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Full Case Details
“Divya Yog Mandir”, is a Trust, registered under
the Registration Act, 1908, and “Divya Pharmacy”, which is the sole petitioner
before this Court is a business undertaking of this Trust. The Pharmacy
manufactures Ayurvedic medicines and Nutraceutical products, at its
manufacturing unit at Haridwar, Uttarakhand.
- It is an admitted fact that “Biological Resources” constitute the main ingredient
and raw materials in the manufacture of Ayurvedic and Nutraceutical products.
Petitioner is aggrieved by the demand raised by Uttarakhand Biodiversity Board
(from hereinafter referred to as UBB), under the head “Fair and Equitable Benefit
Sharing” (FEBS), as provided under the Biological Diversity Act, 2002 (from
hereinafter referred to as the Act), and the 2014 Regulations framed therein. - Petitioner’s case is simple. UBB cannot raise a demand, under the Head of “Fair
and Equitable Benefit Sharing” (FEBS), as the Board neither has the powers nor
the jurisdiction to do that and, secondly, the petitioner in any case is not liable to
pay any amount or make any kind of contribution under the head of “FEBS”. This
argument of the petitioner is based on the interpretations of “certain provisions” of
the statute, which we may now refer. - The Biological Diversity Act, 2002 is a 2002 Act of the Parliament, with three
basic objectives: (A) Conservation of Biological Diversity. (B) Sustainable use of
its components. (C) Fair and equitable sharing of the benefits arising out of the use
of biological resources. - In this writ petition, we are presently only concerned with the third objective
which is fair and equitable benefit sharing (from hereinafter referred to as FEBS). - Under the Act, certain class of persons, cannot undertake an activity, related to
biodiversity in India, in any manner, without a “prior approval” of the National
Biodiversity Authority (from hereinafter referred to as NBA). The persons who
require prior approval from NBA are the persons defined in Section 3 of the
Biological Diversity Act, 2002 (from hereinafter referred to as the ‘Act’)… - A bare reading of the above provision makes it clear that prior approval of NBA
is mandatory for persons or entities who have some kind of a “foreign element”
attached to them. Either they are foreigners or even if they are citizens, they are
non-residents, and in case of a body corporate again a “non-Indian” element is
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attached to it. Persons having a foreign element have therefore been kept in a
distinct category. - Fair and equitable benefit sharing (FEBS) thus has not been precisely defined.
Its definition is based on reference to other provisions of the statute, where again it
is given by way of illustration in sub-section (2) of Section 21, where “payment of
monetary compensation” is one of the means of grant of this benefit. - Before NBA grants approval under Section 19 or under Section 20 of the Act,
it has to ensure that the terms and conditions for granting the approval are
such which secure equitable sharing of benefits arising out of the use of
“Biological Resources”. In other words, FEBS would only arise if an approval is
being taken under Section 19 and 20 of the Act, and in no other contingency. All
the same, both Sections 19 & 21, are the sections meant for only “foreign entities”,
who require approval from NBA in one form or the other. These provisions do not
apply in case of the petitioner which is purely an Indian Company. - Under Section 19 and 20 of the Act, a prior approval is required from NBA,
only by persons who have been defined under Section 3(2) of the Act. Such
persons are the ones who are not citizens of India, or though a citizen of India are
still non-resident Indian, and if it is a body corporate, association or organization,
it is not incorporated or registered in India, or if incorporated or registered in India
under any law for the time being in force, it has a non-Indian participation in its
share capital or management. To put it simply prior approval for NBA is only
required when there is a “foreign element” involved. - For an Indian entity such as the petitioner, the provision is given in Section
7 of the Act, which speaks of “prior intimation” to be given, that too not to NBA
but to the State Biodiversity Board (SBB)… - As the petitioner does not fall in any of the categories as defined under subsection (2) of Section 3, there is no question of a prior approval from NBA by the
petitioner, and logically therefore there is no question of any contribution under
FEBS, as a contribution under FEBS only comes from those who require a prior
approval from NBA. - The petitioner would also argue that the State Biodiversity Board (SBB) has no
power to impose FBES in respect of persons referred in Section 7 of the Act of
2002, i.e. in respect of “Indian entities”. Even NBA does not have the powers
under the Act, to delegate these powers to SBB, as the NBA itself is not authorised
to impose FEBS on an “Indian entity”. In short the petitioner would argue that
there is no provision in the Act where a contribution in the form of “fee”/monetary
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compensation, or a contribution in any manner is required to be given by an Indian
entity. FEBS is only for foreigners! The statute is clear about it. Sri Parthasarthy
would finally submit that the elementary principle of statutory interpretation is to
give plain meaning to the words used. Reliance is placed on a decision of the
Hon’ble Apex Court in the case of State of Jharkhand and another v. Govind
Singh reported in (2005) 10 SCC 437. Para 17 of the said judgment reads as under:
“17. Where, therefore, the “language” is clear, the intention of the legislature is to
be gathered from the language used. What is to be borne in mind is as to what has
been said in the statute as also what has not been said. A construction which
requires, for its support, addition or substitution of words or which results in
rejection of words, has to be avoided, unless it is covered by the rule of exception,
including that of necessity, which is not the case here.” - To the contrary, the learned counsel for the SBB Sri Ritwik Dutt would submit
that FEBS is one of the three major objectives sought to be achieved by the Act of
2002, and this has always to be seen as a continuation of the long history of
international conventions and treaties, which preceded the parliamentary
legislation. The Act and the Regulations framed therein are a result of our
international commitments. Reference here is to the Rio de Janeiro Convention
and Johannesburg Declaration, and most importantly Nagoya Protocol. The
learned counsel for the SBB would argue that there is no distinction between a
“foreign entity” and an “Indian entity”, as far as FEBS is concerned, and if a
distinction is made between a foreign entity and Indian entity in this respect, it
would defeat the very purpose of the Act, and would also be against the
international treaties and conventions to which India is a signatory. The learned
counsel would submit that whereas a foreign entity under Section 3 has to take
prior approval of NBA before venturing into this area, an Indian entity has to give
“prior intimation” to SBB before venturing into this area, under Section 7 of the
Act. The regulation and control, as far as Indian entity is concerned, is given to
SBB under the Act, and therefore it is the SBB which is the regulatory authority in
case of an Indian entity, such as the petitioner, and FEBS is being imposed by
SBB as one of its regulatory functions. - The functions of SBB are defined under Section 23 of the Act of 2002…
- The powers of SBB are given under Section 24 of the Act of 2002…
- Learned counsel would argue that under sub- section (a) of Section 23 of the
Act of 2002, powers are given to the SBB to advise the State Government in this
area of biodiversity, whereas in sub-section (b) of Section 23, the SBB has got
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powers to regulate the grant of approvals or otherwise to request for commercial
utilization or bio-survey and bio-utilisation of any biological resource by Indians.
The powers given under Sub-section (c) of Section 23 of the Act of 2002 are
general powers given to SBB to carry out the provisions of the Act or as may be
prescribed by the State Government. - Sub-section (b) of Section 23 has to be read with Section 7 of the Act of 2002
and reading of the two provisions together would mean that although an Indian
entity has only to give “prior information” (as against “prior approval” to NBA, in
case of a foreign entity), it does not mean that SBB has no control over an Indian
entity. Section 23 stipulates that SBB has powers to “regulate by granting of
approvals or otherwise requests for commercial utilization or bio-survey and bioutilisation of any biological resource by Indians”. Regulation by imposition of fee
is an accepted form of regulatory mechanism, the learned counsel for SBB would
argue. This has again to be seen with sub-section (2) of Section 24, where the
SBB, in consultation with the local bodies and after making such enquiries can
prohibit or restrict any such activity, if it is of opinion that such activity is
detrimental or contrary to the objectives of conservation and sustainable use of
biodiversity or equitable sharing of benefits arising out of such activity. - Learned counsel would then rely on Section 52A of the Act of 2002, which is a
provision for appeal before the National Green Tribunal, inter alia, against any
order passed by NBA or SBB regarding determination of benefit sharing. Learned
counsel would therefore emphasise that the very fact that an Appellate Authority
has been provided, inter alia, against any order which has been passed by the SBB
regarding FEBS, would imply that SBB has powers to impose FEBS. - Reliance has also been placed on Section 32 of the Act, which provides for
constitution of State Biodiversity Fund, where, inter alia, all sums received by the
State Biodiversity Board or such other sources have to be kept, hence a holistic
reading of the entire provisions of the Act, would show that SBB has got an
important role to play, particularly in the field of FEBS, the learned counsel for the
SBB would submit. - The Act ensures that funds are available with the SBB for protection and
regeneration of biological diversity, so that long term sustainability is ensured and
the indigenous and local communities get incentives for benefit of conservation
and use of biological resources. - The importance of FEBS has then been emphasised by the learned counsel for
SBB relying upon the preamble of the Act of 2002, (which refers to the Rio de
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Janeiro Convention of 1992), where “Fair and Equitable Benefit Sharing” is one of
the three important posts of the entire movement of conservation of biodiversity,
and one of the main purposes of the statute. - The learned counsel for the SBB would then argue that in the present context,
a simple and plain reading of the statutory provisions may not be correct. The
definition clause of the Act of 2002 starts with the words “In this Act, unless the
context otherwise requires”. The learned counsel would hence argue that the
definitions of different words and phrases given in Section 2 of the Act of 2002,
are the ones which have to be applied under normal circumstances, but when
the application of the definition looses its purpose, the context requires a different
examination. - Thereafter the learned counsel for the SBB emphasised the importance of
International Conventions in construing domestic legislations, apart from the Rio
de Janeiro Convention and Johannesburg Declaration, and particular emphasis was
given to Nagoya Protocol of 2010 for the reason that in the Nagoya Protocol, the
entire emphasis was on “fair and equitable benefit sharing” and the importance of
indigenous and local communities in this regard. - In short, in the concept of FEBS, no distinction is made between a foreign
entity and an the Indian entity, and the only distinction which the Act makes
within Indian entities is in proviso to Section 7 of the Act of 2002 where an
exception has been created for local people and communities in that area,
including growers and cultivators of biodiversity, and vaids and hakims, who have
been practicing indigenous medicine. - The above stand taken by the SBB is adopted by the remaining respondents
such as Union of India and the State of Uttarakhand. - Having heard the rival submissions, it is clear that at the heart of the dispute
here is the interpretation of what constitutes “fair and equitable benefit sharing”,
and whether this liability can be fastened on an Indian, or an Indian company. - The petitioner is an Indian company, without any element of foreign
participation, either in its share capital or management, and therefore has
challenged the imposition of an amount by the SBB, under the head of “fair and
equitable benefit sharing”, precisely on the ground that an Indian entity cannot be
subjected to this burden. The entire argument of the petitioner rests on a textual
and legalistic interpretation, particularly of the term “Fair and Equitable Benefit
Sharing”.
302 - In the first blush it seems only obvious that the law here does not subject an
Indian entity to FEBS. But what seems obvious, may not always be correct.
The definition of FEBS in the statute and its implementation - The entire case of the petitioner, as placed by its learned counsel Sri
Parthasarthy, moves on the definition clause of “Fair and Equitable Benefit
Sharing” and based on that he would argue that “Fair and Equitable Benefit
Sharing” would not involve an Indian entity. - The question is whether the context here requires a plain and textual
interpretation. It is true that in normal circumstances, a definition has to be
interpreted as it is given in the definition clause, but Section 2 of the Act, which
defines various expressions in the Act opens with some important words, which
are, “unless the context otherwise requires”. Meaning thereby that it is not
mandatory that one should always mechanically attribute an expression as
assigned in the definition clause. Yes, ordinarily this must be done, but when such
an interpretation results in an absurdity, or where it defeats the very purpose of the
Act, then it becomes the duty of the Court to assign a “proper meaning” to the
words or the phrase, as the case might be. It is for the reason that the Legislature,
for abundant precaution, by and large in all statues, start the definition clause with
the words “unless the context otherwise requires”, or such similar expressions. - G.P. Singh in his Classic, Principles of Statutory Interpretations* explains this
aspect as follows:
“…where the context makes the definition given in the interpretation clause
inapplicable, a defined work when used in the body of the statute may have to be
given a meaning different from that contained in the interpretation clause; all
definitions given in an interpretation clause are therefore normally enacted subject
to the qualification – ‘unless there is anything repugnant in the subject or context,
or ‘unless the context otherwise requires’.” - But then before a different meaning is given to a definition, reason must be
given as to why it is being done. It is also true that in a case where the application
of a definition as given in the definition clause makes the provision unworkable or
otiose, it must be so stated, that the definition is not applicable because of the
contrary context.** * 12th Edition, page 191 ** Justice G.P. Singh: Principles of
Statutory Interpretation, 12th Edition, page 192 - The frequently cited case in this regard is Venguard Fire and General
Insurance Co. Ltd., Madras v. Fraser & Ross, AIR 1960 SC 971. In the said case,
the Hon’ble Apex Court, explained this position as under:
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“It is well settled that all statutory definitions or abbreviations must be read subject
to the qualification variously expressed in the definition clauses which created
them and it may be that even where the definition is exhaustive inasmuch as the
word defined is said to mean a certain thing, It is possible for the word to have a
somewhat different meaning in different sections of the Act depending upon the
subject or context. That is why all definitions in statues generally being with the
qualifying words, similar to the words used in the present case, namely, ‘unless
there is anything repugnant in the subject or context’. Therefore, in finding out of
the meaning of the word, “Insurer” in various sections of the Act (Insurance Act,
1938) the meaning to be ordinarily given to it is that given in the definition clause.
But this is not inflexible and there may be sections in the Act where the meaning
may have to be departed from on account of the subject or context in which the
word had been used and that will be giving effect to the opening sentence in the
definition section, namely ‘unless there is anything repugnant in the subject or
context’. In view of this qualification, the Court has not only to look at the words
but also to look at the context, the collocation and the object of such words
relating to such matter and interpret the meaning intended to be conveyed by the
use of the words under the circumstances.”
What is fair and equitable benefit sharing and the importance of
international treaties? - Indigenous and local communities, who either grow “biological resources”, or
have a traditional knowledge of these resources, are the beneficiaries under the
Act. In return for their parting with this traditional knowledge, certain benefits
accrue to them as FEBS, and this is what FEBS is actually all about. - This benefit the “indigenous and local communities”, get under the law is over
and above the market price of their “biological resources”. - But to fully appreciate the concept of FEBS, we may have to go back to the
legislative history behind the enactment and the long struggle, by and on behalf of
the local and indigenous communities. - At this juncture, it may also be worthwhile to mention that India is a country
which is extremely rich in biodiversity. It is one of the top 17 megadiverse
countries of the world.1 Megadiverse, as the word suggests, would mean “having
great diversity”, and a megadiverse country must have atleast 5000 species of
endemic plants and must border marine ecosystem2. Significantly, apart from
USA, Australia and China, which are in the list of 17 top megadiverse countries of
the world, due to their size alone, the remaining countries in this pool, are the
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developing countries, such as India, Colombia, Ecuador, etc. It is the developing
world which has raised a long struggle in conserving its biological resources, and
to save it from exploitation and extinction. - The effort of the world community for a sustainable biodiversity system goes
back to the United Nations conference on human environment, which is better
known as Stockholm conference of 1972. It was the first United Nations
conference, which focused on international environment issues. The Stockholm
manifesto recognised that earth’s resources are finite and there is an urgent need to
safeguard these resources. - Twenty years later in 1992 due to the combined efforts of the developing
nations, United Nation Convention of Rio de Janeiro was signed, of which India is
a signatory. The preamble of the convention recognised and declared the
importance of biological diversity for evolution and the need for its conversation.
It also raised concern and cautioned the world, that biological diversity is being
reduced significantly by unchecked human activities. The Preamble also
recognises “the close and traditional dependence of many indigenous and local
communities embodying traditional lifestyles on biological resources, and the
desirability of sharing equitably benefits arising from the use of traditional
knowledge, innovations and practices relevant to the conservation of biological
diversity and the sustainable use of its components.” - The first Article of the Rio de Janeiro Convention declares its objectives as
follows: “The objectives of this Convention, to be pursued in accordance with its
relevant provisions, are the conservation of biological diversity, the sustainable
use of its components and the fair and equitable sharing of the benefits arising out
of the utilization of genetic resources, including by appropriate access to genetic
resources and by appropriate transfer of relevant technologies, taking into account
all rights over those resources and to technologies, and by appropriate finding.” - Ten years later, in 2002, the world community again took stock of the
movement, this time at Johannesburg, South Africa. The conference resulted in an
important declaration known as “Johannesburg Declaration on Sustainable
Development, 2002″. The Johannesburg Declaration reasserts the challenges it
faces in the world regarding conservation of biodiversity.
What is important for us is that at Johannesburg the vital role of indigenous people
in the field of sustainable development was reasserted. It also recognized that
sustainable development requires a long-term perspective and broad-based
participation in policy formulation, decision-making and implementation at all
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levels. Though technically Johannesburg declaration may not be a treaty, yet it is
an important milestone in this movement. - The same year i.e. in 2002 our Parliament, in recognition of its international
commitments, enacted the Biological Diversity Act, 2002, which was published in
the Gazette of India on 01.10.2003. The Preamble of the Act shows the purpose of
bringing the legislation in India… - At this juncture, we must emphasize the importance of international treaties
and conventions on municipal laws. The Constitution of India emphasizes this
aspect. Article 51 (c) of the Constitution states as under:-
“51. Promotion of international peace and security:- The State shall endeavour to
(c) foster respect for international law and treaty obligations in the dealings of
organised peoples with one another;” - The Hon’ble Apex Court in the case of T.N. Godavarman v. Union of
India (2002) 10 SCC 606 has emphasised the importance of international
conventions and treaties as under:
“Duty is cast upon the Government under Article 21 of the Constitution of India to
protect the environment and the two salutary principles which govern the law of
environment are : (i) the principles of sustainable development, and (ii) the
precautionary principle. It needs to be highlighted that the Convention on
Biological Diversity has been acceded to by our country and, therefore, it has to
implement the same. As was observed by this Court in Vishaka v. State of
Rajasthan in the absence of any inconsistency between the domestic law and the
international conventions, the rule of judicial construction is that regard must be
had to international conventions and norms even in construing the domestic law.” - In a recent judgment in the case of Commr. Of Customs v. G.M.
Exports reported in (2016) 1 SCC 91, the Hon’ble Apex Court sums up this aspect
in para 23 of its judgment, which reads as under:-
“23. A conspectus of the aforesaid authorities would lead to the following
conclusions:
(1) Article 51(c) of the Constitution of India is a Directive Principle of State
Policy which states that the State shall endeavour to foster respect for international
law and treaty obligations. As a result, rules of international law which are not
contrary to domestic law are followed by the courts in this country. This is a
situation in which there is an international treaty to which India is not a signatory
or general rules of international law are made applicable. It is in this situation that
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if there happens to be a conflict between domestic law and international law,
domestic law will prevail.
(2) In a situation where India is a signatory nation to an international treaty, and a
statute is passed pursuant to the said treaty, it is a legitimate aid to the construction
of the provisions of such statute that are vague or ambiguous to have recourse to
the terms of the treaty to resolve such ambiguity in favour of a meaning that is
consistent with the provisions of the treaty.
(3) In a situation where India is a signatory nation to an international treaty, and a
statute is made in furtherance of such treaty, a purposive rather than a narrow
literal construction of such statute is preferred. The interpretation of such a statute
should be construed on broad principles of general acceptance rather than earlier
domestic precedents, being intended to carry out treaty obligations, and not to be
inconsistent with them.
(4) In a situation in which India is a signatory nation to an international treaty, and
a statute is made to enforce a treaty obligation, and if there be any difference
between the language of such statute and a corresponding provision of the treaty,
the statutory language should be construed in the same sense as that of the treaty.
This is for the reason that in such cases what is sought to be achieved by the
international treaty is a uniform international code of law which is to be applied by
the courts of all the signatory nations in a manner that leads to the same result in
all the signatory nations.
It is in the light of these principles that we must now examine the statute in
question.” - In the light of the above, we have to understand the importance of the 2002
Act as it is a result of our international commitments. - India is a party to the United Nations Convention on Biological Diversity signed
at Rio on 5th of June 1992. Being a signatory to the International treaty, India was
under an obligation to give effect to the provisions of the treaty. Article 8 of the Rio
Convention is regarding IN-SITU Conservation. Article 8 (j) and (k) are relevant for
our purposes here. It reads as follows:
“Article 8. IN-SITU CONSERVATION Each Contracting Party shall, as far as
possible and as appropriate: (j) Subject to its national legislation, respect, preserve
and maintain knowledge, innovations and practices of indigenous and local
communities embodying traditional lifestyles relevant for the conservation and
sustainable use of biological diversity and promote their wider application with the
approval and involvement of the holders of such knowledge, innovations and
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practices and encourage the equitable sharing of the benefits arising from the
utilization of such knowledge, innovations and practices.
(k) Develop or maintain necessary legislation and/or other regulatory provisions
for the protection of threatened species and populations.” - Further Article 15 of the Rio Convention relates to – Access to Genetic Resources.
Clause (1) & (7) of the above Article, read as under:- “Article 15. Access to Genetic
Resources - Recognizing the sovereign rights of the States over their natural resources, the
authority to determine access to genetic resources rests with the national
governments and is subject to national legislation. - Each Contracting Party shall take legislative, administrative or policy measures,
as appropriate, and in accordance with Articles 16 and 19 and, where necessary,
through the financial mechanism established by Articles 20 and 21 with the aim of
sharing in a fair and equitable way the results of research and development and the
benefits arising from the commercial and other utilization of genetic resources
with the Contracting Party providing such resources. Such sharing shall be upon
mutually agreed terms.” - Being a signatory to the Rio Convention, India was committed to bring
appropriate legislation in the country in order to give effect to the provisions of the
treaty. It was in this background and on these international commitments that the
Parliament enacted the Biological Diversity Act in 2002. - Another important international convention must be referred here, which is
Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable
Sharing of Benefits arising from their Utilization to the Convention on Biological
Diversity. The Nagoya Protocol of 2010 is a supplementary agreement to the 1992
Rio de Janeiro Convention on Biological Diversity. - It must be stated, even at the cost of repetition, that the conservation of
biological diversity has three main pillars or objectives. The first is the
conservation of biological diversity, the second is sustainable use of its
components and the third is fair and equitable sharing of the benefits arising out of
utilisation of genetic resources. Nagoya Protocol of 2010 focuses on the third
component (with which we are presently concerned), which is fair and equitable
sharing of genetic material, including the traditional knowledge associated with
the genetic resources and the benefits arising out from their use. - The preamble of Nagoya Protocol, inter alia, recognised the “importance of
promoting equity and fairness in negotiations and mutually agreed terms between
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providers and users of genetic resources”. It also recognised “the vital role that
women play in access and benefit-sharing and affirming the need for the full
participation of women at all levels of policy-making and implementation for
biodiversity conservation.” Article 5 of the Nagoya Protocol describes “fair and
equitable benefit- sharing”… - Who are to be the beneficiaries of this FEBS? The protocol here speaks of the
“local and indigenous communities”. They are the ones that need this protection
and they are the ones who were at the centre of concern at Nagoya. - Article 7 of the Nagoya Convention reads as under…
- Article 12 of the Nagoya Protocol reads as under…
- Article 15 of the Nagoya Protocol reads as under…
- Article 16 of the Convention reads as under…
- In the above background of our international commitments, we find that as
the Biological Diversity Act, 2002 is a follow up to the Rio Convention of 1992,
similarly, the Regulations of 2014, is a consequence of the Nagoya Protocol. By
the Regulations, the commitments at Nagoya are being enforced. In fact the
Preamble of the 2014 Regulations* mentions that the Regulations are in pursuance
of the Nagoya Protocol. - The concept of FEBS, as we have seen, is focused on the benefits for the “local
and indigenous communities”, and the Nagoya Protocol makes no distinction
between a foreign entity and an Indian entity, as regards their obligation towards
local and indigenous communities in this regard. Consequently the “ambiguities”
in the national statute have to be seen in the light of the International treaties i.e.
Rio and Nagoya and a purposive rather than a narrow or literal interpretation has
to be made, if we have to arrive at the true meaning of FEBS. In our case
the Biological Diversity Act, 2002 has been enacted not merely in furtherance of
an International treaty but it is rather to enforce a treaty obligation and therefore in
case there is any difference between the language of a municipal * Guidelines on
Access to Biological Resources and Associated Knowledge and Benefits Sharing
Regulations, 2014.
Law and corresponding provision of the treaty, “the statutory language should be
construed in the same sense as that of the treaty”. This is what has been held by the
Hon’ble Apex Court in Commr. Of Customs v. G.M. Exports.1 - After going through the entire history of this movement, which is a movement
towards the conservation of biological diversity, one gets a sense that the main
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force behind this movement which resulted in the international conventions and
finally the municipal legislations, is the protection which the developing countries
required from the advanced countries in this particular field. All the same, the
rights of “indigenous and local communities” were extremely important and
emphatically declared in the Nagoya Protocol. These rights have to be protected,
equally from outside as well as from within. - The focus of the Nagoya Protocol is on FEBS, and protection of indigenous
and local communities, and the effort is that the indigenous and local communities
must get their fair and equitable share of parting with their traditional knowledge
and resources. India being a signatory to the Rio and the Nagoya Protocol, is
bound to fulfill its international commitments and make implementation of FEBS
effective and strong. - Having said this, however if we make a plain reading of the provisions, and
take a very conservative and textual approach to the interpretation of the relevant
statutory provisions, we would find that the Act does make a distinction between a
“foreign entity” and a “domestic entity”, as far as FEBS is concerned, particularly
when we read the definition of FEBS. But will that be the correct approach! - A simple textual interpretation as submitted by the petitioner would indeed
show that the petitioner which is not a foreign entity is not liable to contribute to
FEBS and the powers to impose FEBS lie only with the NBA. - But then a plain and textual interpretation here defeats the very purpose, for
which the law was enacted! The Purposive Interpretation - The entire controversy before this Court, ultimately revolves around the
interpretation of certain provisions of Biological Diversity Act, 2002, such as what
constitutes “Fair and Equitable Benefit Sharing”, and whether such a demand can
be made by the State Biodiversity Board, or such powers can be delegated by the
National Biodiversity Authority. Over the years, the Courts have been relying on a
theory of “interpretation”, which is now well known as the “purposive
interpretation of law”. The Hon’ble Apex Court has applied the theory of the
“purposive interpretation” not only in its interpretation of the Constitution, but also
in its interpretation of ordinary statutes. - It is true that in the above case, the principle of purposive interpretation of law
were applied while interpreting constitutional provisions, but it must be stated that
the principle of purposive interpretation are equally applicable while interpreting
ordinary statutes. In fact, principle of purposive interpretation is applicable not
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only in interpreting the Constitution and the statutes, but also in the interpretation
of a will or a contract. - It would be important to note that the purposive interpretation of law becomes
particularly relevant when the legislation, which requires interpretation, is a
socially or economically beneficial legislation. Here in the case at hand, it is clear
that behind the very concept of FEBS lies the concern of the legislatures for the
“local and indigenous communities”. FEBS in the form of a “fee” or by any other
means is a benefit given to the indigenous and local communities by the Act, and
the Regulations, which again have to be examined in the light of the international
treaties where the importance of FEBS has been explained. - The imposition of FEBS for the local and indigenous communities can also be
appreciated by way of an illustration. In Uttarakhand, in fact in the entire Central
Himalayan region, there is a “herb” or “biological resource”, found in the high
mountains, called “Yarsagumba”. Its local name is “Keera Jadi”, which is said to
be an effective remedy for various ailments. It is also known as the “Himalayan
Viagra”. - The local and the indigenous communities in Uttarakhand, who reside in the
high Himalayas and are mainly tribals, are the traditional “pickers” of this
biological resource. Through ages, this knowledge is preserved and passed on to
the next generation. The knowledge as to when, and in which season to find the
herb, its character, the distinct qualities, the smell, the colour, are all part of this
traditional knowledge. This knowledge, may not strictly qualify as an intellectual
property right of these communities, but nevertheless is a “property right”, now
recognised for the first time by the 2002 Act, as FEBS. Can it be said that the
Parliament on the one hand recognised this valuable right of the local
communities, but will still fail to protect it from an “Indian entity”. Could this ever
be the purpose of the legislature? “Biological resources” are definitely the property
of a nation where they are geographically located, but these are also the property,
in a manner of speaking, of the indigenous and local communities who have
conserved it through centuries. - In the light of what we have discussed above, we shall now examine and
finally determine whether in view of the above provisions of law, the State
Biodiversity Board (i.e. SBB) has got power to impose “Fair and Equitable Benefit
Sharing (FEBS)” in respect of persons who have got no foreign element attached
to them, such as the petitioner, and whether the National Biodiversity Authority
(i.e. NBA) has got powers to delegate to SBB power to impose FEBS to persons
who are covered by Section 7 of the Act.
311 - As the power to impose FEBS has been given to the SBB by the Regulations
framed by the NBA i.e. 2014 Regulations, which is presently under challenge, let
us refer to the relevant provisions of the Act and the Regulations. - The NBA has got powers to frame Regulations under Section 64 of the Act of
- Section 64 of the Act of 2002 reads as under:
“64. Power to make regulations. – The National Biodiversity Authority shall, with
the previous approval of the Central Government by notification in the Official
Gazette, are regulations for carrying out the purposes of this Act.” - This provision is again to be read along with sub-section (1) of Section 18,
which is reproduced below:
“18. Functions and powers of National Biodiversity Authority. – (1) It shall be the
duty of the National Biodiversity Authority to regulate activities referred to
in sections 3, 4 and 6 and by regulations issue guidelines for access to biological
resources and for fair and equitable benefit sharing.” - Under sub-section (2) of Section 21, the benefit sharing can be given effect to
in all or any of the manner provided therein, such as, grant of joint ownership of
intellectual property rights, “transfer of technology”, etc. where “payment of
monetary compensation and other non-monetary benefits of the benefit claimers as
the National Biodiversity Authority may deem fit” is one of the manners in which
benefit sharing can be determined. Further for this, under sub-section (4), the NBA
has power to make regulation… - Primarily what has been challenged is Regulation 2, 3 & 4 of the 2014
Regulations, which read as under:
“2.Procedure for access to biological resources, for commercial utilization or for
bio-survey and bio-utilization for commercial utilization. – (1) Any person who
intends to have access to biological resources including access to biological
resources harvested by Joint Forest Management Committee (JFMC)/Forest
dweller/ Tribal cultivator/ Gram Sabha, shall apply to the NBA in Form-I of the
Biological Diversity Rules, 2004 or to the State Biodiversity Board (SBB), in such
form as may be prescribed by the SBB, as the case may be, along with Form ‘A’
annexed to these regulations.
(2) The NBA or the SBB, as the case may be, shall, on being satisfied with the
application under sub-regulation (1), enter into a benefit sharing agreement with
the applicant which shall be deemed as grant of approval for access to biological
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resources, for commercial utilization or for bio-survey and bio-utilization for
commercial utilization referred to in that sub-regulation - Mode of benefit sharing for access to biological resources, for commercial
utilization or for bio-survey and bioutilization for commercial utilization.– (1) Where the applicant/ trader/
manufacturer has not entered into any prior benefit sharing negotiation with
persons such as the Joint Forest Management Committee (JFMC)/ Forest dweller/
Tribal cultivator/ Gram Sabha, and purchases any biological resources
directly from these persons, the benefit sharing obligations on the trader shall be in
the range of 1.0 to 3.0% of the purchase price of the biological resources and the
benefit sharing obligations on the manufacturer shall be in the range of 3.0 to 5.0%
of the purchase price of the biological resources:
Provided that where the trader sells the biological resource purchased by him to
another trader or manufacturer, the benefit sharing obligation on the buyer, if he is
a trader, shall range between 1.0 to 3.0% of the purchase price and between 3.0 to
5.0%, if he is a manufacturer: Provided further that where a buyer submits proof of
benefit sharing by the immediate seller in the supply chain, the benefit sharing
obligation on the buyer shall be applicable only on that portion of the purchase
price for which the benefit has not been shared in the supply chain.
(2) Where the applicant/ trader/ manufacturer has entered into any prior benefit
sharing negotiation with persons such as the Joint Forest Management Committee
(JFMC)/ Forest dweller/ Tribal cultivator/ Gram Sabha, and purchases any
biological resources directly from these persons, the benefit sharing obligations on
the applicant shall be not less than 3.0% of the purchase price of the biological
resources in case the buyer is a trader and not less than 5.0% in case the buyer is a
manufacturer:
(3) In cases of biological resources having high economic value such as
sandalwood, red sanders, etc. and their derivatives, the benefit sharing may
include an upfront payment of not less than 5.0%, on the proceeds of the auction
or sale amount, as decided by the NBA or SBB, as the case may be, and the
successful bidder or the purchaser shall pay the amount to the designated fund,
before accessing the biological resource.” - Option of benefit sharing on sale price of the biological resources accessed for
commercial utilization under regulation
2.– When the biological resources are accessed for commercial utilization or the
bio- survey and bio-utilization leads to commercial utilization, the applicant shall
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have the option to pay the benefit sharing ranging from 0.1 to 0.5 % at the
following graded percentages of the annual gross ex-factory sale of the product
which shall be worked out based on the annual gross ex-factory sale minus
government taxes as given below:-
Annual Gross ex-factory sale of product Benefit Sharing Component
Up to Rupees 1,00,00,000 0.1%
Rupees 1,00,00,001 up to 3,00,00,000 0.2%
Above Rupees 3,00,00,000 0.5%
- The above provisions in the Regulations, provide for a benefit sharing
obligation, for any person, who wants to have access to “biological resources”,
which is a certain percentage of the purchase price. The petitioner which is an
Indian entity is also obliged to pay an amount as FEBS to the SBB. Therefore the
challenge to Regulations 3, 4 & 5. - As per Section 7 of the Act of 2002, no person, who is a citizen of India or a
body corporate, association or organization which is registered in India, can obtain
any biological resources for commercial utilization, etc. without giving a prior
intimation to the SBB concerned. Only local communities, vaids and hakims are
exempted from this provision. - Thereafter sub-section (b) of Section 23 of the 2002 Act is relevant for our
purposes, which reads as under:
“23. Functions of State Biodiversity Board. – The functions of the State
Biodiversity Board shall be to –
(a)….
(b) regulate by granting of approvals or otherwise requests for commercial
utilization or bio-survey and bio-utilisation of any biological resource by Indians.” - At this juncture, it must be stated that regulating an activity in form of
demand of a fee is an accepted practice recognised in law. Therefore, in case the
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SBB as a regulator, demands a fee in the form of FEBS from the petitioner when
the petitioner is admittedly using the biological resources for commercial
purposes, it cannot be said that it has no powers to do so. As far as vesting of this
power through a Regulation by NBA is concerned, we must take resort to Section
21(2) (f) and sub-section (4) of Section 21, already referred above. Under subsection (2) of Section 21, NBA, has powers, subject to any regulation, to
“determine the benefit sharing”. - What is Fair and Equitable Benefit Sharing cannot be looked through the
narrow confines of the definition clause alone. The concept of FEBS has to be
appreciated from the broad parameters of the scheme of the Act and the long
history of the movement for conservation, together with our international
commitments in the form of international treaties to which India is a signatory.
Once we do that, we find that Under Section 2(f) and sub-section (4) of Section
21, the NBA has got powers to frame regulations in order to give payment of
monetary compensation and other non- monetary benefits to the benefit claimers
as the National Biodiversity Authority may deem fit, in form of Regulations and
the State Biodiversity Board in turn has powers and duties to collect FEBS under
the regulatory power it has under Section 7 read with Section 23 (b) of the Act. - In view of the above, this Court is of the opinion that SBB has got powers to
demand Fair and Equitable Benefit Sharing from the petitioner, in view of its
statutory function given under Section 7 read with Section 23 of the Act and the
NBA has got powers to frame necessary regulations in view of Section 21 of the
Act. The challenge of the petitioner to the validity of the Regulations fails. This
Court holds that the Regulations 2, 3 and 4 of the Guidelines on Access to
Biological Resources and Associated Knowledge and Benefits Sharing
Regulations, 2014 only clarifies and follows what is there in the Act and it is intra
vires the Act. - It is made clear that this Court has given no findings on the retrospective
operation of the above provision, since there is no such demand by SBB as of
now. This aspect is left open. - The writ petition fails and is hereby dismissed.
- No order as to costs.
