T.N. Godavarman
Thirumulpad Vs. Union of India & Ors [2005] Insc 504
(26 September 2005)
Y.K.Sabharwal,
Arijit Pasayat & S.H.Kapadia
IA
NO.826 IN IA NO.566 IN WRIT PETITION (C) NO.202 OF 1995 [WITH IA NO.932 IN
819-821, 955,958,985,1001-1001a,1013-1014, 1016-1018, 1019, 1046, 1047,
1135-1136, 1137, 1164, 1180- 1181 AND 1182-1183, 1196, 1208-1209, 1222-1223,
1224-1225, 1229, 1233, 1248-1249, 1253, 1301-1302, 1303-1304, 1312, 1313, 1314,
1315-1316, 1318 AND 1319 IN WP (C) NO. 202 OF 1995] Y.K. Sabharwal, J.
Natural
resources are the assets of entire nation. It is the obligation of all
concerned including Union Government and State Governments to conserve and not
waste these resources. Article 48A of the Constitution of India requires the
State shall endeavour to protect and improve the environment and to safeguard
the forest and wild life of the country. Under Article 51A, it is the duty of
every citizen to protect and improve the natural environment including forest,
lakes, rivers and wild-life and to have compassion for living creatures.
In the
present case, the question is about conservation, preservation and protection
of forests and the ecology. When forest land is used for non-forest purposes,
what measures are required to be taken to compensate for loss of forest land
and to compensate effect on the ecology, is the main question under
consideration.
Forests
are a vital component to sustain the life support system on the earth. Forests
in India have been dwindling over the years
for a number of reasons, one of it being the need to use forest area for
development activities including economic development. Undoubtedly, in any
nation development is also necessary but it has to be consistent with
protection of environments and not at the cost of degradation of environments.
Any programme, policy or vision for overall development has to evolve a
systemic approach so as to balance economic development and environmental
protection. Both have to go hand in hand.
In
ultimate analysis, economic development at the cost of degradation of
environments and depletion of forest cover would not be long lasting.
Such
development would be counter productive. Therefore, there is an absolute need
to take all precautionary measures when forest lands are sought to be directed
for non forest use.
The
point in issue is whether before diversion of forest land for non- forest
purposes and consequential loss of benefits accruing from the forests should
not the user agency of such land be required to compensate for the diversion. If
so, should not the user Agency be required to make payment of Net Present Value
(NPV) of such diverted land so as to utilize the amounts so received for
getting back in long run the benefits which are lost by such diversion? What
guidelines should be issued for determination of NPV? Should guidelines apply
uniformly to all? How to calculate NPV? Should some projects be exempted from
payment of NPV? These are the main aspects which require examination and
determination in the backdrop of various legislations which we would presently
notice.
The
legislature to provide for conservation of forest and for matters connected
therewith or ancillary or incidental thereto enacted the Forest (Conservation) Act, 1980 (for
short, the 'FC Act'). It postulates that no State Government or other authority
shall make, except with the prior approval of the Central Government, any order
directing that any forest land or any portion thereof may be used for any
non-forest purpose. The Central Government under the FC Act has been empowered
to constitute a Committee to advice it with regard to grant of approval. Under
Section 2 of the Act the question of use of any forest land for non-forest
purposes and any other matter connected with the conservation of forest may be
referred to such a committee by the Central Government under the FC Act.
The
contravention of any of the provisions of Section 2 has been made an offence.
Noticing
the decline in environment quality due to increasing pollution, loss of vegetal
cover and biological diversity, excessive concentrations of harmful chemicals
in the ambient atmosphere and in food chains, growing risks of environmental
accidents and threats to life support system, the Environment (Protection) Act,
1986 (for short, the 'EP Act') has been enacted. It has been noted in the
Statement of Objects and Reasons that although there are existing laws dealing
directly or indirectly with several environmental matters, it is necessary to
have a general legislation for environmental protection. Existing laws
generally focus on specific types of pollution or on specific categories of
hazardous substances. Some major areas of environmental hazards are not
covered.
There
also exist uncovered gaps in areas of major environmental hazards.
There
are inadequate linkages in handling matters of industrial and environmental
safety. Control mechanisms to guard against slow, insidious build up of
hazardous substances, especially new chemicals, in the environment are weak.
Because of a multiplicity of regulatory agencies, there is need for an
authority which can assume the lead role for studying, planning and
implementing long-term requirements of environmental safety and to give
direction to, and co-ordinate a system of speedy and adequate response to
emergency situations threatening the environment. The EP Act was, therefore,
enacted to provide for protection and improvement of environment and for
matters connected therewith.
The
Central Government has been given wide powers to take measures to protect and
improve the environment as provided under Section 3 including the power to
constitute an authority or authorities for the purpose of exercising and
performing such of the powers and functions, including the power to issue
directions under Section 5, of the Central Government under the Act and for
taking measures with respect to such of the matters referred to in sub-section
(2) of Section 3 as may be mentioned in the order and subject to the prejudice
and control of the Central Government.
Section
5 of the EP Act empowers the Central Government, in exercise of its powers and
performance of its function under the Act, to issue directions in writing to
any person, officer or any authority and such person, officer or authority
shall be bound to comply with such directions.
The
Central Government has the power to direct the closure, prohibition or
regulation of any industry, operation or process or stoppage of regulation of
the supply of electricity or water or any other service.
Parliament
has also enacted enactments to prevent and control water pollution and air
pollution [The Water (Prevention and Control of Pollution) Act, 1974 and the
Air (Prevention and Control of Pollution) Act, 1981].
A
statement was placed before this Court by the Central Government showing the
position as on 20th
March, 2000 of the
cases approved for diverting forest lands, stipulation for compensatory afforestation
under the FC Act and the compensatory afforestation done, funds to be utilized
and actually utilized. The Court noted the dismal situation as there was a
shortfall to the extent of 36% of total afforestation compensatory or otherwise
afforestation. It further noted that though funds had been realized by all the
States in connection with such afforestation, a very large number of States had
spent 50% or less amount on afforestation. In this background, taking suo moto
action, notices were directed to be issued to the States mentioned in the Order
dated 17th April, 2000 to explain as to why moneys
realized have not been spent on carrying out afforestation.
On 23rd November, 2001, after considering the affidavits
that had been filed, it was noted that large sums of money had been realized by
various States from the user-agency to whom permits were granted to use forest
land for non-forest purposes. The moneys were paid by user agencies to the
State Governments for compensatory afforestation but the utilization was only
about 83% of the funds actually realized by the State Governments, the
shortfall being of nearly Rs.200 crores.
The
Ministry of Environment and Forests (MOEF) was directed to formulate a scheme
providing that whenever any permission is granted for change of use of forest
land for non-forest purposes and one of the conditions of the permission is
that there should be compensatory afforestation, then the responsibility of the
same should be that of user- agency and it should be required to set apart a
sum of money for doing the needful. In such a case the State Government will
have to provide or make available land on which reforestation can take place
and this land may have to be made available either at the expense of the
user-agency or of the State Government, as the State Government may decide. It
was decided that the scheme shall ensure that afforestation takes place as per
the permissions which are granted and there should be no shortfall.
The
scheme was submitted by MOEF alongwith an affidavit dated 22nd March, 2002.
The
Central Empowered Committee (CEC) on consideration of relevant material
including the scheme submitted by MOEF made its report (IA 826) containing
recommendations dated 9th
August, 2002. The
report, taking note of the present system of compensatory afforestation as per
guidelines issued by MOEF from time to time under the FC Act, the procedure for
receipt and utilization of funds for compensatory afforestation, activities
permissible under compensatory afforestation, adequate compensation for loss of
forest land recovery of Net Present Value, funds for catchment area, treatment
plant and involvement of user- agency for compensatory afforestation, made the
following recommendations :
(a) in
addition to the funds realized for compensatory afforestation, net present
value of the forest land diverted for non- forestry purposes shall also be
recovered from the user agencies, while according approval under the Forest
(Conservation) Act, 1980;
(b) a
'Compensatory Afforestation Fund' shall be created in which all the monies
received from the user-agencies towards compensatory afforestation, additional
compensatory afforestation, penal compensatory afforestation, net present value
of forest land, Catchment Area Treatment Plan funds, etc., shall be deposited.
The rules, procedure and composition of the body for management of the
Compensatory Afforestation Fund shall be finalized by the Ministry of
Environment & Forests with the concurrence of Central Empowered Committee
within one month;
(c) the
funds received from the user-agencies in cases where forest land diverted falls
within Protected Areas i.e. area notified under Section 18, 26A or 35 of the
Wild Life (Protection) Act, 1972, for undertaking activities related to
protection of bio- diversity, wildlife, etc., shall also be deposited in this
Fund. Such monies shall be used exclusively for undertaking protection and
conservation activities in protected areas of the respective State/UT;
(d) the
amount received on account of compensatory afforestation but not spent or any
balance amount lying with the State/UT or any amount that is yet to be
recovered from the user agency shall also be deposited in this Fund;
(e) besides
artificial regeneration (plantations), the funds shall also be utilized for
undertaking assisted natural regeneration, protection of forests and other
related activities. For this purpose, site specific plans should be prepared
and implemented in a time bound manner;
(f)
the user agencies especially the large public sector undertakings such as Power
Grid Corporation, NTPC, etc., which frequently require forest land for their
projects should also be involved in undertaking compensatory afforestation by
establishing Special Purpose Vehicle.
Whereas
the private sector user-agencies may be involved in monitoring and most
importantly, in protection of compensatory afforestation. Necessary procedure
for this purpose would be laid down by the MOEF with the concurrence of the
Central Empowered Committee.
(g)
Plantations must use local and indigenous species since exotics have long term
negative impacts on the environment; and
(h) an
independent system of concurrent monitoring and evaluation shall be evolved and
implemented through the Compensatory Afforestation Fund to ensure effective and
proper utilization of funds.
The
aforesaid report, inter alia, notes that there was general consensus amongst
the States/Union Territories that the present practice of concentrating only on
artificial regeneration through plantations should be dispensed with as it does
not adequately compensates the loss of natural forest and that a part of the
fund should also be used for assisted natural regeneration wherein the natural
forests are allowed to regenerate and grow by undertaking silvicultural and
cultural operations such as fire tracing, singalling of seedlings, protection,
etc. These activities help in regenerating the rootstock which may exists in
the degraded forests.
Besides,
this helps in restoring the natural forests, which is not possible through
plantations. It also noted that to compensate for the loss of tangible as well
as intangible benefits flowing from the forest lands which has been diverted
for non-forest use, the NPV of such land is being recovered from the user
agency in the States of Madhya Pradesh, Chhattisgarh and Bihar. In the states
of Madhya Pradesh and Chhattisgarh, the NPV is being recovered at the rate of
Rs.5.80 lac per hectare to Rs.9.20 lac per hectare of the forest land depending
upon the quality and density of the forest land diverted for non-forestry use.
The underlying principle for recovery of NPV was that the plantations raised
under the compensatory afforestation scheme could never adequately compensate
for the loss of natural forests as the plantations require more time to mature
and even then they are a poor substitute to natural forest. It noted that
States/Union Territories as well as MOEF are of the view that in addition to
the funds realized for compensatory afforestation, the NPV of the forest land
being directed for non-forestry purposes should also be recovered from the
user-agencies.
The
MOEF, in principle, accepted the aforesaid recommendations of CEC. The order
dated 29th October,
2002 notices this
fact. Further noticing that no other State had filed any response to the report
of CEC, the Court presumed that the State Governments were also not opposed to
the said report and have accepted the same in the same manner as Union of
India. On detailed examination of the report, the recommendations of CEC were
accepted and Union of India was directed to frame comprehensive rules with
regard to the constitution of a body and management of the compensatory afforestation
funds in concurrence with the CEC. It was directed that the compensatory afforestation
funds which had not yet been realized by the States shall be transferred to the
aforesaid body by respective States and the user agencies within six months of
its constitution. In addition, while according approval under the FC Act for
change in user, the user-agency shall also pay into the said fund, the NPV of
forest land diverted for non-forest purposes at the rate of Rs.5.80 lac per
hectare to Rs.9.20 lac per hectare of forest land depending upon the quality
and density of the land in question converted for non- forest use. The amount
was subject to upward revision by the MOEF in consultation with CEC as and when
necessary. The aforesaid recommendations of CEC were accepted.
An
application (I.A.No.1046) was filed by the MOEF, inter alia, seeking directions
that the NPV calculation shall be part of the detailed project report submitted
to it for a forestry clearance under the FC Act.
During
the course of hearing, learned Solicitor General informed this Court that the
Government was agreeable to the suggestions of CEC that money received from
user-agencies for compensatory afforestation fund should be kept in an interest
bearing account, though initially it had some reservations about it. Reference
has also been made in the application about exemption being granted to some
projects from payment of NPV, an aspect which we would consider later at an
appropriate stage so also the basis of the calculation of the NPV. We may,
however, note that although in the application it was stated that the format
issued by the World Bank for calculation for NPV for the projects shall be the
basis of its calculation, the learned Solicitor General stated that he was not
relying upon the said format. Regarding the mining projects, the application
mentions that there has to be difference in approach for mineral of high volume
and low volume and low value and minerals of high value and low volume. It is
stated that levying of flat rates of NPV per hectare basis will, therefore, not
be rational. The application states that in case of mining, NPV should be
calculated at the rate of 10% for the major minerals and 5% for the minor
minerals to be levied on the annual royalty. An application (IA 1047) has also
been filed by the Ministry of Mines, Government of India taking similar pleas
as are taken in IA 1046 seeking directions that in mining NPV may be calculated
at the rate of 10% and 5% as above noted.
Now,
we may refer to Notification dated 23rd April, 2004 issued by MOEF in exercise
of the powers conferred by sub-section (3) of Section 3 of the EP Act
constituting an authority known as Compensatory Afforestation Fund management
and Planning Authority (hereinafter referred to as 'CAMPA') for the purpose of
management of money towards compensatory afforestation, NPV and any other money
recoverable in pursuance of this Court's order and in compliance of the
conditions stipulated by the Central Government while according approval under
the FC Act for non-forestry uses of the forest land. The Executive Body of the
Authority comprises of the following:
"(i)
Director General of Forests and - Chairperson Special Secretary, Ministry of
Environment and Forests, Government of India
(ii) Addl.Director
General of Forests - Member (Forests) Ministry of Environment and Forests,
Government of India
(iii) Addl.Director
General of Forests - Member (Wildlife)
(iv)
Inspector General of Forests (Forest - Member
Conservation), Ministry of Environment And Forests, Government of India
(v)
Joint Secretary and Financial Advisor, - Member Ministry of Environment and
Forests, Government of India
(vi)
Chief Executive Officer (CEO) - Member
(vii)
A professional ecologist, not being from - Member The Central and State
Government, for A period of two years at a time, for up Two consecutive
terms." The powers and functions of the Executive Body are:
"(a)
deployment of staff on contractual basis or on deputation;
(b) financial
procedure;
(c) delegation
of financial or administrative powers;
(d) other
day-to-day working in respect of receipts of funds;
(e) investment
of funds;
(f) expenditure
on establishment and other overheads including office accommodation subject to
the approval of the annual budget by the Governing Body." The management
of the fund is provided in clause 6.3 and the disbursement of the fund in
clause 6.4 of the Notification. These clauses read as under:
"6.3
Management of the Fund:
(i)
The amount collected by the CAMPA shall be invested in Reserve Bank of India,
Nationalized Banks, Post Office, Government Securities, Government Bonds and
deposits.
(ii)
The non-recurring as well as recurring cost for the management of CAMPA
including the salary and allowances payable to its officers and staff shall be
met by utilizing a part of the income by way of accused interest on the funds
invested by the CAMPA excluding income from funds received as per para 6.2(ii).
(iii)
The expenditure incurred on independent monitoring and evaluation shall be
borne by the CAMPA out of the income by way of interest on the funds invested
by the CAMPA excluding income from funds received as para 6.2(iii).
(iv)
The CAMPA shall get the annual accounts audited internally as well as
externally through chartered accountant(s) who are on the panel of the
Comptroller and Auditor-General of India and the auditor(s) shall be selected
on the approval of the Governing Body.
6.4
Disbursement of Funds:
(i)
The money received for compensatory afforestation, additional compensatory afforestation
may be used as per the site specific schemes received from the States and Union Territories along with the proposals for diversion of forest land under
the Forest (Conservation) Act, 1980.
(ii)
The money received towards Net Present Value (NPV) shall be used for natural
assisted regeneration, forest management, protection, infrastructure dev
elopement, wildlife protection and management, supply of wood and other forest
produce saving devices and other allied activities.
(iii)
Monies realized from the user agencies in pursuance of the Hon'ble Supreme
Court's order or decision taken by the National Board for Wildlife involving
cases of diversion of forest land in protected areas shall form the corpus and
the income therefrom shall be used exclusively for undertaking protection and
conservation activities in protected areas of the States and the Union
Territories and in exceptional circumstances, a part of the corpus may also be
used subject to prior approval of the CAMPA.
(iv)
CAMPA shall release monies to concerned State and Union Territory in predetermined installments through the State Level
Management Committee as per the Annual Plan of Operation (APO) finalized by the
concerned State and the Union Territory.
(v)
The monies received in CAMPA from a State or the Union Territory as per para
6.2 and the income thereon after deducting expenditure incurred by the CAMPA on
its establishment cost, monitoring and evaluation on a prorate basis shall be
used only in that particular State or the union Territory." Clause 6.6
provides for other functions and reads thus:
"(i)
The CAMPA may establish Special Purpose Vehicles (SPV) for undertaking
compensatory afforestation particularly by involving large public sector
undertakings which frequently require forests and for their projects, in
consultation and as far as possible with the concurrence of the CEC.
(ii)
The CAMPA may also consider evolving new mechanism to generate additional
sources of fund for forest conservation works and to create capacity and data
base for better conceptualization and management of fund." Having regard
to the nature of the functions of the Executive Body of the CAMPA, we find
substance in the suggestion of learned Amicus Curiae that there should be more
involvement of NGOs by including in the Executive Body, the conservationists,
environmentalists, economists and experts in forestry. We are of the view that
the Executive Body deserves to be expanded as, presently, only one professional
ecologist is its member, remaining all being officers of the Government. We may
note here that a forthright and fair stand was taken by the learned Solicitor
General not only in regard to the constitution of CAMPA but on other aspects
also, keeping in view the non-adversarial nature of the litigation.
Learned
Solicitor General submitted that the Government is committed to conserve the
forest and protect the environments, and would implement, in letter and spirit,
the directions issued by this Court.
In
view of above, we direct that clause 2.2 shall be suitably amended so as to
include two more environmentalists, one of whom may be expert in the field of
forest and the other in the field of forest economy development. These members
shall be included in the Executive Body in consultation with the Chairperson of
the CEC.
Regarding
clause 6.3(iv), it was suggested that there should be corporate accounting
based on double entry system and auditing should be conducted by the
Comptroller and Auditor-General (CAG). We see substance in this suggestion as
well.
Clause
(v) in 6.4 provides that the monies received in CAMPA shall be used only in
that particular State or Union Territory. The clause seems to be too rigid.
Many a times, the effect of degradation of environment or depletion of forest
can be felt more in the adjoining area which may be in a different State or
Union Territory. The effect of environmental degradation cannot be restricted
to a particular area. The impact cannot be limited to the place of origin.
Therefore, we direct that a suitable modification of the clause shall be made
so as to provide that ordinarily expenditure shall be incurred in the
particular State or Union Territory but leaving it to the discretion of the
CAMPA to also incur expenditure in the State or Union Territory other than the
one mentioned in clause 6.2 if it considers it necessary.
Clause
6.6 which by use of the word 'may' leaves it to the discretion of the CAMPA to
establish Special Performance Vehicle (SPV) for undertaking compensatory afforestation
deserves to be amended so as to substitute the word 'may' by the word 'shall'
so that the regeneration is done by some SPV in specified areas.
Now,
we come to the question of the guiding principle to be laid for determining the
NPV. Reference was made to opinions of various experts laying down as to what
is the concept of NPV and how it is to be calculated. The question is also
about the legal and jurisdictional basis to levy NPV. Most of the States did
not object to the recovery of the NPV from the user-agency but strenuously
urged that since the land under the forest belongs to the State, the amount
deposited by the user-agency as NPV shall be paid to them. It was also
contended on behalf of the States that there should be no NPV on degraded forest.
The further submission was that all public utility projects shall be exempted
from payment of NPV.
On the
other hand, relying upon the principles of inter-generational equity and
sustainable development, Mr. Harish Salve, learned senior counsel and Amicus
Curiae contended that forest is a part of eco-system and, therefore, the value
to be put and calculated is not only on trees and leaves but the basis has to
be the preservation of bio-diversity. It is submitted that NPV is to be levied
and collected not because property rights of the States are affected but on
account of effect on ecology by conversion of forest land for non-forest
purpose. Further, Mr. Salve submits that the basis for calculation of NPV
should be the economic value, spread over a period of 50 years, which would be regenerational
value for forest regeneration to be taken into account as opposed to
restoration value, i.e., financial value. Regarding legal and jurisdictional
basis to levy NPV, Mr. Salve contended that there are various legal principles
which act as source of power to levy NPV. In this regard, reference has been
made to provision of the FC Act, EP Act and Forest Policy of 1988. It is
contended that these enactments and the policy are the measures taken by the
legislature and the Government to discharge the constitutional obligation to
protect the environments. Reliance is also placed upon the doctrine of public
trust, which learned counsel submits is a constitutional doctrine.
First,
we may consider the meaning of NPV and determine what is NPV.
The
NPV is the present value (PV) of net cash flow from a project, discounted by
the cost of capital.
Forestry
is a public project. It is important to bear in mind that a benefit received
today is worth more than that received later. The benefit received today is in
fact 'cost incurred' today. Time value of the cash inflow/outflow is important
in investment appraisal. NPV is a method by which future expenditures (costs)
and benefit are levelised in order to account for the time value of money. The
object behind NPV is to levelise costs. What is the value of Rupee today would
not be the value of Rupee say 50 years later. For example, let us have the
starting point of value of Rupee in India in the year 2005 and analyse it with
the value of Rupee that may be in the year 2050. Cost incurred or to be
incurred in 2050 have to be discounted by using appropriate parameters like
rate of discount, gestation period, ratio of deflators to GDP. Therefore,
expenses incurred in each year between say 2005 and 2050 have to be brought
down to their present values by using appropriate discount rate in the NPV.
The
project like forestry has long gestation period of 40-50 years. It goes through
cost cycles each year depending upon inflation, rate of interest, internal rate
of return etc. Therefore, costs for the year 2005 will differ from the cost of
2006 and cost of 2006 will differ from that of the year 2007 and so on and so
forth. However, this constitutes what is called as conventional method of
accounting cost which does not take into account social and economic cost of
diversion of forest.
Cost
is a function of the discount rate (a measure of the value of capital) used.
Under NPV, all costs are discounted to some reference date which we have taken
as 2005 for illustration. The total cost reckoned at this reference date is the
sum of present value or future value of costs discounted to the year 2005.
Similarly, one can calculate the present value of the revenues from the
expected benefits of forest regeneration.
The
question then is why charge NPV. In the case of a conventional project like
Hydro-electric Project, the accounting procedure is normally based on Return On
Investment (ROI) in which the unit cost of energy includes return on capital,
investment, depreciation of capital, annual fuel cost and operational and
maintenance costs. However, ROI excludes the time value of money. It also
excludes the gestation period of the project.
Therefore,
we have the NPV method which discounts future costs and future benefits by use
of appropriate discount rate and brings down such costs and benefits to the
reference date which in the present case has been assumed to be the year 2005.
The
question, which we have to answer, is concerning the relevance of fixing appropriate
discount rate in valuation of the costs and benefits arising from forestry as a
project.
The
value of any asset is discounted by present value of the economic benefits it
will generate in future years. For example, timber asset value is the discounted
future stumpage price for mature timber after deducting costs of bringing the
timber to maturity. NPV is one of the methods for valuation of standing timber.
The general expression V for the value of an asset, in the base year O, is
simply the sum of the net economic benefits it yields in each year over the
life time, T, of the Asset, discounted to the present value by the discounted
rate.
The
current method of valuing public sector projects, like forestry, has become
contentious as public sector undertakings agrees for lower discount rate on
account of long gestation period. However, the flaw with this argument is that
the low rate of return is computed without including the intangible or
environmental impacts/benefits emanating from forest.
How does
one value the intangibles? There are several methods, viz, opportunity cost,
replacement cost, travel cost, contingent value method (CVM) and social benefit
cost analysis (SBCA).
SBCA
can be applied to the evaluation of environmental impacts of forestry projects.
Here, one must appreciate that the environmental outputs from forests appear as
public goods for which there is no market.
Various
environmental outputs can be classified into this category, namely, Flood
Control Benefits Water Production Soil Conservation Outdoor Recreation
Biodiversity & Conservation Habitat Air Purification The problem in
valuation of the above outputs is: allocation of fixed costs according to the
contribution of each product in total revenue. This is because except contribution
of timber product, contribution of the other above-noted outputs is not known,
especially intangible outputs. However, under SBCA, benefits from each of the
above environmental outputs are identifiable. For example, flood control
benefits arise because of the role of forests as stream regulator. Similarly,
valuation method for each of the above outputs differs. In valuing
biodiversity, CVM is useful. SBCA is helpful in placing monetary value on
carbon storage on air purification.
The
point is that for each of the above functions of the forests, different methods
of valuation have to be applied. Various methods have been used to estimate the
value of environment like CVM, Opportunity Cost Method, Travel Cost Method,
SBCA etc. It would be appropriate if body of experts examine the aspect and
report to this Court suggesting the best method depending on factors like
gestation period, rate of discount (interest), density of the forest, social
benefits of the project undertaken by PSU etc. They will take into account
economic values associated with forests, viz., direct use values, indirect use
values such as value of environmental benefits from the forest, option values
and existence value.
The
above discussion shows that NPV helps levelising the costs of public projects
like forestry. It is an important tool of SBCA. Under SBCA, benefits from each
of the above environmental outputs are identifiable.
Hence,
applying NPV, one can allocate levelised costs according to the contribution of
each product in the total revenue. It is important to bear in mind that a
benefit or cost received or incurred now is worth more than that received or
incurred later. Therefore, using the appropriate discount rate helps to
aggregate marginal benefits and costs. The choice of interest rate depends upon
time preference. For public project, such as forestry, a social discount rate,
which indicates time preference of the society, should be used.
Forest
sustainability is an integral part of forest management and policy that also has
a unique dominating feature and calls for forest owners and society to make a
long-term (50 years or longer) commitment to manage the forest for future
generation. One of the viewpoints for sustaining forest is a naturally
functioning forest ecosystem. This view point takes a man and nature
relationship to the point of endorsing to, the extent possible, the notion of
letting forest develop and process without significant human intervention. A
strong adoption of the naturalistic value system that whatever nature does is
better than what humans do, this is almost the "nature dominates man"
perspective. Parks and natural reserve creations; non-intervention in insect,
disease and fire process; and reduction of human activities are typical policy
situation. This viewpoint has been endorsed by 1988 Forest Policy of Government
of India.
Yet
another viewpoint recognizes the pragmatic reality faced by the governments and
the administrative, namely, trees don't vote while people do. Some of the
criteria reflecting key elements of ecological, economic and social
sustainability are:
1.
Conservation of biological diversity.
2.
Maintenance of productive capacity of forest ecosystems.
3.
Maintenance of forest ecosystem health and vitality.
4.
Conservation and maintenance of soil and water resources.
5.
Maintenance of forest contribution to global carbon cycles.
6.
Maintenance and enhancement of long-term multiple socioeconomic benefits to
meet the needs of societies.
7.
Legal, institutional and economic framework for forest conservation and
sustainable management.
An
expert dealing with principles and applications of forest valuation, on the
aspect of value of inputs and outcomes and conditions, says :
"Decision
making in forest management requires that we understand the relative values of
inputs, outcomes, and conditions. Cost values for inputs such as labour,
capital, interest, supplies, legal advice, trades, and other management
activities as well as the market value of existing timber stands are relatively
easy to obtain. Outcomes or resulting condition values are more difficult, but
we need measures of the values of timberland, recreation, water, wildlife,
visual amenities, biodiversity, environmental services, and ecological process
to help guide management decisions. By understanding market, social and other
values of forests, we can better allocate our scarce and valuable resources to
attain the desired mix of outcomes and conditions." The emphasis is on
ecosystem, management philosophy that has greater emphasis on integration,
biological diversity and ecological processes.
In
respect of working economic values of the outcome, it is said:
"In
real world forest management situations, decision makers are faced with several
alternatives and potentially large sets of criteria related to the ecological,
economic and social impacts of these alternatives. It would be very easy to
generate a nearly incomprehensible table that documented every physical,
biological, economic, and social outcome and condition resulting from each
management alternative.
Such
information could include outcome levels for water yield, sediment production,
and timber growth; population trends for important wildlife species; and
recreation use for backcountry and developed recreation sites. Similarly,
information on the economic value of these outcomes can be estimated by means
of the methods discussed in chapter 8 and added to our impact table. To this
avalanche of information, we could add the impacts on the social well-being of
local and regional communities. The forest management analyst can easily
overwhelm the decision makers and stakeholders with information." Dealing
with fundamental of decision analyses to achieve ecological, economic and
social goals, it is said that what is to be broadly kept in view is:
"Ecological
and environmental goals are important to forest managers, landowners, and their
stakeholders, we need information about how decision alternatives affect such
goals.
These
goals can be broadly stated as
1.
Maintaining and enhancing forest productivity
2.
Conservation of biological diversity
3.
Protecting and enhancing environmental conditions." The aforesaid also
shows that NPV as a tool of SBCA is required to be based on Total Economic
Value (TEV). It indicates the components of TEV. It further shows what are the type
of agency or experts which are required to examine these issues.
Dealing
with co-relation between economics and environmental management, in
'Environmental Economics in practice' edited by Mr. Gopal K. Kadekodi in his
write up through case studies, answers the question as to what has economics
got to do with environmental management. The author says that economics is the
science of explaining the behaviour of different agents who take part in
production, consumption and distribution activities in the economy and make
decisions regarding the use of resources. That, environmental economics focuses
on market and non-market behaviour of different agents in the society regarding
natural and environmental resources, viewed from intergenerational, inter-
temporal and different institutional frameworks. (Emphasis supplied by us) It
is further stated that one of the major branches of economic theory is the
'theory of value'. Economic theory always makes a distinction between value and
price. Answering the question as to why value natural resources specifically,
it is stated that one reason is that there is no market for ecosystem services
such as nutritional cycle, carbon sequestration, watershed functions, temperature
control, soil conservation etc. It is also stated that assuming there are
markets, they do not do their job well. This market may be regulated one. There
may be restrictions on entry as a result of licensing or rationing introduced
by the Government. For the above reasons, it is concluded that valuation beyond
the present is necessary and for natural resource Accounting NPV method is a
must.
Mr.
Salve advocates for Total Economic Value (TEV) on the ground that TEV expresses
the full range of value or benefits both tangible and intangible. Basically,
it is understood that natural and environmental resources provide several 'use
values' and 'non-use values' to enhance human welfare and provide
sustainability to all lives (often termed as anthropogenic values).
Conceptually, it is the sum of use values (UV) and non-use value (NUV) which
constitutes the TEV. Further elaborations UV, option value (OV) non-use value
(NUV) etc. have been given. The UV, it is stated, can be further broadly
classified into three groups direct, indirect and option values. Direct Use
Values (DUV) refer to the current use (consumption) of the resources and
services provided directly by natural and environmental resources. Examples are
the use of timber and non- timber forest products. Recreation (tourism to
wildlife sanctuaries or Himalayan Glaciers, mountains), education, research
etc., are examples of direct non-consumptive use values. Indirect Use Values
(IUV) generally are referred to the ecological functions that natural resource
environments provide. It can be broadly classified into three groups watershed
values, ecosystem services and evolutionary processes. The Optional Value (OV)
is associated with the benefits received by retaining the option of using a
resource (say a river basin) in the future by protecting or preserving it
today, when its future demand and supply is uncertain. Take the example of the Narmada
river basin.
It is
not necessary to delve further in this matter since ultimately it would be for
the experts to examine and assist this Court as to the Model to be adopted for
valuation, namely, TEV, CVM, SBCA etc. It is for the experts to tell us as to
what NPV should be applied in case of mines and different types of forests. We
may only note that basis of these valuations is the theory of sustainable
development, i.e., development that meets the needs of the present without
compromising with the ability of future generations to meet their own needs.
Despite various elaborations, definition of sustainable development, though
very old, still is widely accepted world over and has been reiterated by this
Court in catena of cases.
Regarding
the parameters for valuation of loss of forest, we may only note as to what is
stated by Ministry of Environment and Forests, Government in its handbook
laying down guidelines and clarifications upto June 2004 while considering the
grant of approval under Section 2 of the FC Act. Dealing with environmental
losses (soil erosion, effect on hydrological cycle, wildlife habitat, microclimate
upsetting of ecological balance), the guidelines provide that though technical
judgment would be primarily applied in determining the losses, as a thumb rule,
the environmental value of one hectare of fully stocked forest (density 1.0)
would be taken as Rs.126.74 lakhs to accrue over a period of 50 years.
The
value will reduce with density, for example, if density is 0.4, the value will
work out at Rs.50.696 lakhs. So, if a project which requires deforestation of 1
hectare of forest of density 0.4 gives monetary returns worth over Rs.50.696 lakhs
over a period of 50 years, may be considered to give a positive cost benefit
ratio. The figure of assumed environmental value will change if there is an
increase in bank rate; the change will be proportional to percentage increase
in the bank rate. Ms. Kanchan Chopra, while conducting the case study of Keoladeo
National Park in respect of economic valuation of biodiversity at the institute
of economic growth, Delhi as a part of the Capacity 21 project sponsored by the
UNDP and MOEF, Government of India examined the question as to what kind of
values are to be taken into consideration. As per the study, different
components of biodiversity system possess different kinds of value
(1) a
commodity value (as for instance the value of grass in a park),
(2) an
amenity value (the recreation value of the park) and/or
(3) a
moral value (the right of the flora and fauna of the park to exist).
It is
recognized that it is difficult to value ecosystem, since it possesses a large
number of characteristic, more than just market oriented ones. It also leads to
the need to carry out bio-diversity valuation both in terms of its market
linkage and the existence value outside the market as considered relevant by a
set of pre-identified stakeholders. It is, however, evident that while working
out bio-diversity valuation, it is not trees and the leaves but is much more.
Various
techniques for valuing biodiversity that have been developed to assess the
value of living resources and habitats rich in such resources have been
considered by the author for her case study while considering the aspect of
value, their nature and stakeholders interest. In so far as the value of
ecology function in which the stakeholders or scientists, tourists, village
residents, non-users, the nature of value is regulation of water, nutrient
cycle, flood control. These instances have been noted to highlight the
importance of the biodiversity valuation to protect the environments.
The
conclusions and the policy recommendations of the author are:
"Biodiversity
valuation has important implications for decision making with respect to
alternative uses of land, water and biological resources.
Since
all value does not get reflected in markets, its valuation also raises
methodological problems regarding the kinds of value that are being captured by
the particular technique being used.
Simultaneously,
in the context of a developing country, it is important to evolve methods of
management that enable self-financing mechanisms of conservation. This implies
that biodiversity value for which a market exists must be taken note of, while
simultaneously making sure that the natural capital inherent in biodiversity
rich areas is preserved and values which are crucial for some stakeholders but
cannot be expressed in the market are reflected in societal decision making.
A
focus on both the above aspects is necessary. It is important to take note of
the nature of market demand for aspects of biodiversity that stakeholders, such
as tourists, express a revealed preference for by way of paying a price for it.
Simultaneously, it is important to examine the extent to which a convergence or
divergence exists between value perceptions of this and other categories of
stakeholders. It is in this spirit that two alternative methodologies are used
here to arrive at an economic valuation of biodiversity in Keoladeo National
Park. The travel-cost methodology captures the market-linked values of tourism
and recreation. It throws up the following policy implications :
1.
Keeping in mind the location of the park and the consequent joint product
nature of its services, cost incurred locally is a better index of the price
paid by tourists. It is found that demand for tourism services is fairly insensitive
to price. A redistribution of the benefits and costs of the park through an
increase in entry fee would not affect the demand for its services.
2.
Cross-substitution between different categories of stakeholders can improve the
financial management of the wetland. A part of the proceeds can go to the local
management. Also, high-income tourists, scientists and even non-users with a
stake in preservation can pay for or compensate low-income stakeholders for
possible loss in welfare due to limits on extraction and use.
3.
However, the limit to such a policy is determined by the number of visitors and
their possible impact on the health of the wetland. Such a constraint did not
appear to be operational in the context of the present park.
Identification
and ranking of values of different aspects of biodiversity resources as
perceived and expressed by different categories of stakeholders namely
scientists, tourists, local villagers and non-users is an important object in
the process of valuation. In the KNP study, a fair degree of congruence with
respect of ecological function value and livelihood value is discovered to
exist in the perceptions of diverse groups.
Stakeholders
as diverse as scientists, tourists, local villagers and non-users give high rankings
to these uses." Next question is to which expert reference shall be made. Counsel
for parties agree that Institute of Medical Economic Growth is an institute of eminence having
been set up about half a century earlier. It has also been pointed out that
this Institute is getting regular maintenance and development grant from Indian
Council of Social Sciences research (ICSSR). Further, it appears that the
Institute is also receiving research and training grants from Ministry of
Finance, Ministry of Health and Family Welfare and Ministry of Agriculture,
besides National Bank for Agriculture and Rural Development. We have been
informed that eminent faculty members in the institute are engaged in the field
of research and Ms.Kanchan Chopra, (Ph.D. Economics, University of Delhi) is one such faculty member and her field of specialization
is resources and environmental economics, agriculture and rural development and
project evaluation. The matter deserves to be referred to a committee of
experts in respect whereof we will in latter part of the judgment issue
appropriate directions.
Next,
we will deal with the contention of Mr. Venugopal who, appearing for State of Kerala, submitted that the State has no
objection to the levy of NPV but the amount so received should come to the
State.
Referring
to Notification dated 23rd
April, 2004
constituting CAMPA, learned counsel contended that clause 6.4 of the said
Notification, which deals with disbursement of the funds, does not envisage the
amount being disbursed to the State Government. Learned senior counsel also
challenged the constitutional validity of the Notification. The contention put
forth is that the Notification does not have any Parliamentary or Legislative
control. Referring to various clauses of the notification, it was contended
that fund sought to be created under CAMPA lacks accountability and puts aside
financial control. There is a total lack of financial discipline which, learned
counsel contends, is against the constitutional framework. It was further
contended that the forests vest in the Government; the same are State
properties and, therefore, all amounts received shall go to Consolidated Fund
of India or Consolidated Fund of the State or to Public Funds, as the case may
be. Reference has also been made to the provisions of the Comptroller and
Auditor-General (Duties, Powers and Conditions of Service) Act, 1971 (for
short, the 'CAG Act') and the submission is that no provision under the
Notification shows that the account can be subjected to audit under the CAG
Act. The contention, in short, is that constitutionally it is not permissible
to any person or authority to hold funds collect on behalf of the Government.
This is basis for urging that the Notification dated 23rd April, 2004 is unconstitutional.
For
examining the nature of the fund sought to be regulated by CAMPA, brief
reference is necessary to be made to some of constitutional provisions.
Article
110 in so far as the Parliament is concerned and Article 199 in so far as the
State is concerned, while defining Money Bills make a deeming provision for
certain contingencies. Article 110(1)(f) and Article 199(1)(f) read as under:
"110.
Definition of "Money Bills".
(1)
For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if
it contains only provisions dealing with all or any of the following matters,
namely :-- (a) to (d) .
(f)
the receipt of money on account of the Consolidated Fund of India or the public
account of India or the custody or issue of such money or the audit of the
accounts of the Union or of a State; or XXX XXX XXX 199. definition of
"Money Bills".(1) For the purposes of this Chapter, a Bill shall be
deemed to be a Money Bill if it contains only provisions dealing with all or
any of the following matters, namely :
(a) to
(d) (f) the receipt of money on account of the Consolidated Fund of the State
or the public account of the State or the custody or issue of such money;
or" The contention is that Notification constituting CAMPA shall be deemed
to be a Money Bill.
Articles
294 and 295 deal with succession to property, assets, rights, liabilities and
obligations in certain cases as from the commencement of the Constitution of
India, providing for vesting of the properties and assets in the Union and in
the States. These articles were referred to contend that forest is the property
and asset of the State.
Article
266 deals with Consolidated Fund of India and of the States.
Article
283 deals with custody of the consolidated funds, contingency funds and the
moneys credited to the public accounts. Article 284 deals with other monies
received by public servants in courts and postulates the same shall be paid
into the public account of India or the public account of the State, as the
case may be.
Article
266(1) deals with all revenues received by the Government of India, all loans
raised by that Government by the issue of treasury bills, loans or ways and
means advances and all moneys received by that Government in repayment of loans
shall form one consolidated fund to be entitled "the Consolidated Fund of
India", and likewise the sum received by Government of State shall form
one consolidated fund to be entitled "the Consolidated Fund of the
State". Article 266(2) stipulates that all other public moneys received by
or on behalf of the Government of India or the Government of a State shall be
credited to the public account of India or the public account of the State, as
the case may be.
Third
category of receipt is in terms of Article 284 which is required to be paid
into the public account of India or the public account of the State, as the
case may be.
Chapter
III of CAG Act deals with duties and powers of the Comptroller and
Auditor-General. Section 10 thereof deals with compilation of accounts of Union
and the States by CAG. Under Section 11, the CAG is required to prepare and
submit accounts to the President, Governors of State and Administrators of
Union Territories having Legislative Assemblies. Under Section 12, CAG is
required to give information and render assistance to the Union Government and
the State Governments. Section 13 sets out general provisions relating to
audit.
Under
this provision, it shall be the duty of the CAG to audit all expenditure from
the Consolidated Fund of India and of each State and of each Union Territory
having a Legislative Assembly and to ascertain whether the moneys shown in the
accounts as having been disbursed were legally available for and applicable to
the service or purpose to which they have been applied or charged and whether
the expenditure conforms to the authority which governs it; to audit all
transactions of the Union and of the State relating to contingency funds and
public account; to audit all trading, manufacturing, profit and loss accounts
and balance sheet and other subsidiary accounts kept in any department of the
union or of a State; and in each case to report on the expenditure,
transactions or accounts so audited by him. Section 14 of CAG Act deals with
audit of receipts and expenditure of bodies and authorities substantially
financed from Union or State revenues. Section 15 provides for the functions of
CAG in the case of the grants or loans given to other authorities or bodies.
Section 16 deals with audit of receipts of Union or of States and Section 17
with audit of accounts of stores and stock. Section 18 provides for the powers
of CAG in connection with audit and accounts. The audit of Government companies
and corporations by CAG is dealt with under Section 19.
Section
20 is in the nature of a residuary provision providing that CAG, if requested
by the President of India or the Governor of the State or the Administrator of
Union of Territory having a Legislative Assembly to undertake the audit of the
accounts of such other body or authority of which audit has been entrusted to
CAG, the CAG shall undertake such audit. Chapter III shows the responsibility
of CAG to conduct audit in the manner provided in the law or on request made
for the audit in the manner provided under Section 20.
Relying
on aforesaid constitutional provisions and also of CAG Act, it was contended
that the notification constituting CAMPA is unconstitutional as it does not
stipulate that the amounts collected on behalf of Government shall go to the
relevant consolidation fund or to public fund. Further, no provision has been
made for audit under the CAT Act. To examine this contention, it is necessary
to determine the nature of Fund dealt with by CAMPA.
The
background under which the fund came to be created has already been noted.
Noticing fast depletion of forests, the fund was ordered to be utilized for
protection of forests and environments. The environments are not the State
property and are national asset. It is the obligation of all to conserve the
environments and for its utilization, it is necessary to have regard to the
principles of sustainable development and inter-generational equity.
Reverting
now specifically to forests, if it becomes necessary for economic development
to use the same for non-forest purpose, then before grant of permission for
diversion of forest land, there should be some scheme whereunder loss occurring
due to such diversion can be made up by adopting both short term measures as
well as long term measures one of it being a regeneration programme. Natural
regeneration is a long process. It requires huge amounts. It requires a policy
and direction. It requires proper use of funds for regeneration of depleted
forest and ecology. The natural resources like forests are in trust with the
present generation. In this light, various statutes noted above have been
enacted by the Parliament. Keeping in view the letter and spirit of those
statutes and constitutional provisions, the legality of CAMPA and the power to
issue directions for natural regeneration and utilization of funds is required
to be appreciated. The body set up or fund generated to protect ecology and
provide for regeneration cannot in constitutional scheme of things be
considered and treated as a fund under Article 266 or Article 283 or Article 284
of the Constitution of India. When seen in this light, neither Article 110 nor
Article 199 and/or Article 294 or 195 would have any application.
There
is an additional reason for the view that NPV will not fall under Article 110
or 199 or 195 of the Constitution. Our constitution draws a distinct line
between a "TAX" and a "FEE". In case of Ratilal Panachand
Gandhi v. State of Bombay & Ors. [1954 SCR 1055], one of the questions
which arose for determination was regarding constitutional validity of Section
58 of Bombay Public Trust Act, 1950. That section makes it obligatory on every
Public Trust to pay to the Administration Fund a contribution at such time and
in such manner as may be prescribed.
Under
the rules, the contribution was fixed at the rate of 2% per annum upon the
gross annual income of every Public Trust. Failure to pay such contribution was
made liable to penalty under Section 66 of the Act. It was contended on behalf
of the Trustees that the levy of contribution under Section 58 was in substance
the levy of a tax, it was beyond the competence of the State legislature to
enact such a provision. This argument was rejected by this Court by holding
that the Administration Fund constituted under Section 57 of Bombay Public
Trust Act was a Special Fund which was to be applied exclusively for payment of
charges for expenses incidental to the regulation of Public Trusts and in
carrying into effect the provisions of the Act. Under Section 57 Special Fund
vested in the Charity Commissioner. That Fund was set up from the charges
levied on various Trusts in the State. The Fund was to be managed by the
Charity Commissioner. All investments were to be made by the Charity
Commissioner. All disbursements were to be made by him in the manner prescribed
by the rules. The collections of these charges, deployed in the Special Fund,
were not merged in the general revenue, but these collections were earmarked
and set apart for the purposes of the Act. This Court further noticed that the
Charity Commissioner and the servants appointed under the Act drew their salary
from the Consolidated Fund of the State. However, this Court observed that
Section 57 was enacted to facilitate the Administration and not with a view to
mix up the Fund with the general revenue collected for government purposes.
Therefore, this Court held that Public Trusts Administration Fund was set up to
meet all expenses of the administration of Trust property within the scheme of
the Act and it is to meet such expenses that they levy was made and collections
were effected. Therefore, this Court held that such payments were levied for
rendering service which the State considers beneficial in public interest. In
the circumstances, it was held that Section 57 and Section 58 of the 1950 Act
were not ultra vires the State legislature because they did not levy a tax but
they levied a fee which came within Entry 47 of List III of Seventh Schedule to
the Constitution, which reads as under:
"47.
Fees in respect of any of the matters in this List, but not including fees
taken in any court." Thus reading Entry 47 with Entry 20 of the same List,
the imposition of NPV is a charge or a fee which falls within Entry 47 read
with Entry 20 of List III of Seventh Schedule to the Constitution. The Fund set
up is a part "of economic and social planning" which comes within
Entry 20 of List III and the charge which is levied for that purpose would come
under Entry 47 of List III and, therefore, Article 110 is not attracted.
To
sustain ecological, economic and social values, in so far as forests are
concerned, primarily, it is a question of Forest Management. In the
introduction chapter of Forest Management, Fourth Edition, co- authored by
Lawrence S. Davis, Professor Emeritus, University of California-Brakeley, K.
Norman Johnson, Orgeon State University, Peter S. Bettinger, Orgeon State
University and Theodore E. Howard, University of New Hampshire, authors have
said that "forest management remains the attempt to guide forests toward a
society's goals. A forest manager is the catalyst of this effort. As such, the
manager needs an earthy understanding of biological process; a knowledge of
animals and their habitats; an appreciation of streams and their environments;
the long- range viewpoint of a planner; the patience of a labour negotiator,
the skills of an administrator; and the alertness, flexibility and all-round
resourcefulness of a successful business executive. Above all, the forest
manager requires a genuine sense and feeling for the forest as an entity."
This objective is to be borne in mind while considering the question of ecology
as opposed to mere compensatory afforestation. Compensatory afforestation is
only a small portion in the long range efforts in the field of regeneration. It
has been said that recognizing the aforesaid uniqueness while applying the
principles of management is the heart of forest management.
Forest
Management planning involves a blend of ecological, economic and social systems
with the economic and social sides of planning often just as complex as the
ecological sides. Table 1.1 gives examples of decisions needed in the
management of forest as under :
"Table
1.1 Examples of decisions needed in the management of forests Type of decision
Example Extent and distribution of reserves Wilderness Management emphases for
areas where active management will occur Big game emphasis, high- intensity
timber production, scenic areas Types of activities allowed Timber harvest,
prescribed fire Aggregate harvest level over time Evenflow, nondeclining yield Silvicultural
system Even-aged, uneven-aged Age structure of forest Areas by 10-year age
classes Size and shape of treatment units Small units versus large units
Spatial pattern of treatment units Concentrated or dispersed cutting blocks
Protection strategy Wildfire suppression policy Vertical and horizontal
diversity/stand density Approach to partial cutting and prescribed burning
Regeneration harvest timing Rotation age (even-aged), cutting cycle
(uneven-aged) Regeneration method Clearcutting, clearcutting with leave trees, shelterwood,
selection, prescribed fire, natural disturbance." When permission is
granted by the Government of India to use the forest land for non-forest
purposes, it is not unconditional. Conditions are attached mainly with a view
to protect the environments and to make good the loss likely to occur by grant
of such permission. The payment into such a fund or imposition of conditions
are for the protection of natural resources. The Notification dated 23rd April,
2004 sets up a body to which payment is made so that the said body can carry
out the statutory and constitutional obligations. Since the amount does not go
to the accounts postulated by Article 283, the said provision shall have no
application.
Similarly,
the provisions of the CAG Act would also have no application. At the same time,
it may be noted that clause 6.3 stipulates the audit through Chartered
Accountants on the panel of CAG. In order to provide for financial discipline,
transparency and accountability, it would be appropriate to provide for
corporate accounting on the principles of double entry system. We are further
of the view that the accounts of the Fund shall be subjected to internal
Statutory Audit, the Statutory Auditors to be taken from the panel of CAG. The
internal audit shall be conducted every six months.
The
duty to preserve natural resources in pristine purity has been highlighted in
M.C. Mehta v. Kamal Nath & Ors. [(1997) 1 SCC 388].
After
considering the opinion of various renowned authors and decisions rendered by
other countries as well on environment and ecology, this Court held that the
notion that the public has a right to expect certain lands and natural areas to
retain their natural characteristics is finding its way into the law of the
land. The Court accepted the applicability of public trust doctrine and held
that it was founded on the ideas that certain common properties such as rivers,
sea-shore, forests and the air were held by the Government in trusteeship for
the free and unimpeded use of the general public. These natural resources have
a great importance to the people as a whole that it would wholly unjustified to
make them subject to private ownership. These resources being a gift of nature,
should be made freely available to everyone irrespective of the status in life.
The doctrine enjoins upon the Government to protect the resources for the
enjoyment of the general public rather than to permit their use for private
ownership or commercial purposes. It was held that our legal system based on English
common law includes the public trust doctrine as part of its jurisprudence.
The State is the trustee of all natural resources which are by nature meant for
public use and enjoyment. Public at large is the beneficiary of these
resources. The State as a trustee is under a legal duty to protect these
natural resources. Summing up the Court said :
"We
are fully aware that the issues presented in this case illustrate the classic
struggle between those members of the public who would preserve our rivers,
forests, parks and open lands in their pristine purity and those charged with
administrative responsibilities who, under the pressures of the changing needs
of an increasingly complex society, find it necessary to encroach to some
extent upon open lands heretofore considered inviolate to change. The
resolution of this conflict in any given case is for the legislature and not
the courts. If there is a law made by Parliament or the State Legislatures the
courts can serve as an instrument of determining legislative intent in the
exercise of its powers of judicial review under the Constitution. But in the
absence of any legislation, the executive acting under the doctrine of public
trust cannot abdicate the natural resources and convert them into private ownership,
or for commercial use. The aesthetic use and the pristine glory of the natural
resources, the environment and the ecosystems of our country cannot be
permitted to be eroded for private, commercial or any other use unless the
courts find it necessary, in good faith, for the public good and in public
interest to encroach upon the said resources." In view of above, we hold
that the natural resources are not ownership of any one State or individual,
public at large is its beneficiary and, therefore, the contention of Mr. Venugopal
that the amount of NPV shall be made over to the State Government cannot be
accepted.
The
Indian Forest Act was enacted to consolidate the law relating to forests, the
transit of forest-produce and the duty leviable on timber and other
forest-produce. The focus of this Act is on the proprietary rights.
Section
3 empowers the State Government to constitute any forest land or waste land
which is the property of the Government or over which the Government has
proprietary rights, or to the whole or any part of the forest produce of which
the Government is entitled in a reserved forest in the manner provided in the
Act. As provided in Section 5, no right can be acquired over the land in
respect whereof notification has been issued under Section 4. In the manner
provided in Section 11, the Forest Settlement Officer is empowered to acquire
the land. Section 20 provides for declaration of reserved forest. No right in
or over a reserved forest can be acquired, as provided in Section 23. Acts
prohibited in respect of forests have been incorporated in Section 25. Section
29 deals with declaration of protect forest and Section 30 empowers the State
Government to issue notification reserving trees etc. in a protected forest.
The
power of the State Government for protection of forest has been provided in
Section 35. The power to impose duty on timber and other forest produce is
contained in Section 39 of the Act.
From
the above, it can be seen that scheme of 1927 Act is a State management and regulation
of the forest. On the assumption that local communities were incapable of
scientific management of forest, the British Government introduced Forest
Policy and Management by setting up a forest department and enacting the Indian
Forest Act, 1878 which was amended from time to time. By passage of time, it
was found that the provisions of the said Act were not adequate and, thus, in
order to consolidate the law relating to forest, the transit of forest produce
and the duty leviable for timber and other forest produce, the Indian Forest
Act, 1927 was enacted. To further tighten the management and regulation, the FC
Act of 1980 was enacted. It became necessary for conservation of forest on
realizing that there has been large scale of deforestation which is causing
ecological imbalance leading to environmental deterioration. This led to
enactment of the FC Act providing for prohibition for use of forest land for
non-forest purpose by anyone including the State Government or other
authorities except with the prior approval of the Central Government.
This
legislature was enacted, as already noted, after Forest and Wildlife were taken out from the State list and placed
in the Concurrent list. At the same time, Article 48A was inserted in the
Constitution of India for protection and improvement of environments and
safeguarding forest and wildlife in the year 1977.
The
basis objectives leading to the laying down of the National Forest Policy, 1988
may also be noted and also the need and requirement for its enforcement. This
policy was framed on realizing that 1952 Forest Policy for the management of
State forest in the country had not halted the depletion of forests. It was,
therefore, considered necessary to evolve a fresh policy for future to lay down
new strategies of forest conservation which had become imperative. Conservation
includes preservation, maintenance, sustainable utilization, restoration and
enhancement of the natural environment. The principal aim of the forest policy
is to ensure environmental stability and maintenance of ecological balance
including atmospheric equilibrium which are vital for sustenance of all life
forms, human, animal and plant. The derivation of direct economic benefit must
be subordinated to this principal aim.
The
forest policy has a statutory flavour. The non-fulfillment of aforesaid
principle aim would be violative of Articles 14 and 21 of the Constitution. The
basic objectives of the Forest Policy, 1988 are:
"2.1
The basic objectives that should govern the National Forest Policy are the
following:
--
Maintenance of environmental stability through preservation and, where
necessary, restoration of the ecological balance that has been adversely
disturbed by serious depletion of the forests of the country.
--
Conserving the natural heritage of the country by preserving the remaining
natural forests with the vast variety of flora and fauna, which represent the
remarkable biological diversity and genetic resources of the country.
--
Checking soil erosion and denudation in the catchment areas of rivers, lakes
reservoirs in the interest of soil and water conservation, for mitigating
floods and droughts and for the retardation of silation of reservoirs.
--
Checking the extension of sand-dunes in the desert areas of Rajasthan and along
the coastal tracts.
--
Increasing substantially the forest/tree cover in the country through massive afforestation
and social forestry programmes, especially on all denuded, degraded and
unproductive lands.
--
Meeting the requirements of fuelwood, fodder, minor forest produce and small
timber of the rural and tribal populations.
--
Increasing the productivity of forests to meet essential national needs.
--
Encouraging efficient utilization of forest produce and maximum substitution of
wood.
--
Creating a massive people's movement with the involvement of women, for
achieving these objectives and to minimize pressure on existing forests.
2.2
The principal aim of Forest Policy must be to ensure environmental stability
and maintenance of ecological balance including atmospheric equilibrium which are
vital for sustenance of all life forms, human, animal and plant. The derivation
of direct economic benefit must be subordinated to this principal aim." It
has been recognized that one of the essentials for forest management is the
conservation of total biological diversity, the network of national parks,
sanctuaries, biosphere reserves and other protected areas to be strengthened
and extended adequately.
The
strategy under the Forest Policy is to have a minimum of one- third of the
total land area of the country under forest or tree-cover. In the hills and in
mountainous regions, the aim should be to maintain two-third of the area under
such cover in order to prevent erosion and land degradation and to ensure the
stability of the fragile ecosystem. Clause
4.3 lays
down the aspects of management of State forests. It would be instructive to
reproduce hereunder certain parts of the Policy with a view to have clarity of
the aim to be achieved.
"4.3.1.
Schemes and projects which interfere with forest that clothe steep slopes,
catchments of rivers, lakes, and reservoirs, geologically unstable terrain an d
such other ecologically sensitive areas should be severely restricted. Tropical
rain/moist forest, particularly in areas like Arunachal Pradesh, Kerala,
Andaman and Nicobar Islands should be totally safeguarded.
4.3.2.
No forest should be permitted to be worked without the Government having
approved the management plan, which should be in a prescribed format and in
keeping with the National Forest Policy. The Central Government should issue
necessary guidelines to the State Government in this regard and monitor
compliance.
XXX XXX
XXX 4.4.1. forest land or land with tree cover should not be treated merely as a
resource readily available to be utilized for various projects and programmes,
but as a national asset which requires to be properly safeguarded for providing
sustained benefits to the entire community.
Diversion
of forest land for any non-forest purpose should be subject to the most careful
examinations by specialists from the standpoint of social and environmental
costs and benefits.
Construction
of dams and reservoirs, mining and industrial development and expansion of
agriculture should be consistent with the needs for conservation of trees and
forests. Projects which involve such diversion should be least provide in their
investment budget, funds for regeneration/ compensatory afforestation.
4.4.2.
Beneficiaries who are allowed mining and quarrying in forest land and in land
covered by trees should be required to repair and re-vegetate the area in
accordance with established forestry practice. No mining lease should be
granted to any party, private or public, without a proper mine management plan
appraised from the environmental angle and enforced by adequate machinery.
XXX XXX
XXX
4.6
Having regard to the symbiotic relationship between the tribal people and
forests, a primary task of all agencies responsible for forest management,
including the forest development corporations should be to associate the tribal
people closely in the protection, regeneration and development of forests as
well as to provide gainful employment to people living in and around the
forest. While safeguarding the customary rights and interests of such people,
forestry programmes should pay special attention to the following -- One of the
major cause for degradation of forest is illegal cutting and removal by
contractors and their labour. In order to put an end to this practice,
contractors should be replaced by institutions such as tribal cooperatives, labour
cooperatives, government corporations, etc. as early as possible;
--
Protection, regeneration and optimum collection of minor forest produce along
with institutional arrangements for the marketing of such produce;
--
Development of forest villages on par with revenue villages;
--
Family-oriented schemes for improving the status of the tribal beneficiaries;
and, -- Undertaking integrated area development programmes to meet the needs of
the tribal economy in the around the forest areas, including the provision of
alternative sources of domestic energy on a subsidized basis, to reduce
pressure on the existing forest areas.
XXX XXX
XXX 4.8.1. Encroachment on forest lands has been on the increase. This trend
has to be arrested and effective action taken to prevent its continuance.
There
should be no regularization of existing encroachments.
XXX XXX
XXX 4.9. The main considerations governing the establishment of forest-based
industries and supply of raw material to them should be as follows :
-- As
far as possible, a forest-based industry should raise the raw material needed
for meeting its own requirements, preferably by establishment of direct
relationship between the factory and the individuals who can grow the raw
material by support the individuals with inputs including credit, constant
technical advice and finally harvesting and transport services.
-- No
forest-based enterprise, except that at the village or cottage level, should be
permitted in the future unless it has been first cleared after a careful
scrutiny with regard to assured availability of raw material. In any case, the
fuel, fodder and timber requirements of local population should not be
sacrificed for this purpose.
--
Forest-based industries must not only provide employment to local people on
priority but also involve them fully in raising trees and raw-material.
--
Natural forests serve as a gene pool resources and help to maintain ecological
balance. Such forests will not, therefore, be made available to industries for
undertaking plantation and for any other activities.
--
Framers, particularly small and marginal farmers would be encouraged to grow,
on marginal/degraded lands available with them, wood species required for
industries.
These
may also be grown along with fuel and fodder species on community lands not
required for pasture purposes, and by forest department/corporations on
degraded forests, not earmarked for natural regeneration.
-- The
practice of supply of forest produce to industry at concessional prices should
cease. Industry should be encouraged to use alternative law materials. Import
of wood and wood products should be liberalized.
-- The
above considerations will, however, be subject to the current policy relating
to land ceiling and land-laws.
XXX XXX
XXX 4.16. The objective of this revised Policy cannot be achieved without the
investment of financial and other resources on a substantial scale. Such
investment is indeed fully justified considering the contribution of forests in
maintaining essential ecological processes and life- support systems and in
preserving genetic diversity. Forest should not be looked upon as a source of
revenue. Forests are a renewable natural resource. They are a national asset to
be protected and enhanced for the well being of the people and the
Nation." It is clearly a constitutional imperative to preserve and enhance
forest cover as a natural gene pool reserve.
As
opposed to the above, the ground reality has been depletion of forest.
The
shift in the approach of the legislation is evident from the FC Act of 1980
when compared with the scheme underlying the Indian Forest Act, 1927 which was
State oriented for conserving the Forest Policy of 1952.
Further,
in 1977, Forest and Wildlife were taken out from the State list and
incorporated in Concurrent list. Considering compulsions of States and large
depletion of forest, these legislative measures have shifted the responsibility
from States to Centre. Moreover, any threat to the ecology can lead to
violation of right of enjoyment of healthy life guaranteed under Article 21
which is required to be protected. The Constitution of India enjoins upon this
Court a duty to protect environments.
The
aforesaid background has been given to demonstrate that the object of amount of
NPV is to utilize the fund to conserve the ecology without in any manner
affecting proprietary rights of the State Government over the land, timber or
the minerals. The Notification dated 23rd April, 2004 does not deprive any
State of any land timber or mineral and, therefore, there is no question of
disbursement of any amount to the State.
The
damage to environment is a damage to the country's assets as a whole. Ecology
knows no boundaries. It can have impact on the climate.
The
principles and parameters for valuation of the damage have to be evolved also
keeping in view the likely impact of activities on future generation.
We
have already noted that this matter came to be examined on Central Government
filing statement showing the dismal state of affairs of the forest in the
country. It is evident that despite the FC Act and the forest policy the
forests have been rapidly depleting. The forest policy recognizes this fact
and, in fact, was involved to check the menace of fast eroding of forest in the
country. Despite constitutional amendments made effective from the beginning of
1977 and despite various environmental laws enacted between 1974-1986 depletion
of forest has not halted.
The State
of Forest Report 1995 published by Forest Survey of India when compared with
the State of Forest Report 1997 also shows that there has been considerable
depletion of forest cover. It also shows the limited regeneration. A comparison
of the two reveals that total forest cover of the country decreased from
638,879 sq.km. to 633,397 sq.km., thus showing a net loss of 5,482 sq.km.
Further it reveals that there has been a net decrease of 17,777 sq.km. of dense
forest cover of the country while open forests and mangroves have increased by
12,001 sq.km. and 294 sq.km respectively. The redeeming feature, however, is an
improvement which can be seen from the State of Forest Report 2001. Learned
Amicus Curiae submits that improvement is a result of strict vigil on account
of various orders passed by this Court from time to time. It cannot be doubted
that it is necessary to continue the efforts for regeneration of forest.
It
would also be useful to make a mention of the order dated 22nd September, 2000
passed by this Court which led to grant of sanction of rupees 1,000 crores for
maintenance of forest under the 12th Finance Commission (2005-2010). The said
order took note of the fact that felling of the trees is far in excess of what
would be justified with reference to regeneration, and the main cause is
non-availability of sufficient funds. It also notices that even with regard to
the felling of trees as per working plans in the last three years, the
corresponding prescription for regeneration has not been implemented. It
further notices that there cannot be any felling without regeneration because
that will, over a period of time, only result in forest vanishing. Further, the
order says that the shortfall of regeneration which has resulted in depletion
of forest cover has to be made up. The court took note of the suggestion that
for regeneration there should be a joint venture between State of Madhya
Pradesh a State having a large forest area, and the Central Government whereby
the working capital, in whole or substantially the whole, can be provided by
the Central Government and the regeneration of degraded forests carried out.
Taking
an overall view, it is important for the nation that in certain areas where
natural forest exists, the same should be preserved and at the same time the
Central Government should consider whether the deficient States should not be
asked to contribute towards the preservation of the existing forest cover and
the compensation/incentive given to the forest rich States to preserve and regenerate
forests. In a sense, there should be a partnership of all the States to ensure
the maintenance and improvement of forest cover. It was observed that this
suggestion should be considered by a Committee of Secretary (MOF) and the
Secretary (MOEF) in consultation with the Chief Secretaries of all the States.
Para
14.25 of the 12th Finance Commission Report deals with maintenance of forest.
Noticing that several States have represented that subsequent to the
restrictions placed by this Court on exploitation of forest wealth, the forests
have become a net liability for the States rather than a source of revenue and
maintenance of forest has become a problem due to financial constraints, these
States pleaded that separate grant should be provided for maintenance of
forest. Recognising that forest are a national wealth and the country as a
whole has the responsibility in preserving the said national wealth, the
Commission decided to recommend a grant of rupees 1000 crores spread over the
award period 2005-2010 for maintenance of forest. This would be over and above
what the States have been spending through their forest departments. The amount
was distributed among the States based on their forest area, to be spent for
preservation of forest wealth. In this light, it is not open to the State
Government to contend that the amount of NPV paid by the user agency shall be
handed over to them.
Reference
may also be made to report of the Planning Commission (Chapter IX) relating to
forest environments in Tenth Five Year Plan (2002- 2007) which has taken note
of the fact that sustainability is not an option but imperative since without
it environmental deterioration and economic decline will be feeding each other
leading to poverty, pollution, poor health, political upheaval and unrest.
Environment cuts across all sectors of development. The rapid increase in green
house gases in the atmosphere, land degradation, deteriorating conditions of
fragile eco systems, deforestation, loss of biodiversity and environmental pollution
have become subjects of serious global concern. The overall impact of these
phenomena is likely to result in depletion of ozone layer, change of climate,
rise in sea-level loss of natural resources, reduction in their productivity
ultimately leading to an ecological crisis affecting livelihood options for
development and over all deterioration in quality of life.
From
the above report, it follows that the deterioration and consequently
preservation of eco-systems cannot be area or state specific and that utmost
attention is required to be accorded to conservation of natural resources and
for improvement of the status of our environments.
The
report notices the need to tackle the environmental degradation in a holistic
manner in order to ensure both economic and environmental sustainability.
Forests play an important role in environmental and economic sustainability. It
takes note of the forests being consistently and seriously undervalued in
economic and social terms. It recognizes that the economic value of the
eco-system services of the forests is vast though it is extremely difficult to
quantify. It takes note of the fact that generally much of the land-use
decision that presently drives forest change takes relatively little account of
these values. The country's forest resource is under tremendous pressure. Note
has been taken of the fact that India's biological diversity is reflected in
the heterogeneity of its forest cover. It is one of the 12 'mega-diversity'
countries of the world. India is also at the meeting zone of three major zone
of three major bio-geographic realms, namely, the Indo-Malayan (the richest in
the world), the Eurasian and Afro- tropical. India also has the two richest
bio-diversity areas, one in the northeast and the other in the Western Ghats.
The biological diversity is being conserved through a network of biosphere
reserves, national parks and sanctuaries, however, the challenges for
conservation emanate from population pressures, adverse impacts of
industrialization and intensifying threat from illegal trade.
The
importance of conserving and managing existing natural forest and forest soils,
which are very large stores of carbon, has been emphasized as it will
significantly reduce greenhouse gas emissions. To develop and protect forest, a
scientific management is necessary so as to enhance productivity, density and
health. Forestry projects have to lay emphasis on management and rejuvenation
of natural forests. The fragile eco-systems should be properly managed in order
to safeguard the livelihood of millions of people.
The
national development agenda must recognize the necessity of protecting the
long-term ecological security. The problem area is the growing population, high
degree of mechanism and steep rise in energy use which has led to activities
that directly or indirectly affect the sustainability of the environment.
It is
recognized that the sustainable use of bio-diversity is fundamental to
ecological sustainable. The loss of bio-diversity stems from destruction of the
habitat, extension of agriculture, filling up of wet lands, conversion of rich
bio-diversity sites for human settlement and industrial development,
destruction of coastal areas and uncontrolled commercial exploitation. It is
thus evident that the preservation of eco- systems, bio-diversity and
environment whether examined on common law principle or statutory principle or
constitutional principle eying from any angle it is clearly a national issue to
be tackled at the national level. All initiatives are required to seriously
pursue.
Dealing
with inter-generational justice, it has been rightly observed that posterity
shall not be treated like dirt. In an article published in 2003 Columbia
Journal of Environmental Law (28 Colum.J.Envtl.L.185), the author says that the
way in which a society cares or does not care for its dirt its land reflects
the degree to which it cares or does not care for its own long-term future.
We may
also briefly refer to Public Trust doctrine and its applicability to the matters
under consideration. The Public Trust Doctrine looks beyond the need of the
present generation and also suggests that certain resources are invested with a
special nature. It would be instructive to make a note of a story given in by
Timothy Patrick Brady in Boston College Environmental Affairs Law Review, Spring
1990 under the title 'But most of it belongs to those yet to be born'. The
story relates to digging of well at the time of drought. When a Frenchman told
villagers of a prudent African solution of digging well, many villagers agreed
but others argued that it will bring people from other villages and they would
bring their cattle and that would increase the pressure on the already precious
water. The Frenchman told the villagers that why not explain to them that the
well is only for your own village and they can dig their own. It was then said
that 'water is not only ours, but is gift of nature from God and must be
shared.' Ultimately, they concluded that it was wiser not to dig the well at all.
The moral of the story is that we are trustees of natural resources which
belong to all including future generation as well. The public trust doctrine
has to be used to protect the right of this as also future generation.
Having
regard to the above, amounts under CAMPA have to be used for regeneration of
eco-system and the same cannot be handed over to any State Government on the
premise that ecology is not property of any State but belongs to all being a
gift of nature for entire nation. The object of the FC Act and EP Act is
protection of environments. These Acts do not deal with any propriety rights of
anyone.
As
already stated the question as to what amount of NPV is required to be paid to
achieve these object is a matter to be gone into by the experts. However, the
amounts shall have to be updated from time to time after every three years. For
grant of approval under Section 2 of the FC Act besides payment of NPV as being
presently calculated by MOEF, the user agencies shall have to give undertakings
to pay the remaining amount, if any, pending finalization of determination by
the experts.
Turning
now to the grant of exemption to certain projects, learned Solicitor General
submitted that Government hospitals, dispensaries, non- commercial government ventures
like schools, rain water harvesting tanks, sever lines, village roads etc. are
the projects meant for public welfare and have no adverse impact on environment
as such and, therefore, these cases deserve to be granted exemption. Learned
Amicus Curiae has no objection to non-commercial and non-revenue earning
Government public welfare projects being treated differently and granted
exemption from the purview of the payment of NPV. Submission was also made by
learned counsel appearing for some of the parties that other projects like
irrigation, hydro electricity or other similar projects engaged in public
welfare and public utility activities too deserve to be similarly treated and
granted exemption. On behalf of the National Hydro Project Corporation Ltd.
(NHPC),
it was submitted that dams/hydro electric projects and other similar projects
are undertaken in public interest and these will also not create environmental
pollution and mere fact of these are revenue earning projects should not be
taken as a ground to treat them differently.
Reliance
has been placed on observations made in Hindustan Motors Ltd. & Anr. v. N.Siva
Kumar & Anr. [(2000) 10 SCC 664] to contend that such a project is not a
pollution industry. This decision is not relevant for determining the question
about levy and payment of NPV. The question is not only about these and
projects referred by the Solicitor General not creating pollution but is about
diversion of forest land for non-forest purpose, thereby depleting forest so as
to utilize land area in setting up these projects. A distinction has to be
maintained between a project set up for providing public utility but which is
revenue earning, the category to which the project of NHPC falls and the
government projects of the nature above referred like hospitals, schools etc., non-revenue
earning projects.
A
balance is required to be maintained in the development and protection of
environments. As already noted, the development has to be based on
sustainability. If NHPC uses the forest land for non forest purposes, the
payment of NPV is to protect the ecological and bio-diversity having regard to
the doctrines above referred. Generally speaking, projects like NHPC are
commercial ventures.
What
we have stated above is also applicable to submissions made on behalf of Grid
Corporation of Orissa (GRIDCO), State of Uttranchal and State of Madhya
Pradesh. We are
unable to accept the submission that wherever the government is the user agency
in notified forest area, protected forest/reserved forest etc., NPV should not
be charged. Such a submission cannot be accepted in the teeth of Section 2 of
the FC Act and other environmental laws noticed hereinbefore.
The
submission made on behalf of the Federation of Indian Mineral Industries about
calculation of NPV at the rate of 10 per cent for major mineral and 5 per cent
for minor mineral as already noted cannot be accepted. The question is not of
the value of the mineral or it being high value and low volume and mineral of
high volume and low value, the question is about use of the forest areas and
need to protect the environments in the manner above stated. A larger public
interest has to be the guiding principle and not the present interest of user
agency only.
We are
of the view that the question as to which class of projects deserve to be
exempted can first be examined by experts having regard to principles laid in
this judgment and in receipt of the report from them, this Court would further
examine the matter and issue appropriate directions.
However,
prima facie we feel that revenue earning projects do not deserve similar
treatment as non-revenue earning public welfare projects.
We are
clear that if let loose, the benefits achieved as indicated in the State Forest
Report of 2001 would be lost and we may be again where we were in 1990's or
1980's and earlier period during which there was immense depletion of forest
and insignificant regeneration.
The
work of regeneration and also of compulsory afforestation requires special,
specific and expert attention and we see no illegality in establishment of
Special Purpose Vehicle (SPV) in terms of clause 6.6 above quoted except that
for present till further orders it would be necessary to monitor the
establishment of SPV. Thus, in respect of clause
6.6 in
relation to establishment of SPV, we hold that before establishing SPV, its
format shall be filed in Court and SPV shall not be established without
permission of the Court. Further in our view the constitution of authority
(CAMPA) is necessary to fully and effectively implement recommendation dated 9th August, 2002 made by CEC for protection of
environment In view of the aforesaid discussion, our conclusions are:
1.
Except for government projects like hospitals, dispensaries and schools
referred to in the body of the judgment, all other projects shall be required
to pay NPV though final decision on this matter will be taken after receipt of
Expert Committee Report.
2. The
payment to CAMPA under notification dated 23rd April, 2004 is constitutional and valid.
3. The
amounts are required to be used for achieving ecological plans and for
protecting the environment and for the regeneration of forest and maintenance
of ecological balance and eco-systems. The payment of NPV is for protection of
environment and not in relation to any propriety rights.
4.
Fund has been created having regard to the principles of intergenerational
justice and to undertake short term and long-term measures.
5. The
NPV has to be worked out on economic principles.
In
view of the above, we issue following directions:
A. An
expert committee comprising of three experts including Ms.Kanchan to be
appointed within a period of one month by the Institution of Economic Growth
(North Campus).
B. The
committee of experts would examine the following issues:
(i) To
identify and define parameters (scientific, bio-metric and social) on the basis
of which each of the categories of values of forest land should be estimated.
(ii)
To formulate a practical methodology applicable to different bio-geographical
zones of India for estimation of the values in
monetary terms in respect of each of the above categories of forest values.
(iii)
To illustratively apply this methodology to obtain actual numerical values for
different forest types for each bio-geographical zone in the country.
(iv)
To determine on the basis of established principles of public finance, who
should pay the costs of restoration and/or compensation with respect to each
category of values of forests.
(v)
Which projects deserve to be exempted from Payment of NPV.
C. The
user agencies shall give undertakings for the further payment, if any, as may
be determined on receipt of report from the expert body.
D. The
Special Purpose Vehicle shall be established with the permission of the Court.
E. The
Institute shall send report of Committee of Experts within a period of four
months.
F. The
various clauses of CAMPA shall be suitably modified in terms of this judgment
within a period of one month.
List
after four months.
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