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PETITIONER: TATA ENGINEERING AND LOCOMOTIVE CO.  LTD.

       Vs.

RESPONDENT: THE STATE OF BIHAR & ANR.

DATE OF JUDGMENT:       24/04/2000

BENCH: Doraiswami raju, V.N.Khare

JUDGMENT:

     Raju, J.

     The above appeal is against the judgment of a Division Bench  of  the Patna High Court whereunder the claim of  the appellant to quash the notice dated 16.11.95 asking the Vice President of the appellant-company to take licence under the Bihar Saw Mills (Regulation) Act, 1990 (hereinafter referred to  as  ‘the  Act) came to be rejected and the  Court  also declined  to  grant  a  declaration   sought  for  that  the provisions  of  the  Act and the  Rules  framed  thereunder, namely,  the  Bihar  Saw   Mills  (Regulation)  Rules,  1993 (hereinafter  referred to as ‘the Rules) are not applicable to them.

     The  appellant-company is engaged in manufacturing and assembling  of  vehicles of various  descriptions  including trucks and light motor vehicles, such as Car, Jeep, etc.  at its  various  factories  situate in different parts  of  the country including the State of Bihar.  The activities of the company  consist  of  manufacturing  of  trucks  of  various descriptions  and  size,  as  also  their  components.   The company,  in  the  course of its  manufacturing  activities, requires articles and components made of wood for being used as  battery base for chassis, gaggers for production of tool box,   pallet  platform,  staging   platform   staging   for C.E.D./M.C.  wheel carrier, etc.  To meet such requirements, the company claims to purchase substantial and huge quantity of  wood/  timber  from   registered  dealers  having  valid licences and the same is used in their own saw mills located inside  their factory premises for manufacturing the various wooden  components required for their main business.  On  an inspection  made, the company was found to have been running about   5  to  8  saw   mills  inside  their  premises   and indisputably they have not obtained any licence either under the  Act  in  question or the Forest Act  for  transport  of timber  purchased by them, their claim throughout being that they  are  not carrying on any trade in timber as  such,  by selling  wood  to any outsider nor are they engaged  in  the activities  of  saw  trading as such and that they  are  not covered  under  the Act with any liability to take  out  any licence or pay any licence fee therefor.

     The  Division  Bench  of the High Court  repelled  the contentions of the company and held that the admitted nature of  activities of the company are sufficient to attract  the

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provisions  of the Act and the theory of end product use  or that  they are only incidental to the main business activity of  manufacturing automobile vehicles, have no relevance  in adjudging their liabilities under the Act and the Rules made thereunder.   The  definitions contained in the Act of  saw mill,  saw pit and sawing were held to be of sufficient amplitude  to  cover the activities of the company.   Hence, this appeal.

     Shri R.F.  Nariman, learned senior counsel, while ably presenting  the case of the appellants reiterated the  stand taken  before  the High Court and vehemently contended  that the  existence  of  ‘saw mills or ‘saw pits  or  the  mere activity  of  ‘sawing by themselves are not  sufficient  to attract  the  provisions  of  the Act  and  the  Rules  made thereunder  - those activities of the company being  carried not  by  way  of trade in timber but only as  ancillary  and incidental  to  their  main business  of  manufacturing  and selling  automobiles  of various kinds and  varieties.   The further  submission on behalf of the appellant is that it is always  necessary to find out the object and reason as  well as  the  reach of the statutory provisions and  the  general words  in the statute/rules would take colour only from  the reason  for it.  Argued the learned counsel further that  as long  as the activities of the company are not in the course of any trade as such in timber and the machineries installed in the factory premises are for cutting the timber purchased by  them  lawfully from registered and licensed dealers  for manufacturing the various components of the automobiles only the  provisions of the Act and the Rules made thereunder had no  application to the appellants and consequently, they are neither  obliged to take any licence or pay any licence  fee nor  could  they  be penalised for not  complying  with  the provisions  of  the Act.  The learned counsel placed  strong reliance  upon the decision reported in Utkal Contractors  & Joinery  Private  Ltd.   vs State of Orisssa [1987  (3)  SCR 317],  besides inviting our attention at great length to the various provisions of the Act and Rules to demonstrate as to how,  in  his  view, the provisions  are  inappropriate  and inapplicable to the case of the appellants.

     Per  contra,  Shri  Rakesh   Dwivedi,  learned  senior counsel appearing for the respondent-State, with equal force and  vehemence  contended  that,  a  careful  analysis   and consideration  of  the  provisions of the Act, even  in  the light  of  the principles of construction suggested for  the appellants  would  make them applicable to the case  of  the appellants  - the object and reason as well as the reach  of the  provisions  being  not only to regulate ‘The  Trade  of Sawing  but  also  the establishment and operation  of  saw mills and saw pits as defined in the Act and further for the protection  and  conservation of forests and environment  in the  State,  in public interest.  The fact that one  or  the other of the Rules or Forms prescribed and some or the other particulars   specified  therein  may   not  apply  to   the appellants  is  no  test, according to the  respondents,  to exclude  its application to the appellants.  While  inviting our  attention extensively to the provisions in the Act  and the  Rules, it was contended that the provisions of the  Act were deliberately couched in the widest possible language to regulate and control, for the protection and conservation of forests  and  environment, and viewed in the context of  the mischief  sought to be prevented, the provisions have to  be liberally construed in furtherance of the laudable object of the  legislation, keeping in view the factual position  that

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those  industries which are located in and around Jamshedpur consume  huge  volume of wood for commercial and  industrial purposes  and  those areas are surrounded by forests in  the State  of  Bihar  and bordering States of  Orissa  and  West Bengal.   For the respondents, it has also been pointed  out that  other industries located in the Jamshedpur, i.e., Tata Iron  and Steel Company Ltd, Indian Tubes Company, Tin Plate Company,  etc.,  operating saw mills similarly within  their factory  premises have taken licences under Section 5 of the Act.

     ‘Saw  mill is defined in Section 2 (g) of the Act  as follows:   2 (g).  Saw mill means the plant and machinery with  which and the premises including the precincts thereof in  which or in any part of which sawing is carried on  with the aid of electrical or mechanical power.

     ‘Saw  pit  is  also defined in Section 2 (h)  in  the following  terms:   2 (h).  Saw pit means a  place  where wood is sawn by manually-operated saws.

     Similarly  Section  2 (i) defines ‘Sawing to mean  as hereunder:

     2  (i).  Sawing with its grammatical variations and cognate  expressions  means  operation of  sawing,  cutting, converting,  fashioning  or  seasoning   wood  and  includes preservation  and  treatment  thereof either  by  mechanical process  with  the aid of electrical or mechanical power  or manually-operated saws.

     ‘Wood  has also been defined in Section 2 (k) to mean and include trees when they have fallen or have been felled, and  all  wood  of  any   species  whether  cut,  converted, fashioned, sawn or hallowed out for any purpose or not.

     The  other  relevant  provisions   to  appreciate  the submissions  of the learned counsel on either side, to which detailed  reference had also been made by them, are Sections 5,  9,  10  and  25 as well as Rules  No.7  and  Form  No.D. Section  5  of  the  Act, which mandates  the  taking  of  a licence, reads as follows:

     5.   Application  for  licence.-  On  and  from   the appointed day-

     (a)  no person shall establish a saw mill or a saw pit except  under the authority and subject to the conditions of a licence granted in that behalf under this Act;

     (b) no person shall operate a saw mill or a saw pit in existence  on the said date, unless he is granted a  licence in that behalf under this Act on an application made by such person within a period of thirty days from such date:

     Provided  that  for  the  period of  thirty  days  and thereafter  the  period  during  which  the  application  is pending  for  consideration, it shall be deemed as  if  such person  was  granted  a licence under this Act  and  he  was operating the saw mill or saw pit accordingly.

     Section 9, which provides for submission of returns by a  licenee,  and Section 10, which obligates the keeping  of account  of  stock of wood in saw mill and saw pit, read  as follows:

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     9.   Submission  of  returns - Every  licensee  shall submit such returns relating to the business of the saw mill or  saw  pit, as the case may be, and in such forms  and  to such officers and on such dates as may be prescribed.

     10.   Keeping of account of stock of wood in saw  mill and  saw  pit  - All wood whether sawn or not, found  in  or brought  to the saw mill or saw pit or at the site of sawing at any time or during any period by any person in any manner or  by  any  means for purpose of sawing or  for  any  other purpose  shall  always  be properly accounted  for  and  all relevant   evidence,   documents,    receipts,   order   and certificate  as  are  necessary  to show that  the  wood  is legally  obtained, shall be maintained and made available at the  time of inspection.  It shall be presumed in respect of the  stock of wood which is not accounted for satisfactorily that  the same has been obtained unlawfully and the stock of wood shall be liable for confiscation.

     Section  25  contains the saving clause by  virtue  of which  certain  class and category of activities  and  State Government are exempt from the application of the Act and it reads as follows:

     25.   Saving - The provisions of this Act or the Rule made thereunder shall not apply to -

     (a) the ordinary operations of carpentry not involving saw mill or saw pit operations;

     (b)  any  saw  mill  or saw pit  owned  by  the  State Government.

     The   conditions  of  licence   which  caste   certain obligations on the licensee and which are set out in Rule 4, read as follows:

     4.   Grant  of  licence - (1) The  licensing  officer shall grant the licence in Form C.

     (2)  The  licence  shall be subject to  the  following conditions:-

     (a)  The sawing operations in the saw mill and saw pit shall not be carried out after sunset and before sunrise.

     (b)  The certified copies of the licence granted under sub-rule  (1) shall be displayed at conspicuous place in the saw mill or saw pit.

     (c)  The  licence  shall  maintain  daily  account  of receipt of wood purchased, sawing and disposal in Form ‘D.

     (d)  The  monthly account of wood received for  sawing only shall be maintained in Form ‘E.

     (e)  The registers of accounts shall, if so  required, be  produced  before  the  licensing officer  or  any  other officer authorised by him for inspection.

     (f)  If  the  licensee or the person incharge  of  the operation  of saw mill or saw pit has reason to believe that the  wood brought to the saw mill or the saw pit is illicit, he  shall  inform  the nearest Range Officer of  Forests  as

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early as possible, about the arrival of illicit wood.  In no case, the illicit wood shall be sawn.

     (g)  The  expansion  of the saw mill or  saw  pit,  or change  in its location shall not be carried out without the written permission of the licensing officer.

     (3) The licence shall be valid for a calendar year for which it was issued.

     (4)  The copies of conditions (under whom the  licence is  being  granted) and the copies of forms of accounts  (in which receipt of wood, sawing and disposal) shall be showing to  the  applicant by the licensing officer before grant  of the  licence.   The  licensing  officer  shall  explain  the conditions and the subject matter of draft to the applicant, if  he  is  unable to read.  The  licensing  officers  shall obtain  the signature or thumb impression of the  applicant, as  the  case  may be, on the application in  token  of  the acceptance  of  the  conditions.   The  applicant  shall  be applied with one copy each of conditions and terms, in which account shall be maintained.

     (5)  In  case  the licence is lost and  smuttered  the licensee  may  obtain  a certified copy of  the  licence  on payment  of rupees one hundred for each saw mill and  rupees ten for each saw pit, from the licensing officer.

     Rule  7  of  the Rules mandates the maintenance  of  a register  in  Form  No.D and monthly account in  Form-E  and enjoins upon a licensee to submit a return of those accounts to  the  concerned Divisional Forest Officer by a  date  not later  than 10th of every month.  Form-D pertains to details of  purchase  of  wood for sawing and  disposal  and  Form-E relates  to  the  monthly  account of  arrival,  sawing  and disposal  of  wood  received  for  sawing.   All  these  are designed   to  assist  the   Licensing  Officer  and/or  any authorised  person,  to effectively discharge  their  duties under  Section  8  of  the Act  and  thereby  ensure  proper compliance  with  the  provisions of the  Act,  by  everyone concerned.

     Statutes, it is often said, should be construed not as theorems of Euclid but with some imagination of the purposes which  lie  behind them and to be too literal in meaning  of words  is  to  see the skin and miss the soul.   The  method suggested  for adoption, in cases of doubt as to the meaning of  the  words  used  is to explore  the  intention  of  the legislature  through the words, the context which gives  the colour,  the  context, the subject matter, the  effects  and consequences  or  the  spirit and reason of  the  law.   The general  words and collocation or phrases, howsoever wide or comprehensive in their literal sense is interpreted from the context  and scheme underlying in the text of the Act.   The decision  in  Utkal Contractors & Joinery Pvt.   Ltd.   case (supra)  also  emphasis the need to construe the words in  a provision  in the context of the scheme underlying the other provisions  of  the  Act  as   well,  which  ultimately  was considered  to  be  in tune with the object set out  in  the statement of objects and reasons and in the Preamble.  Apart from  the  fact  that  the  observations  contained  in  the decision  have  to be understood in the light of  the  issue raised  and  exercise undertaken by the Court  therein,  the fallacy  in  the submission on behalf of the appellant  lies though  not in the principles of construction to be  adopted

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but  in the assumption of the counsel to confine or restrict and  construe the law in question to be one made to regulate the  trade  of sawing, contrary to the very  Preamble  which reads,  To  make  provisions for regulating in  the  public interest  the  establishment and operation of saw mills  and saw  pits  and  trade  of  sawing  for  the  protection  and conservation  of  forest  and   the  environment  (emphasis applied).

     This  Court  has on more than one occasion  proclaimed the  need  for  strict regulation of wood  based  industries after  identifying  the proliferation of such industries  to constitute  the  main  cause  of  degradation  of   forests, resulting  in  serious  threat to  ecology  and  environment protection.   Apparently conscious of the nature of evil  to be  curbed  and  the laudable object to be achieved  a  most liberal and wide definition of ‘Sawing of all comprehensive nature  has been enacted to rope in all kinds of  activities connected  with  the  use  and   consumption  of  wood   and ultimately classify the users under two different categories depending   upon  the  nature  of  operation  viz.,   manual operation  or  operation  with  the  aid  of  electrical  or mechanical  power.  Section 5 of the Act not only  prohibits the  establishment  of a saw mill/saw pit except  under  the authority and subject to the conditions of a licence granted but also further interdict the operation of such mill or pit even  in  existence on the appointed date, with grant  of  a leeway period to enable the existing mills/pits to apply and obtain  the required licence.  Keeping in view all these and the provisions contained in Section 10 of the Act, the words ‘business  of  the saw mill or saw pit used in relation  to submission  of  returns have to be construed in its  generic sense of calling, occupation or pursuit and not restrict the same  to the use of the word in a commercial sense or  trade parlance.   The object underlying Sections 9 and 10 seem  to be  to trace the origin or identity as well as source of the timber/wood  and  keep track of the transit movement of  the wood  utilised  to prevent and effectively check  ultimately indiscriminate  and  illicit felling of trees  resulting  in deforestation.   The decision of this Court relied upon  for the  appellant,  properly construed and the principles  laid down  therein  appreciated  and   applied  in  their  proper perspective  tend to support rather the stand taken for  the respondent-State.   That the legislature thought of enacting a  saving clause in Section 25 to make it clear that nothing in  the  Act  or  the  Rules shall  apply  to  the  ordinary operations  of  carpentry not involving saw mill or saw  pit operations  and  any saw pit or saw mill owned by the  State Government  also  serve as an indicator of the intention  of the   legislature   to  have   only  an  all   comprehensive regulations  to effectively control, regulate and  supervise the transit/movement of the wood from its origin to ultimate utilisation  by those who have saw mills/saw pits as defined under the Act.

     The  attempts made on behalf of the  appellant-company to  demonstrate  that the obligations cast upon  a  licensee under  Sections  9  and  10 of the Act and  the  Rules  made thereunder and Form No.D prescribed are not capable of being complied  with  by the appellant and it would  otherwise  be superfluous  also  for  the reason that  they  purchase  the timber/wood   needed  for  their   requirements  only   from registered  dealers and they themselves do not deal with  or sell  the  timber as such timber to anyone else  but  merely utilise  the same and thereby consume the timber/wood in the

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course  of  the process of manufacturing the automobiles  of various  kinds  do  not  either appeal to us  or  merit  our acceptance.   Being  a  bulk consumer of  huge  quantity  of timber/wood, utilising them by carrying on sawing activities in  their saw mills though located in their premises  driven with  electrical  and mechanical power, it is but  necessary that the appellant-company should obtain a licence under the Act  so  that the authorities of the forest  department  can effectively  keep  track of their purchases and  utilisation and  thereby  ensure  that their activities do  not  in  any manner  help  or encourage even indirectly those engaged  in illicit  felling  of trees in disposing of  such  ill-gotten timber/wood.  The maintenance of the accounts and submission of returns as enjoined under Sections 9 and 10 and the Rules made  thereunder  will  help  to  effectively  enforce   the provisions of the Act as also the other legislation in force in  order to conserve and safeguard the forests.  We find it difficult to agree with the claim of the learned counsel for the  appellant that the word ‘disposal in Rule 7, should be interpreted  to mean only disposal by way of sale of wood in some  form or other as wood by drawing inspiration from  the columns/heads  in  Form-D such as ‘sales and  ‘interstate. The  word ‘disposal is of wide import and would include all acts  or  process  of disposal in the sense  of  regulating, ordering,  conducting  or  conditioning   of  something   or business and also putting in a particular place or location, anything.   If  the  Form  No.D had  a  column  Sale,  the licensee  need only record that the goods have been consumed by  them  indicating  local  consumption  in  their  factory premises  and  that  it  was   not  transported  as   timber simpliciter  outside  their  factory.  Even  otherwise,  the obligation to maintain and preserve accounts as envisaged in Section  10  of the Act and the Rules made  thereunder  with particulars  specified in Form-E cannot be disowned and this obligation  is  independent of even the liability to  submit returns  as  envisaged under Section 9.  Therefore, we  find nothing  in  the  Rules or Forms prescribed to  justify  any claim of immunity for the appellant from the liabilities and obligations cast upon it under the Act and the Rules.

     For  all the reasons stated above, we see no merit  in the  challenge  made  to the order of the High  Court.   The appeal, consequently, fails and is dismissed.  No costs.