# M/s Sayeed Absar Bidi Works, Alld. & Ors v. State Of U.P. & Ors

- **Citation:** (2022) 3 ILRA 672
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-12-23
- **Case number:** Writ C No. 28617 of 2021
- **Bench:** Mrs. Sunita Agarwal, Vikas Budhwar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sayeed-absar-bidi-works-alld-ors-v-state-of-u-p-ors-47600
- **Pages:** 17

## Headnote

Biological Diversity Act, 2002 - Biological
Diversity Rules, 2004 - Guidelines on
Access
to
Biological
Resources
and
Associated
Knowledge
and
Benefits
Sharing Regulations, 2014 - U.P. Tendu
Patta
(Vyapar
Viniyaman
Adhiniyam)
Adhiniyam, 1972 - both the Acts namely
Tendu Patta Act, 1972 and the Biological
Diversity Act, 2002 operate in different
fields - fields/areas occupied by them are
not overlapping - Registration in Tendu
Patta Act, 1972 would not exclude the
petitioners from the purview of the
Biological Diversity Act, 2002, to share the
benefits
obtained
from
biological
resources used for commercial purposes,
to contribute to the fund for conservation
of
biological
diversity
and
ensure
sustenance of its components - As per
section 59 of Biological Diversity Act, 2002
provisions of the 2002 Act shall be in
addition to, and not in derogation of, the
provisions in any other law, for the time
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
673
being in force, relating to forests or
wildlife. (Para 28)

Petitioners contented that being manufacturers
of bidi & registered firms and companies under
the Tendu Patta Act 1972 shall not fall within
the purview of Biological Diversity Act, 2002
because of the language employed in Section
2(c) which excludes the "value added products"
from the meaning of biological resources - Held
- Contention of petitioner misconceived -
petitioners are under obligation to contribute to
the National Biodiversity Fund by providing fair
and equitable benefit sharing for commercial
utilization of biological resource (Tendu leaves
in this case) so as to achieve the objective of
the
Biodiversity
Act,
2002,
for
application/utilization of the said funds for
conservation
and
promotion
of
biological
resource (Tendu leaves, a plant product) (Para
29)

Disposed Of. (E-5)

## Text

_Characters 0–39,971 of 56,572. This is a partial read: ask again with offset=39971 for what follows._

672 INDIAN LAW REPORTS ALLAHABAD SERIES

10. Such a conduct by the authority,
charged with deciding/disposing of the
applications filed under Section 14 of the
SARFAESI Act, cannot but be said to be
action taken pursuant to the order dated
10.02.2022 passed by this Court in the
present writ petition. It is evident that the
Government Order dated 13.09.2021, that
has been enclosed as Annexure-1 to the
personal affidavit filed by the Chief
Secretary has been neglected by the
respondent-authority/the authority seized of
the
case
under
Section
14 of
the
SARFAESI Act.

11. This Court is dealing with several
writ petitions every week being filed by
secured creditors seeking directions to the
District
Magistrate
for
deciding
applications under Section 14 of the
SARFAESI Act.

12. Under the circumstances, it is for
the Chief Secretary of the State to take a
serious look at the state of affairs and ensure
compliance of the judgment and order dated
24.08.2021 passed by this Court as well as
the Government Orders issued by the
Government itself and take suitable action for
violation of the same. We also direct the
Chief Secretary of State of Uttar Pradesh to
also ensure compliance of those directions in
the judgment dated 24.08.2021 which are
highlighted in bold letters above.

13. Learned counsel for the petitionerbank has submitted that in view of the
counter affidavit filed on behalf of the
District Magistrate, the cause of action does
not survive.

14.

Therefore,
subject
to
the
directions made above for appropriate
action by the Chief Secretary of the State of
Uttar Pradesh, this writ petition is disposed
of.
----------
(2022)03ILR A672
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.12.2021

BEFORE

THE HON'BLE MRS. SUNITA AGARWAL, J.
THE HON'BLE VIKAS BUDHWAR, J.

Writ C No. 28617 of 2021

M/s Sayeed Absar Bidi Works, Alld. & Ors.
 ...Petitioners
Versus
State Of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Vivek Kumar Singh, Sri Bhagwati Prasad
Singh

Counsel for the Respondents:
C.S.C.

Biological Diversity Act, 2002 - Biological
Diversity Rules, 2004 - Guidelines on
Access
to
Biological
Resources
and
Associated
Knowledge
and
Benefits
Sharing Regulations, 2014 - U.P. Tendu
Patta
(Vyapar
Viniyaman
Adhiniyam)
Adhiniyam, 1972 - both the Acts namely
Tendu Patta Act, 1972 and the Biological
Diversity Act, 2002 operate in different
fields - fields/areas occupied by them are
not overlapping - Registration in Tendu
Patta Act, 1972 would not exclude the
petitioners from the purview of the
Biological Diversity Act, 2002, to share the
benefits
obtained
from
biological
resources used for commercial purposes,
to contribute to the fund for conservation
of
biological
diversity
and
ensure
sustenance of its components - As per
section 59 of Biological Diversity Act, 2002
provisions of the 2002 Act shall be in
addition to, and not in derogation of, the
provisions in any other law, for the time
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
673
being in force, relating to forests or
wildlife. (Para 28)

Petitioners contented that being manufacturers
of bidi & registered firms and companies under
the Tendu Patta Act 1972 shall not fall within
the purview of Biological Diversity Act, 2002
because of the language employed in Section
2(c) which excludes the "value added products"
from the meaning of biological resources - Held
- Contention of petitioner misconceived -
petitioners are under obligation to contribute to
the National Biodiversity Fund by providing fair
and equitable benefit sharing for commercial
utilization of biological resource (Tendu leaves
in this case) so as to achieve the objective of
the
Biodiversity
Act,
2002,
for
application/utilization of the said funds for
conservation
and
promotion
of
biological
resource (Tendu leaves, a plant product) (Para
29)

Disposed Of. (E-5)

(Delivered by Hon'ble Mrs. Sunita
Agarwal, J.
&
Hon'ble Vikas Bhudwar, J.)

1. Heard Sri Bhagwati Prasad Singh
learned Senior Advocate assisted by Sri
Vivek Kumar Singh learned counsel for the
petitioners and learned Standing Counsel
for the State-respondents.

2.

The
petitioners
herein
are
challenging the orders dated 6.7.2021
passed by the respondent no. 2 namely the
Secretary, U.P. State Biodiversity Board
and
the
consequential
order
dated
20.7.2021 passed by the respondent no. 3
namely the Divisional Director, Social
Forestry, Forest Division, Prayagraj asking
the
petitioners
to
comply
with
the
provisions of the Biological Diversity Act,
2002 (hereinafter referred to as "the Act,
2002"), by depositing the Access and
benefit sharing amount in Form '1' of the
Biological
Diversity
Rules,
2004
(hereinafter referred to as "the Rules,
2004") and Form 'Ka' of the Regulations,
2014 framed under the Act, 2002.

3.

The
petitioners
herein
are
manufacturers of bidi and are registered
partnership firms and company under the
relevant Acts. For the purposes of their
business, they are registered under the
G.S.T. Act with the competent authority as
well as the U.P. Tendu Patta (Vyapar
Viniyaman Adhiniyam) Adhiniyam, 1972
[herein referred to as "the Tendu Patta Act"
or U.P. Act No. 19 of 1972, as and where
the reference requires] with the Forest
Department of the State of the Uttar
Pradesh.

The registration period of the
petitioners under the U.P. Act No. 19 of
1972 is one year which has been renewed
from time to time in accordance with the
statutory provisions. The last renewal being
for the year 2021, the petitioners are
certified to carry on the business of
manufacturing bidi.

4. The arguments of the learned
Senior Advocate to challenge the orders
impugned are two folds.

Firstly, it is contended that the
petitioners are engaged in manufacturing
bidi for the past several years and they are
purchasing
Tendu
leaves
from
the
respective State Department, inasmuch as,
the collection and purchase of Tendu leaves
have been monopolized by the State
Government under the U.P. Act No. 19 of
1972. It is contended that under the Tendu
Patta Act, 1972 the collection, sale,
purchase and transportation of Tendu
leaves is solely regulated by the State
Government. The petitioners only purchase
674 INDIAN LAW REPORTS ALLAHABAD SERIES
Tendu leaves from the respective State
Department to use it to wrap the bidi as a
"value added product" and do not purchase
Tendu leaves from their growers or
collectors and as such would not fall within
the meaning of 'Traders' under the Act,
2002. After manufacturing bidi, they sell it
as a "value added product" in the open
market and, therefore, would not fall within
the meaning of "manufacturer" from
"biological resources" for "commercial
utilization" as per the Act, 2002. It is the
State Government which can only be
termed as 'trader' of Tendu leaves and since
the business or the commercial activities of
the petitioners is/are regulated by the U.P.
Act No. 19 of 1972, the provisions of the
Act, 2002 would not be applicable.

In
the
second
limb
of
submissions, it is argued that various
notices in the month of December, 2020
and January, 2021 were issued to each
petitioners separately, requiring them to
comply with the provisions of Sections 7 of
24 of the Act, 2002. A common reply to the
said notices was given by the petitioners on
25.2.2021 addressed to the Secretary, U.P.
State Biodiversity Board, Lucknow raising
objection with regard to the applicability of
the Act, 2002. It was specifically pleaded
therein that the Act, 2002 is in no way
applicable to the petitioners and they
cannot be made liable for any benefit
sharing under the Act, 2002 or the Rules
and the Regulations framed thereunder.
The bidis manufactured by the petitioners'
firms/Companies being "value
added"
product wherein other material as well are
used
which
are
excluded
from
the
definition of the "biological resources" as
defined under Section 2(c) of the Act,
2002, the utilization of Tendu leaves will
not be covered under the definition of
"commercial utilization" of "biological
resources" within the meaning of Section
2(f) of the Act, 2002. The impugned
notices seeking compliance of Sections 7
and 24 of the Biological Diversity Act,
2002 (the Act, 2002) are, thus, illegal and
liable to be set aside.

5. It is vehemently argued by the
learned Senior Counsel for the petitioners
that none of above contentions of the
petitioners have been dealt with while
passing the order dated 6.7.2021 by the
respondent no. 2 namely the U.P. State
Biodiversity Board. The orders impugned,
thus, suffer from the vice of violation of
principles of natural justice. The orders
impugned being result of non-application
of mind, non-speaking orders are liable to
be set aside.

It is lastly contended that the
petitioners cannot be relegated to file
appeal under Section 52-A of the Act, 2002
before the National Green Tribunal for two
reasons; (i) firstly, that no Green Tribunal
has been constituted within the State of
U.P. and relegating the petitioners to
approach the National Green Tribunal
located in Delhi would cause irreparable
loss to them and (ii) secondly, that since the
orders impugned are non-speaking orders,
the Court has inherent jurisdiction to quash
the same in order to meet the ends of
justice. In such a situation, the petitioners
cannot be relegated to file appeal before the
National Green Tribunal and as such the
writ petition may not be dismissed on the
ground of alternative remedy.

6. The notice of the writ petition on
behalf of the respondent nos. 1 and 3 has
been received in the office of the learned
Chief Standing Counsel. There is no
counsel designated to appear on behalf of
the respondent no. 2/Board.
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
675

7. We have heard the learned Senior
Counsel for the petitioners on the question
of applicability of the Act, 2002 and do not
find any reason to relegate the petitioners
on the said issue, inasmuch as, being a
Court of extraordinary jurisdiction, in
exercise of the powers under Article 226 of
the Constitution of India, the question of
applicability of the Act can be looked into
and need not be relegated to the National
Green Tribunal, moreso, for the language
employed in Section 52-A of the Act 2002,
which provides the remedy of appeal to a
person aggrieved by any determination of
benefit sharing or order of the State
Biodiversity Board.

Moving to the issue of applicability of
the Act, 2002 in view of the arguments of the
learned Senior Counsel for the petitioners in
light of the U.P. Act No. 19 of 1972, it would
be apposite to go through the provisions of
both the Acts in order to ascertain the area or
the field occupied by them. The U.P. Act No.
19 of 1972 has been enacted, in the public
interest, to create State monopoly in the
purchase and distribution of Tendu leaves
and for matters connected therewith.

In the Act, 1972, "grower of
Tendu leaves" means:-

(i) in respect of tendu leaves
grown on land which is for the time being
vested in and held by the State Government
or constituted as a reserved forest or
protected forest under the Indian Forest
Act, 1927- the State Government Act XVI of
1927).

(ii) in respect of tendu leaves
grown on land which is for the time being
vested in and held by a Gaon Sabha or
other local authority such Gaon Sabha or
other local authority;

(iii) in respect of tendu leaves
grown on land which is for the time being
held by a tenure-holder-such tenure holder;

(iv) in respect of tendu leaves
grown on land which is for the time being
held by a mortgagee in possession or
tenant or lessee on behalf of the State
Government or such Gaon Sabha, local
authority or tenure-holder as aforesaid-
such mortgagee in possession, tenant or
lessee, as the case may be;

(v) in respect of tendu leaves
grown on land which is for the time being
in the custody of a receiver appointed by a
court or by some other authority in exercise
of a power conferred by law- such receiver;

(vi) in respect of tendu leaves of
on land which is for the time being held by
any other person- such person;"

The Act, 1972 extends to the
whole of Uttar Pradesh and Section 3 states
that the entire area, to which the Act
applies, may be divided into such number
of units as the State Government may deem
fit. Section 5 of the Act, 1972 puts
restrictions on sale, purchase and transport
of Tendu leaves. It provides that no person
shall sell or purchase Tendu leaves to or
from any person other than the State
Government, officer or agent, in respect of
the unit in which the leaves have grown, on
any land of which he is not owner or
tenure-holder.

8. It further restricts transportation of
Tendu leaves except in the cases provided
under sub-clauses (i) to (iii) of clause (c) of
sub-section (1) of Section 5. Sub-section
(2) of Section 5 provides for issuance of
permits by the State Government or an
officer authorised by it for purchase and
676 INDIAN LAW REPORTS ALLAHABAD SERIES
transportation of Tendu leaves in or outside
the State of U.P. The State Government is
empowered to fix price at which Tendu
leaves shall be purchased by or for it in
each unit of the division during the
concerned year, on the advice of the
Advisory Committee constituted under
Section 6 of the Act, 1972. Section 8
obliges the State Government to purchase
at the price fixed under Section 7, all Tendu
leaves offered for sale to or for it during the
normal hours of business at a depot set up
by the State Government in that behalf.
Section 9 mandates registration of growers
of Tendu leaves other than the State
Government or a Gaon Sabha or other local
authority as also manufacturer of bidi and
exporter of Tendu leaves on payment of
such fee and in such manner as may be
prescribed. Section 10 provides that the
Tendu leaves purchased by or for the State
Government shall be sold or otherwise
disposed of in such manner as the State
Government may direct. Any contravention
of the provisions of the Act, 1972 is an
offence within the meaning of Chapter IX
of the Indian Forest Act, 1927 and would
be subjected to penalty as per Sections 13
and 14 of the Act, 1972. Section 18 of the
Act, 1972 empowers the State Government
to bring the rules to carry out the provisions
of the Act and to prescribe for the
publication of the price list of Tendu
leaves.

9. The U.P. Tendu Patta (Vyapar
Viniyaman)
Niyamawali,
1972
defines
'manufacturer of bidis' under Rule 2(7) as
including a person manufacturing bidis
through mazdoors by advancing them either
Tendu leaves or tobacco or both. The
'purchaser' within the meaning of Rule 2(9)
means a person to whom Tendu leaves have
been sold by the State Government under the
Act. Rule 3-A provides that a person who has
been appointed a purchaser as per the
provisions of Rule 9 may be issued a permit
in Form ''Q' by the Divisional Forest Officer
authorising him to collect Tendu leaves from
the grower(s) of the particular unit of which
he is a purchaser. The permit will, however,
contain the names of all growers of Tendu
leaves in the unit and estimated quantity of
leaves to be collected besides the name of the
purchaser. The said purchaser shall collect
Tendu leaves from the growers directly on
the payment of price thereof as offered in the
bid for the unit in his tender/auction, in the
manner as agreed to under Form ''R'. The said
purchaser shall also pay to such persons as
are engaged in the collection of leaves, such
collection charges as may have been notified
in the Official Gazette. The purchaser, as
noted above, shall be deemed to be an agent
of the State Government for the purposes of
Clauses (a) and (b) of sub-section (1) of
Section 5 of the Act. Rule 8 which deals with
the registration of manufacturers of bidis
and/or exporters of Tendu leaves provides
that the manufacturers of bidis shall be
registered in the manner provided in the said
rules after payment of an annual registration
fee of Rs. 50/- and that every registered
manufacturer of bidis shall maintain a register
of account of Tendu leaves in Form ''1' and
shall submit to the Divisional Forest Officer
two returns of stock in prescribed Form ''J' on
31st March and 30th September; each year.
The Conservator of Forest is empowered to
terminate the agreement and cancel the
certificate of registration of manufacturer of
bidi who has been punished under Section 13
of the Act for committing any breach of the
provisions of the Act and may also refuse
registration for such further period as it may
deem proper.

The manner of disposal of Tendu
leaves has been provided in Rule 9 framed
in accordance with Section 10(1) of the
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
677
Act, 1972 which is by a tender notice
advertised in the newspaper and selection
of successful tenderer or bidder after
issuance of the certificate of sale by the
State Government or its officer or the
agent.

10. A comprehensive reading of the
U.P. Act No. 19 of 1972 and the Rules,
1972 framed thereunder makes it clear that
the scope of the said Act is confined to the
sale, purchase and transport of Tendu
leaves at the price fixed by the State
Government and the quantity permitted by
it. The registration of manufacturers of
bidis under the Act, 1972 is to regulate the
purchase of Tendu leaves, i.e. to achieve
the object of the U.P. Act No. 19 of 1972.

11. On the other hand, the Act, 2002
has been framed with the object to provide
for conservation of biological diversity,
sustainable use of its components and share
and equitable sharing of the benefits arising
out of the use of biological resources;
knowledge
and
for
matters
connected
therewith or incidental thereto. The said Act
has been enacted in order to give effect to the
United Nations Convention on biological
diversity, to which India is a signatory on 5th
June, 1992. The Convention has been signed
by the contracting parties with the main
objective of conservation of biological
diversity being conscious of the importance
of biological diversity for evolution and for
maintaining life sustaining systems of the
biosphere. The preamble of United Nations
Convention on Biological Diversity affirms
that the conservation of biological diversity is
a common concern of humankind and
reaffirms that States have sovereign rights
over their biological resources and are
responsible for conserving their biological
diversity and for using their biological
resources in a sustainable manner. It has
taken note of the concern of the contracting
parties that biological diversity has been
insignificantly reduced by certain human
activities and noted that it is vital to
anticipate, prevent and attack the causes of
significant reduction or loss of biological
diversity at source. It was noted in the U.N.
Convention signed at Rio de Janeiro on 5th
June, 1992 that where there is a threat of
significant reduction or loss of biological
diversity, lack of full scientific certainty
should not be used as a reason for postponing
measures to avoid or minimize such a threat.
The
fundamental
requirement
for
the
conservation of biological diversity is the insitu conservation of ecosystems and natural
habitats and the maintenance and recovery of
viable populations of species in their natural
surroundings.

12.

In
order
to
provide
for
conservation, sustainable utilization and
equitable sharing of benefit arising out of
utilization of genetic resources and to give
effect
to
the
said
convention,
the
Parliament has enacted the Biodiversity
Act, 2002 which has been extended to the
whole of India.

The words "biological diversity",
"biological
resources",
"commercial
utilization", "fair and equitable benefit
sharing", "sustainable use" and "value
added products" have been defined in the
Act, 2002 in the following manner:-

"2. (b) "biological diversity"
means
the
variability
among
living
organisms from all sources and the
ecological complexes of which they are
part and includes diversity within species
or between species and of eco-systems;

(c) "biological resources" means
plants, animals and micro-organisms or
678 INDIAN LAW REPORTS ALLAHABAD SERIES
parts thereof, their genetic material and byproducts (excluding value added products)
with actual or potential use or value but
does not include human genetic material;

(f)
"commercial
utilization"
means end user of biological resources for
commercial utilization such as drugs,
industrial
enzymes,
food
flavours,
fragrance,
cosmetics,
emulsifiers,
oleoresins, colours, extracts and genes
used for improving crops and livestock
through genetic intervention, but does not
include
conventional
breeding
or
traditional
practices
in
use
in
any
agriculture, horticulture, poultry, dairy
farming, animal husbandry or bee keeping;

(g) "fair and equitable benefit
sharing" means sharing of benefits as
determined by the National Biodiversity
Authority under section 21;

(o) "sustainable use" means the
use of components of biological diversity in
such manner and at such rate that does not
lead to the long-term decline of the
biological diversity thereby maintaining its
potential to meet the needs and aspirations
of present and future generations.

(p) "value added products" means
products which may contain portions or
extracts
of
plants
and
animals
in
unrecognizable and physically inseparable
form."

13. Section 3 puts a restriction on
certain persons, who are not citizen of
India, a non-resident Indian and a body
corporate or association not incorporated or
registered in India for research or for
commercial utilization or for bio-survey
and
bio-utilization
of
any
biological
resources occurring in India, without
previous
approval
of
the
National
Biodiversity Authority which is established
under Section 8 of the Act, 2002. For
others, such as Indian citizen, a body
corporate,
association
or
organization
registered in India, Section 7 provides that
no such person shall obtain any biological
resource for commercial utilization, or biosurvey and bio-utilization for commercial
utilization,
except
after
giving
prior
intimation to the State Biodiversity Board
concerned. The only exception to this
provision is under the proviso to Section 7
which states that the said restriction shall
not apply to the local people and
communities of the area, including growers
and cultivators of biodiversity and vaids
and hakims, who have been practising
indigenous medicine.

14.

The
National
Biodiversity
Authority is a body corporate established
by notification in the Official Gazette by
the Central Government. Functions and
powers
of
the
National
Biodiversity
Authority has been provided in Section 18
of the Act, 2002. Section 22 of the Act,
2002 contemplates establishment of the
State Biodiversity Board by notification in
the
Official
Gazette
by
the
State
Government for the purposes of the Act,
which is a body corporate and shall
discharge functions and powers as provided
under Sections 23 and 24 of the Act, 2002.
Under Section 23(b), one of the functions
of the State Biodiversity Board is to
regulate by granting of approvals or
otherwise
requests
for
commercial
utilization or bio-survey and bio-utilization
of any biological resources by Indians.
Section 24 provides that any citizen of
India or a body corporate, organization or
association registered in India intending to
undertake any activity referred to in
Section 7 shall give prior intimation in such
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
679
form as may be prescribed by the State
Government, to the State Biodiversity
Board. The State Biodiversity Board, on
receipt
of
such
intimation,
may
in
consultation
with
the
local
bodies
concerned and after making enquiries, by
order, prohibit or restrict any such activity
which in its opinion is detrimental or
contrary to the objectives of conservation
and sustainable use of biodiversity or
equitable sharing of benefits arising out of
such activity. Section 32 of the Act, 2002
contemplates
Constitution
of
State
Biodiversity
Fund
wherein
all
sums
received by the State Biodiversity Board
apart from the grants and loans received by
it shall also be credited. The State
Biodiversity Fund as per sub-section (2) of
Section 32 shall be applied for (c)
conservation and promotion of biological
resources apart from other purposes as
provided in clauses (a), (b), (d) and (e)
therein.

15. Section 41 of the Act, 2002
contemplates Constitution of Biodiversity
Management Committee by the local
body within its area, for the purpose of
promoting conservation, sustainable use
and documentation of biological diversity
including preservation of habitats etc....
The National Biodiversity Authority and
the State Biodiversity Boards are required
to consult the Biodiversity Management
Committee while taking any decision
relating to the use of biological resources
and knowledge associated with such
resources occurring within the territorial
jurisdiction
of
the
Biodiversity
Management
Committee.
The
Biodiversity Management Committee is
also empowered to levy charges by way
of collection fees from any person for
accessing or collecting any biological
resource for commercial purposes from
areas
falling
within
its
territorial
jurisdiction. The Local Biodiversity Fund
constituted under Section 43 as contained
in Chapter XI of the Act, 2002 is to be
utilized for conservation and promotion
of biodiversity in the areas falling within
the jurisdiction of the concerned local
body
and
for
the
benefit
of
the
community in so far such use is
consistent
with
conservation
of
biodiversity.

16. Section 21 of the Act, 2002
deals with the determination of equitable
benefit sharing by National Biodiversity
Authority and reads as under:-

"21. Determination of equitable
benefit sharing by National Biodiversity
Authority.--

(1) The National Biodiversity
Authority shall while granting approvals
under section 19 or section 20 ensure
that the terms and conditions subject to
which
approval
is
granted
secures
equitable sharing of benefits arising out
of
the
use
of
accessed
biological
resources, their by-products, innovations
and practices associated with their use
and applications and knowledge relating
thereto in accordance with mutually
agreed terms and conditions between the
person applying for such approval, local
bodies
concerned
and
the
benefit
claimers.

(2) The National Biodiversity
Authority shall, subject to any regulations
made in this behalf, determine the benefit
sharing which shall be given effect in all or
any of the following manner, namely:--

(a) grant of joint ownership of
intellectual property rights to the National
680 INDIAN LAW REPORTS ALLAHABAD SERIES
Biodiversity Authority, or where benefit
claimers are identified, to such benefit
claimers;

(b) transfer of technology;

(c)
location
of
production,
research and development units in such
areas which will facilitate better living
standards to the benefit claimers;

(d)
association
of
Indian
scientists, benefit claimers and the local
people with research and development in
biological resources and bio-survey and
bio-utilisation;

(e) setting up of venture capital
fund for aiding the cause of benefit
claimers;

(f)
payment
of
monetary
compensation and other non-monetary
benefits to the benefit claimers as the
National Biodiversity Authority may deem
fit.

(3) Where any amount of money
is ordered by way of benefit sharing, the
National Biodiversity Authority may direct
the amount to be deposited in the National
Biodiversity Fund:

Provided that where biological
resource or knowledge was a result of access
from specific individual or group of individuals
or organisations, the National Biodiversity
Authority may direct that the amount shall be
paid directly to such individual or group of
individuals or organizations in accordance with
the terms of any agreement and in such manner
as it deems fit.

(4) For the purposes of this
section, the National Biodiversity Authority
shall, in consultation with the Central
Government,
by
regulations,
frame
guidelines."

17. The Biological Diversity Rules,
2004 have been framed in exercise of the
powers conferred by Section 62 of the
Biological Diversity Act, 2002.

Rule 20 (1) & (2) of the Rules,
2004 provide criteria for "equitable benefit
sharing" as contemplated in Section 21. As
per the said provisions, the Authority
namely the National Biodiversity Authority
shall formulate the guidelines to describe
the benefit sharing formula by notification
in the Official Gazette, which shall provide
for such monetary and other benefits as
given in the sub-rule (2). Such benefit
sharing formula as per sub-rule (3) of Rule
20 shall be determined on case-by-case
basis. Rule 20(5) and (6) provides that the
quantum of benefits shall be mutually
agreed upon between the persons applying
for approval before the authority and
depending upon each case, the authority
shall stipulate the time frame for assessing
benefit sharing on the nature of benefits
being short, medium and long term. Rule
20(7) and (10) states that the authority shall
stipulate
that
benefits
shall
ensure
conservation
and
sustainable
use
of
biological diversity and that it shall monitor
the flow of benefits determined under subrule (4) in a manner determined by it.

In exercise of powers conferred
by Section 64 read with sub-section (1) of
Section 18 and sub-section (4) of Section
21 of the Biological Diversity Act, 2002,
the Regulations named as Guidelines on
Access
to
Biological
Resources
and
Associated
Knowledge
and
Benefits
Sharing Regulations, 2014 (In short as "the
Regulations, 2014") have been framed.
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
681

Regulation 2 of the Regulations,
2014 provides that:-

"2. Procedure for access to
biological
resources,
for
commercial
utilization or for bio-survey and bioutilization 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
resources, for commercial utilization or for
bio-survey
and
bio-utilization
for
commercial utilization referred to in that
sub-regulation."

Regulations 3 and 4 deal with the
formula and mode of benefit sharing for
access
to
biological
resources
for
commercial utilization which read as
under:-

"3. Mode of benefit sharing for
access
to
biological
resources,
for
commercial utilization or for bio-survey
and
bio-utilization
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
682 INDIAN LAW REPORTS ALLAHABAD SERIES
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.

4. 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 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 % "

Regulation 17, however, exempts
certain activities and classes of persons
from requiring approval of the National
Biodiversity
Authority
or
State
Biodiversity Board, named as:-

"17. Certain activities or persons
exempted from approval of NBA or SBB. --

The
following
activities
or
persons shall not require approval of the
NBA or SBB, namely:-

(a) Indian citizens or entities
accessing biological resources and/ or
associated knowledge, occurring in or
obtained from India, for the purposes of
research or bio-survey and bio-utilization
for research in India;

(b)
collaborative
research
projects,
involving
the
transfer
or
exchange of biological resources or
related
information,
if
such
collaborative research projects have
been
approved
by
the
concerned
Ministry or Department of the State or
Central Government and conform to the
policy guidelines issued by the Central
Government
for
such
collaborative
research projects;

(c) local people and communities
of the area, including growers and
cultivators of biological resources, and
vaids and hakims, practising indigenous
medicine, except for obtaining intellectual
property rights;

(d)
accessing
biological
resources for conventional breeding or
traditional
practices
in
use
in
any
agriculture, horticulture, poultry, dairy
farming, animal husbandry or bee keeping,
in India;

(e)
publication
of
research
papers or dissemination of knowledge, in
any seminar or workshop, if such
publication is in conformity with the
guidelines
issued
by
the
Central
Government from time to time;

(f)
accessing
value
added
products, which are products containing
portions or extracts of plants and animals
in
unrecognizable
and
physically
inseparable form; and
3 All. M/s Sayeed Absar Bidi Works, Alld. & Ors. Vs. State of U.P. & Ors.
683

(g)
biological
resources,
normally traded as commodities notified by
the Central Government under section 40
of the Act."

A notification dated 7th April,
2016 has been published in the Gazette of
India by the Central Government in
exercise of the powers conferred by Section
40 of the Biological Diversity Act, 2002,
which contains the table having the details
of said biological resources which are
normally traded commodities subject to the
terms enumerated in the notes given below
in the said table.

18. We may note that the said table
gives details of the items, the biological
resources, illustrative trade or common
name, plant part and the source from which
the said plant part is obtained.

19. We may note, at the outset, that
Tendu leaves is not enlisted in the aforesaid
notification
as
"normally
traded
commodities" nor it is exempted in any of
the clauses of Regulation 17 of the
Regulations, 2014.

20. The meaning of the "biological
resources" as contained in Section 2(c) of
the Act shows that it includes plants with
actual or potential use or value and
excludes "value added products" and
"human
genetic
material".
The
"commercial utilization" as defined in
Section 2(f) means end user of biological
resources for commercial utilization and
excludes
conventional
breeding
or
traditional
practices
in
use
in
any
agriculture, horticulture, poultry, dairy
farming, animal husbandry or bee keeping.
The "value added products" as defined in
Section 2(p) means products which may
contain portions or extracts of plants in
unrecognizable and physically inseparable
form. The "fair and equitable benefit
sharing" as defined in Section 2(g) as
determined by the National Biodiversity
Board as per the criteria provided in Rule
20 of the Rules, 2004 is for the purpose to
ensure the conservation and sustainable use
of biological diversity.

21. The Regulations, 2014 framed by
the National Biodiversity Authority in
exercise of the power conferred by Section
64 read with Section 21(4) of the Act, 2002
contains guidelines for access to biological
resources and provides for benefit sharing
formula. Regulation 2 clearly states that
any person who intends to have access to
biological
resources
for
commercial
utilization shall apply to the National
Biodiversity
Authority
or
the
State
Biodiversity Authority, in the prescribed
format, as the case may be, and further
states that such authority or the Board shall
enter into a benefit sharing agreement with
the applicant on being satisfied with the
application so moved and such agreement
shall be deemed as grant of approval for
access
to
biological
resources
for
commercial utilization. Regulations 3 and 4
provides the mode and option of benefit
sharing for access to biological resources,
wherein
formula
for
the
applicants/traders/manufacturers who have
entered into any prior benefit sharing
negotiation with the concerned person or
who have not entered into any such
negotiation has been prescribed.

22. The object and purpose of the Act,
2002 by regulating use of biological
resources for commercial utilization is with
the main objective of conservation of
biological diversity and sustainable use of
its components. By providing the idea of
fair and equitable sharing of the benefits
684 INDIAN LAW REPORTS ALLAHABAD SERIES
arising out of biological resources, as
determined by the National Biodiversity
Authority under Section 21, the object is to
achieve the end result, the conservation of
biological resources and its sustainable
utilization, i.e. use of components of
biological diversity in such manner and at
such rate that does not lead to the long term
decline of the biological diversity, and
thereby maintaining its potential to meet
the needs and aspirations of present and
future generations. The idea, thus, is to give
back to the Mother Nature the products
which have been used by the humankind
for their sustenance or usage.