with the aid of electrical or
mechanical power. Section 5 of the Act not only prohibits the establishment of
a saw mill/saw pit except under the authority and subject to the conditions of
a licence granted but also further interdict the operation of such mill or pit
even in existence on the appointed date, with grant of a leeway period to
enable the existing mills/pits to apply and obtain the required licence.
Keeping in view all these and the provisions contained in Section 10 of the
Act, the words `business of the saw mill or saw pit used in relation to
submission of returns have to be construed in its generic sense of calling,
occupation or pursuit and not restrict the same to the use of the word in a
commercial sense or trade parlance. The object underlying Sections 9 and 10
seem to be to trace the origin or identity as well as source of the timber/wood
and keep track of the transit movement of the wood utilised to prevent and
effectively check ultimately indiscriminate and illicit felling of trees
resulting in deforestation. The decision of this Court relied upon for the
appellant, properly construed and the principles laid down therein appreciated
and applied in their proper perspective tend to support rather the stand taken
for the respondent-State. That the legislature thought of enacting a saving
clause in Section 25 to make it clear that nothing in the Act or the Rules
shall apply to the ordinary operations of carpentry not involving saw mill or
saw pit operations and any saw pit or saw mill owned by the State Government
also serve as an indicator of the intention of the legislature to have only an
all comprehensive regulations to effectively control, regulate and supervise
the transit/movement of the wood from its origin to ultimate utilisation by
those who have saw mills/saw pits as defined under the Act.
The attempts made on behalf of the
appellant-company to demonstrate that the obligations cast upon a licensee under
Sections 9 and 10 of the Act and the Rules made thereunder and Form No.D
prescribed are not capable of being complied with by the appellant and it would
otherwise be superfluous also for the reason that they purchase the timber/wood
needed for their requirements only from registered dealers and they themselves
do not deal with or sell the timber as such timber to anyone else but merely
utilise the same and thereby consume the timber/wood in the course of the
process of manufacturing the automobiles of various kinds do not either appeal
to us or merit our acceptance. Being a bulk consumer of huge quantity of
timber/wood, utilising them by carrying on sawing activities in their saw mills
though located in their premises driven with electrical and mechanical power,
it is but necessary that the appellant-company should obtain a licence under
the Act so that the authorities of the forest department can effectively keep
track of their purchases and utilisation and thereby ensure that their
activities do not in any manner help or encourage even indirectly those engaged
in illicit felling of trees in disposing of such ill-gotten timber/wood. The
maintenance of the accounts and submission of returns as enjoined under
Sections 9 and 10 and the Rules made thereunder will help to effectively
enforce the provisions of the Act as also the other legislation in force in
order to conserve and safeguard the forests. We find it difficult to agree with
the claim of the learned counsel for the appellant that the word `disposal in
Rule 7, should be interpreted to mean only disposal by way of sale of wood in
some form or other as wood by drawing inspiration from the columns/heads in
Form-D such as `sales and `interstate.
The word `disposal is of wide import and
would include all acts or process of disposal in the sense of regulating,
ordering, conducting or conditioning of something or business and also putting
in a particular place or location, anything. If the Form No.D had a column
Sale, the licensee need only record that the goods have been consumed by them
indicating local consumption in their factory premises and that it was not
transported as timber simpliciter outside their factory. Even otherwise, the
obligation to maintain and preserve accounts as envisaged in Section 10 of the
Act and the Rules made there under with particulars specified in Form-E cannot
be disowned and this obligation is independent of even the liability to submit
returns as envisaged under Section 9. Therefore, we find nothing in the Rules
or Forms prescribed to justify any claim of immunity for the appellant from the
liabilities and obligations cast upon it under the Act and the Rules.
For all the reasons stated above, we see no
merit in the challenge made to the order of the High Court. The appeal, consequently,
fails and is dismissed. No costs.
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