2000 (4) TMI 815 - SC - Indian Laws

Supreme Court affirms licensing requirement for wood activities under Bihar Saw Mills Act

TATA ENGINEERING & LOCOMOTIVE CO. LTD Versus. STATE OF BIHAR AND ANOTHER,

The Supreme Court upheld the High Court's decision, affirming that the appellant must obtain a license and comply with the Bihar Saw Mills (Regulation) ... - Issues Involved:1. Applicability of the Bihar Saw Mills (Regulation) Act, 1990 and the Bihar Saw Mills (Regulation) Rules, 1993 to the appellant.2. Requirement for the appellant to obtain a license under the Act.3. Interpretation of statutory provisions and definitions under the Act.4. Compliance with obligations under Sections 9 and 10 of the Act and related Rules.Summary:1. Applicability of the Act and Rules:The appellant, engaged in manufacturing vehicles, uses wood for various components and operates sawmills within its premises. The appellant contended that the Bihar Saw Mills (Regulation) Act, 1990 and the Bihar Saw Mills (Regulation) Rules, 1993 do not apply to them as they do not trade in timber but use it for their manufacturing activities. The Division Bench of the High Court rejected this claim, holding that the company's activities fall within the scope of the Act and Rules. The definitions of 'sawmill,' 'saw-pit,' and 'sawing' in the Act were deemed broad enough to cover the appellant's operations.2. Requirement for License:Section 5 of the Act mandates that no person shall establish or operate a sawmill or saw-pit without a license. The appellant argued that their use of sawmills is ancillary to their main business and does not constitute a trade in timber, thus exempting them from the licensing requirement. The High Court, however, held that the appellant must obtain a license to ensure regulation and control of wood usage, which is crucial for forest conservation and environmental protection.3. Interpretation of Statutory Provisions:The appellant relied on the decision in Utkal Contractors & Joinery (P) Ltd. v. State of Orissa to argue that the Act should be interpreted in the context of its object and purpose. The Supreme Court emphasized that statutes should be construed with imagination of the purposes behind them. The Act's preamble indicates its aim to regulate sawmills and saw-pits for forest and environmental protection. The Court found that the definitions and provisions of the Act are designed to cover all activities involving wood usage, not just commercial trade.4. Compliance with Obligations:Sections 9 and 10 of the Act require licensees to submit returns and maintain accounts of wood stock. The appellant argued that these obligations are impractical for them as they purchase wood from licensed dealers and do not sell timber. The Court held that the appellant, being a significant consumer of wood, must comply with these requirements to allow effective monitoring by the Forest Department. The term 'disposal' in Rule 7 was interpreted broadly to include all forms of wood usage, not just sales.Conclusion:The Supreme Court upheld the High Court's decision, dismissing the appeal and affirming that the appellant must obtain a license and comply with the Act and Rules. The Court emphasized the importance of regulating wood usage to prevent deforestation and protect the environment.