Tata Engineering and Locomotive Co versus State of Bihar

Tata Engineering and Locomotive Co versus State of Bihar
KRISHAN MAHAJAN

MAY 13: The Supreme Court will give an environment interpretation to business and trade law and thereby protect the public interest. It will do this by interpreting an Act on the basis of its preamble, by taking judicial notice of the nature of the industry and its impact on the environment as also by avoiding any technical approach that defeats the public interest in the environment. In a landmark judgment that imbibes the spirit of the Fundamental Duties of the Constitution, Justice Doraiswamy Raju sitting with Justice V N Khare, has laid down these new interpretation principles in the case of Tata Engineering and Locomotive Co Ltd vs The State of Bihar.

The question raised by the company was that its massive captive consumption of wood could not fall within the ambit of the Bihar Saw Mills (Regulation) Act. It admitted that its activity of manufacturing trucks and light vehicles required input of wood for articles like battery bases for chassis, gaggers for production of tool boxes, pallet platforms, staging platforms etc. It also admitted that for this purpose it had to purchase substantial quantities of wood for use in its own saw mills located inside its factory for manufacturing the various wooden components required for its main business of vehicle production. Hence it was not in the business of timber or wood per se but simply using the wood for its business of vehicle manufacture.

According to the company the Act needed to be interpreted in a narrow manner so as not to include all consumers of wood but only those whose main business was that of sale of wood or timber. It contended that this was clear from the provisions of the Act. Wood was defined to mean and include trees when they have fallen or have been felled. The company was not indulging in any tree cutting activity since it purchased its wood from registered dealers having valid licences. Sawing was defined in this context as cutting, converting, fashioning, seasoning or preservation and treatment of wood by manually operated or mechanically or electrically operated saws. The company was not in the business of sawing wood to sell the wood. Hence the company would not be covered by the provisions requiring the proper accounting of all sawn or unsawn wood through daily and monthly accounts, filing of returns on the basis of such accounting registers and the prohibition of carrying on any sawing operations after sunset or beforesunrise. The presumption that any stock of wood not accounted for satisfactorily would be taken to have been obtained unlawfully so as to make it liable to confiscation, could not apply to using wood as an input for manufacturing a product not fashioned out of wood. Consequently it could not be asked to take a licence under this Act.

Justice Raju in his judgment laid down that the preamble showed that the Act had to be read with some imagination of the purpose behind its enactment and not like a Euclid's theorem. The preamble stated that the provisions were made ``for regulating in this public interest the establishment and operation of saw mills and saw pits and trade of sawing for the protection and conservation of forests and the environment.'' His judgment took judicial notice of the fact that industries which are located in and around Jamshedpur consume huge volume of wood for commercial and industrial purposes and that those areas are surrounded by forests in the States of Bihar, Orissa and West Bengal. The judgment pointed out that this court has been proclaiming the need for strict regulation of wood based industries after identifying the proliferation of such industries as constituting the main cause of degradation of forests, resulting in serious threat to ecology and environment protection. Hence the words in the Act had to beread in the generic sense and not be restricted to the commercial sense or trade parlance.

Thus the words ``business of the saw mill or saw pit''had to be read in the light of the laudable objective of the Act of preventing and checking the indiscriminate felling of trees to stop deforestation. As a bulk consumer of wood with saw mills and saw pits in its factory it was necessary that TELCO should obtain a licence so that the Forest department could effectively keep a track of the company's purchases and utilisation of wood.

Unfortunately no argument was put forth and no reference made by the judges themselves to the duty of the Bihar government under the Supreme Court judgment of Ganesh Wood Industries vs. Himachal Pradesh, to first assess the needs of the wood consuming industries in the context of sustainable development of the forests in the State, before issuing licences. The enforcement of this duty would have shown the bona fides behind the legislation and prevented its wood accounting provisions from becoming a money spinner for the administrators of the Act. The Court lost an opportunity to integrate the empirical homework of sustainable development required of ruling politicians with a law carrying good labels but having no meaning without this homework.