Gomti Biotech Limited vs State of U.P. and Others

Ashok Bhushan, J.—These writ petitions raise common issues for consideration, which have been heard together and are being disposed of by this common judgment.

In Writ Petition No. 11068 of 2008 there being extensive pleadings, the said writ petition is treated as leading writ petition, which is hereinafter referred to as the first writ petition.

Brief facts necessary to be noted for deciding all these writ petitions are; the petitioner in first writ petition, namely, Gomti Biotech Limited, is a company registered under the Companies Act having its registered office at Tikonia Road, Haldwani, State of Uttaranchal. The company claims to be involved in the research and development of BioDiesel, which is an alternative fuel to be used in vehicles in place of petroleum products. The petitioner claims that BioDiesel is a product from waste vegetable oil and nonedible oils like Soyabeen, Sunflower, mustered oil, Jatropha Curcas and Neem etc. The petitioner claims to be manufacturing BioDiesel from its own research and development. The Gomti Biotech Limited has appointed its dealer in the State of Uttaranchal as well as in the State of Uttar Pradesh. The petitioner in Writ Petition No. 63299 of 2008 (hereinafter referred to as the second writ petition) claims to be appointed for the sale of entire range of products of Gomti Biotech at district Shahjahanpur and the petitioner, Sukhpal Singh claims to have established a pump for retail sale of biodiesel at Tahsil Powayan, District Shahjahanpur. The petitioner of Writ Petition No. 64192 of 2008 (hereinafter referred to as the third writ petition), namely, Somvir also claims to have been appointed as a dealer by Gomti Biotech Limited and has established a pump at Tahsil Gauhana, District Aligarh for retail sale of the products of Gomti Biotech. The State authorities on 14th February, 2008 have sealed the biodiesel pump, namely, Maa Vaisno BioDiesel Center, Jaitipur, Shahjahanpur and another BioDiesel pump of the Gomti Biotech Limited located at Pohalarpur, Puwayan, Shahjahanpur was also sealed on 15m February, 2008 by the officials of the Supply Department at the instructions of Sub Divisional Magistrate, Puwayan, Shahjahanpur. Several other biodiesel pumps of the petitioner of first writ petition situated at Maqsoodapur and Bandaa were sealed on 15th February, 2008. The biodiesel pump of the petitioner of second writ petition was stopped by the district authorities, hence a writ petition being Writ Petition No. 31726 of 2008 was filed. This Court disposed of the writ petition vide its judgment and order dated 5th August, 2008 directing the representation to be considered by the District Magistrate, Shahjahanpur. The District Magistrate, Shahjahanpur considered the representation and rejected the same. The District Magistrate in the order referred to the letter of the State Government dated 13th March, 2008 and held that the directions issued having not been complied with as the petitioners have not got their product approved by the Oil Company, they are not entitled for retail sale of biodiesel. The order passed by the District Magistrate dated 22nd October, 2008 has been challenged in the second writ petition. In the third writ petition, it is stated that on 3rd December, 2008 inspection was made and the dispensing units were sealed. In the first writ petition, following reliefs have been claimed:

"(i) issue a writ, order or direction in the nature of mandamus directing the respondent authorities to break open the seal and permit the petitioner to continue with the sale of BioDiesel.

(ii) issue a writ, order or direction in the nature of mandamus directing the respondents to permit the petitioner for distribution of BioDiesel from its filling stations."

Petitioners'' case in the writ petition is that no licence is required for manufacture and sale of biodiesel. Biodiesel not being a petroleum product, the provisions of the Petroleum Act, 1934 as well as the Uttar Pradesh High Speed Diesel Oil and Light Diesel Oil (Maintenance, Supply and Distribution) Order, 1981 are not applicable. It is submitted that biodiesel is also not covered under the Explosive Act, 1884 and no permission under the Explosive Act, 1884 is required. The case of the petitioners further is that units have been sealed without giving any opportunity to the petitioners to show cause.

Counter affidavits have been filed in first writ petition by Union of India (respondent No. 7), Staterespondents No. 1 to 6 and on behalf of the Indian Oil Corporation. The Union of India in the counter affidavit dated 13th August, 2008 has stated that Ministry of Petroleum and Natural Gas has issued a BioDiesel Purchase Policy, 2005 with effect from 1st January, 2006, which requires biodiesel manufactures interested in supplying biodiesel to public sector Oil Manufacturing Companies should approach the State Level Coordinator (SLC) pertaining to the State, and after assessment of production capacity and credibility of the prospective supplier by joint evaluation certification by the industry team, the sample would be tested and if these meet the prescribed specifications, the supplier shall be registered as an authorised supplier. Reliance has also been placed on the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. The Staterespondents in their counter affidavit have relied on BioDiesel Purchase Policy, 2005 and have come up with the case that the petitioners having selling their products by violating the directions contained in the said Policy, hence their pumps were sealed. In the counter affidavit filed by the Indian Oil Corporation, it is submitted that biodiesel does not contain petroleum but it can be blended with petroleum diesel to create a biodiesel blend. Reference to the Biological Diversity Act, 2002 has also been made in the counter affidavit. It has further been mentioned that as per Section 7 of the Biological Diversity Act, 2002 prior intimation is to be given to State Biodiversity Board for obtaining biological resource for certain purpose. It is stated that petitioner is trying to manufacture biodiesel without taking any permission from any authority and without testing its quality by any Government authority and without taking licence. It has been stated that selling of biodiesel by the petitioners is a wrongful act and the petitioners have rightly been stopped by the Stateauthorities. In the rejoinder affidavit filed by the petitioners stand taken in the writ petitions has been reiterated. Referring to BioDiesel Purchase Policy, it has been stated that the said policy is merely a policy and further action is yet to be taken by the Ministry of Petroleum and Natural Gas, Government of India. It is stated that after the Purchase Policy, 2005 the Central Government is yet to formulate and enact a statute, rule or regulation so as to create an embargo on the petitioners for regulating the sale and purchase of the biodiesel. It is submitted that no permission is required from the District Magistrate, Central Government or the Oil Company nor the petitioners are prohibited from doing their business under any Act or Statute.

Learned counsel for the petitioners in support of their writ petitions, have contended that there being no statutory regulation regulating the manufacture and sale of biodiesel, the act of the State authorities in sealing the biodiesel pumps is without any authority of law and the same violates the rights of the petitioners guaranteed under Article 19(1)(g) of the Constitution of India. It is contended that no restriction on carrying a trade or business as guaranteed under Article 19(1 )(g) of the Constitution of India can be imposed without their being any law. Learned counsel for the petitioners have placed reliance on the judgments of the Apex Court reported in (2007)11 S.C.C. 641, Doiwala Sehkari Shram Samvida Samiti Ltd. v. State of Uttaranchal and others and (2008) 8 S.C.C. 205, Ritesh Agarwal and another v. Securities and Exchange Board of India and others.

Dr. R.G. Padia, learned Senior Advocate appearing for the Indian Oil Corporation, has fairly conceded that provisions of Petroleum Act, 1934 are not applicable. He, however, contended that BioDiesel Purchase Policy, 2005 is fully applicable and no manufacture of biodiesel or sale of biodiesel can be permitted in breach of the Purchase Policy, 2005 of the Central Government. Learned counsel for the respondents have referred to and relied on the Biological Diversity Act, 2002 and contended that no intimation has been sent under Section 7 of the 2002 Act nor any permission has been granted by the State Biodiversity Board to the petitioners for manufacture. He submits that biodiesel, which is now being developed as an alternate fuel for vehicles cannot be allowed to be manufactured without there being any regulation and the regulation made by the Central Government by announcing the Biodiesel Purchase Policy is a reasonable restriction and the petitioners having admittedly not followed any of the directions under the said Policy, they are not entitled to manufacture or sale biodiesel.

We have considered the submissions of learned counsel for the parties and have perused the record.

The biodiesel is manufactured from virgin and used vegetable oil (both edible and nonedible) and animal fats. The main commodity sources for biodiesel in India can be nonedible oils obtained from plant species such as Jatropha curcas (Ratanjyot), Pongamia pinnata (Karanj), Calophyllum inophyllum (Nagchampa), Hevcca brasiliensis (Rubber) etc. Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend or can be used in its pure form. Just like petroleum diesel, biodiesel operates in compression engine; which essentially require very little or no engine modifications because biodiesel has properties similar to petroleum diesel fuels.

The Petroleum Act, 1934 defines the petroleum in Section 2(a). Sections 2(b), 2(bb) and 2(bbb) defines petroleum Class A, petroleum Class B and petroleum Class C. The flash point of petroleum Class C is below 93 degree centigrade. The petitioners'' specific case in the writ petition is that flash point of biodiesel is 125 degree centigrade, hence it is not covered by petroleum. Learned counsel appearing for the Indian Oil Corporation has not seriously disputed the submission of the petitioners that biodiesel is not a petroleum product. Learned counsel for the Union of India in the counter affidavit has referred to and enclosed order dated 19th December, 2005 issued by the Central Government in exercise of power conferred by Section 3 of the Essential Commodities Act, 1955, namely, the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. Clause 2 subclause (e) and subclause (g) define ''high speed diesel'' and ''motor spirit'', which are quoted as below:

"2(e) "high speed diesel" means any hydrocarbon oil, excluding mineral cloza oil and turpentine substitute, which meets the requirements of Bureau of Indian Standards specification number IS1460.

2(f).......

2(g) "motor spirit" means any hydrocarbon oil, excluding crude mineral

which meets the requirement of Bureau of Indian Standards specification number IS2796."

Subclause (e) defines ''high speed diesel'' as any hydrocarbon oil, which meets the requirement of Bureau of Indian Standards specification number IS1460, similarly subclause (g) defines ''motor spirit'' as any hydrocarbon oil, which meets the requirement of Bureau of Indian Standards specification number IS2796. The aforesaid specification numbers have not been brought on the record to enable the Court to express any concluded opinion with regard to applicability of 2005 Order as claimed by the respondents. However, Clause 6 of the 2005 Order refers to blending of motor spirit and high speed diesel with biodiesel. Clause 6 of the 2005 order is quoted as below:

"6. Supply of motor spirit and high speed diesel blended with ethanol and biodiesel

The Central Government may by an order, make it mandatory to supply motor spirit and high speed diesel blended with a specified quantity of anhydrous ethanol and or biodiesel in the whole or any part of the territory of I a State or whole of the territory of the Indian Union."

Thus without expressing any conclusive opinion, we proceed to examine the case on the premise that 2005 Order is not applicable on the petitioner.

In the counter affidavit filed by the State as well as by the Union of India reliance and reference has been made to the Biodiesel Purchase Policy of the Central Government, which has been enforced with effect from 1st January, 2006. A copy of the said Purchase Policy, 2005 has been brought on the record along with the counter affidavit of the State as well as in the rejoinder affidavit dated 25th March, 2008 filed by the petitioners. Paragraphs 1.1,1.2,4.1 and 4.2, which are relevant for the purpose, are quoted below:

"1.1 The Ministry of Petroleum & Natural Gas is committed to taking forward the National Common Minimum Programme (NCMP) of the Government of India, stretching across the various focus areas identified therein, while ensuring the basic principle for governance of economic reforms with a human face. The Ministry is inter alia committed to meeting the social objectives of NCMP and enhancing energy security. One of the critical elements for achieving the objective of energy security is the development of alternative sources of energy including biofuels. The Ministry of Petroleum and Natural Gas is already implementing a five per cent ethanolblended petrol programme, which is designed to support the agriculture and the rural sector. There is now an increased awareness about biodiesel, a diesel fuel substitute, which can be made from virgin or used vegetables oils and animal fats.

1.2 Biodiesel is an environment friendly fuel, which has almost no sulphur, no aromatics and has about 10% builtin oxygen. Biodiesel needs no separate infrastructure for storage and dispensing and the existing tankage and dispensing stations of conventional diesel can be used. Biodiesel is safe to handle and the flash points of biodiesel are higher than conventional diesel. Blending of biodiesel with diesel would result in the reduction of unburnt hydrocarbons, Carbon Monoxide and particulate matter in auto emissions and will be in line with the objectives of the Auto Fuel Policy of the Government.

1.3..............................

1.4..............................

4.1 It is imperative that the biodiesel offered for blending in diesel is of standard quality. Therefore, it would be necessary that only those biodiesel manufacturers who get their samples approved and certified by the oil companies and get registered as authorised suppliers would be eligible for assured purchase of the product. Also, the biodiesel purchase centres should be equipped with minimum testing facilities for ensuring purchase of biodiesel of requisite specification.

4.2 Subject to the above requirement, in recognition of the synergy and spinoff effect that announcing a biodiesel purchase policy will have on the rural economy, the Ministry of Petroleum and Natural Gas hereby resolves to introduce a biodiesel purchase policy as follows:

(i) With effect from 1.1.2006, the public sector oil marketing companies shall purchase, through its select purchase centres, biodiesel (B100), which meet the fuel quality standard prescribed in the Bureau of Industrial Standards (BIS) specification formulated vide PCD 3 (2242) Coated 26.7.2004, and as may be notified and modified from time to time. The oil marketing companies shall make available the comprehensive industry guideline "Operations, Quality and Safety Manual on BiodieselHSD B100 and HSDBOSmax" for information and guidance of the biodiesel industry.

(ii) The purchase centres have been identified in consultation with the oil marketing companies, viz. the Indian Oil Corporation (Interim order already granted shall continue). Hindustan Petroleum Corporation (HPC) and Bharat Petroleum Corporation (BPC), on the basis of availability of minimum testing facilities for B100 and for blending in HSD to the extent of five per cent. Depending on response, felt need, and preparedness in testing and accepting biodiesel, more purchase centres would be identified subsequently.

Sr.No. State Location

1 Andhra Pradesh Ghatkesar(HPC)

2 Chattisgarh Mandirhasaud (HPC)

3 Delhi Bijwasan (IOC)

4 Gujarat Kandia (BPC)

5 Haryana Rewari(IOC)*

6 7 Karnataka Devanagunthi (Bangalore) (IOC) Mangalore (IOC)

8 Madhya Pradesh Mangliagaonlndore (IOC)

9 10 11 12 Maharashtra Manmad (BPC), Borkhedi Nagpur (BPC), Loni(HPC), Vashi(HPC)*

13 Punjab Bhatinda (IOC)

14 15 Rajasthan SanganierJaipur (BPC) Salawas(HPC)

16 17 18 Tamilnadu Korrupet(Chennai(IOC) Narimanam (IBP) Karur(BPC)*

19 20 Uttar Pradesh Panki (IOC) (also for Uttaranchal State) AmousiLucknow (IBP)*

*To be upgraded for carrying out full specification tests for BIS standard.

(iii) Biodiesel manufacturers interested in supplying biodiesel to public sector oil marketing companies should approach the State Level Coordinator (SLC) pertaining to the State, and after assessment of production capacity and credibility of the prospective supplier by joint evaluation certification by the industry team, samples would be tested and if these meet the prescribed BIS specifications, the supplier shall be registered as an authorized supplier.

(iv) In normal course, the registration shall be revalidated after a year. However, if either the feedstock used or the process of manufacturing biodiesel is altered, revalidation of registration shall be necessary immediately.

(v) In registering authorised suppliers of biodiesel, priority shall be given to such biodiesel producers who propose to use nonedible tree borne oils as feedstock for producing biodiesel and have undertaken or have committed themselves to support farming of oil bearing plants with a view to using only treeborne nonedible oil for manufacture of biodiesel in future.

(vi) The oil marketing companies shall buy biodiesel (B100) which meets the prescribed BIS standard at a uniform price, as may be decided by the oil marketing companies from time to time, depending on market conditions. Such a uniform price shall be inclusive of any taxes and duties and transportation cost for delivery of biodiesel at the purchase centre. The uniform price once fixed shall be in operation for six months at the end of which it would be reviewed. The initial purchase price of biodiesel by the oil marketing companies will be Rs. 25 per litre. The registered authorised biodiesel manufacturers shall be required to deliver B100 at the notified purchase centres in calibrated tank trucks of capacity not less than 10KL. In case the suppliers envisage any deviation, they should inform the concerned oil company and supply as per mutual convenience.

(vii) The supplier should give schedule of supplies that can be made during the ensuing month to SLC of the State by 15m of the previous month.

(viii) All expenses related to testing of the biodiesel for acceptance of the consignment shall be borne by the oil marketing companies. Every consignment shall be tested for the following specifications:

� Density @ 15 degree C.

� Kinematic Viscosity @ 40 degree C

� Flash Point

� Water Content

� Copper corrosion, and

� Acid value

(ix) In accordance with the provisions of Article 243G of the Constitution, read with Article 243ZD, Panchayati Raj Institutions may, in consultation with the National Oilseeds and Vegetable Oils Development Board, the Ministry of Biotechnology and the National Botanical Research Institute, who are working on a network programme for making available good quality seed and tissue culture for oil bearing trees including Jatropha, prepare and consolidate plans for the cultivation of oil bearing trees. Such Panchayati Raj Institutions may also consolidate plans for collection of seeds and transporting them to oil extraction units, and pose such plans at village, intermediate, and district level to entrepreneurs in the private sector who, either on their own or through joint ventures including such joint ventures with the Panchayati Raj Institutions themselves would undertake production of biodiesel as Rural Business Hub (RHB) activity.

(x) The Petroleum Conservation and Research Association (PCRA), in association with the Ministry of Panchayati Raj and State Governments will conduct mass awareness programmes on plantation of Jatropha etc, collection of seeds and extraction of oil for the production of biodiesel. Such awareness programmes shall be conducted through and in association with Panchayati Raj Institutions at appropriate levels through such means as workshops seminars kisan melas, and electronic and print media in local languages.

(xi) R&D studies and field trials shall continue to be conducted for developing data on increasing biodiesel content in a systematic manner and be coordinated by the Research and Development Division of Indian Oil Corporation Limited with the aim of achieving maximum blending of biodiesel up to 20% in diesel. For this purpose, experience of other countries would be studied both at the commercial level and through diplomatic channels, under various bilateral and multilateral initiatives as well as Government understandings/agreements.

(xii) Progress of the implementation of the biodiesel purchase policy by the oil marketing companies will be monitored by the Petroleum Policy and Analysis Cell (PPAC) and PPAC will report the progress to the Ministry of Petroleum and Natural Gas on a regular basis.

The submission, which has been pressed by learned counsel for the petitioners is that at best the BioDiesel Purchase Policy, 2005 is only a policy decision and is not a law within the meaning of Article 19(1)(g) of the Constitution of India. Article 19(1)(g) of the Constitution of India is quoted below :

"19. Protection of certain rights regarding freedom of speech, etc. (1) All citizens shall have the right ..

(a) ............................

(b) ............................

(c) ......................... ,.

(d) ............................

(f) .............. ..............

(g) to practice any profession, or to carry on any occupation, trade or business."

Learned counsel for the petitioners has relied on the judgment of the Apex Court in Doiwala Sehkari''s case (supra). Paragraph 21 of the said judgment is quoted below :

"21. It is thus seen that under the above amended rule, the rights of the Government to get the mining activities done by the government departments, government corporations, etc. was not affected. The rights of the Government, as already noticed, mining trade in respect of the minor minerals and lease is regulated'' by Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 under which the State Government has been empowered to make rules to give effect to the provisions of the Act. There is no restriction under the Act that the minor minerals lease would be confined to State or its agencies and as such the policy decision of the State of Uttaranchal which creates an embargo on the right of the appellant is (sic not) ultra vires the provisions of the 1 957 Act and the Rules. The right to trade is guaranteed under Article 19(6) of the Constitution of India and that can only be regulated by means of a valid law and not by notification, which has been done by the State of Uttaranchal in the present case. It is also seen from the Notification dated 30.4.2001 that it did not deprive the appellants'' right of consideration of his application as no monopoly or right was created excluding any private person."

Another judgment relied by the learned counsel for the petitioners is Ritesh Agarwal''s case (supra) in which following was laid down in paragraph 25:

"25......Acitizen of India has a right to carry on a profession or business as envisaged by Article 19(1 )(g) of the Constitution of India. Any restriction imposed thereupon must be made by reason of law contemplated under clause (6) thereof. In the absence of any valid law operating in the field, there would not be any source for imposing penalty. A right to carry on trade is a constitutional right. By reason of the penalty imposed, the Board inter alia has taken away the said constitutional right for a period of ten years which, in our opinion, is impermissible in law as the Regulations were not attracted."

There cannot be any dispute that a citizen of India has freedom to carry on a profession or business and restriction on such right can be enforced by a law as contemplated under Article 19(6) of the Constitution of India. The issue, which is to be answered in the present case, is as to whether Biodiesel Purchase Policy, 2005, which has been made basis for taking action against the petitioners, is backed by any law.

The Parliament had enacted the Essential Commodities Act, 1955 for control of production, supply and distribution of, and trade and commerce in, certain commodities. Section 2 of the Essential Commodities Act, 1955 include foodstuffs, including edible oilseeds and oils and petroleum and petroleum products. Various orders have been issued by the Central Government in exercise of its power under Section 3 for regulating the petroleum products, edible oilseeds and oils.

The Parliament had enacted the Biological Diversity Act, 2002 to provide for conservation of biological diversity, sustainable use of its components and fair and equitable sharing of the benefits arising out of the use of biological resources, knowledge and for matters connected therewith or incidental thereto. The Act was the result of various international convention held on biological diversity to which India was also a signatory. The international community fully conscious of the value of biological diversity and of the ecological genetics reaffirmed the responsibility of the State for conserving their biological diversity and .for using their biological resources in a sustainable manner. The definition of ''biological resources'' is contained in Section 2(c) of the 2002 Act, which is quoted below:

"2(c) "biological resources" means plants, animals and microorganisms or parts thereof, their genetic material and byproducts (excluding value added products) with actual or potential use or value but does not include human genetic materials."

Section 2(f) defines "commercial utilization", which is quoted as below:

"2(f) "commercial utilization" means end use 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."

The present is a case where the petitioner (Gomti Biotech Limited) is claiming its right to utilise biological resources for commercial purposes claiming it to be uncontrolled and unregulated. As noticed above, the biodiesel has now been developed as alternative fuel for vehicle and is being developed and marketed throughout the world. The biodiesel, as noticed above, is manufactured from vegetables oil, edible and nonedible. The 2002 Act has been enacted with the object of conservation of biological diversity and for sustainable use of it. The control of a biological resource and its equitable distribution are the objects of parliamentary enactment. The question now is to be considered is as to whether the 2002 Act provides for any kind of regulation or control on commercial use of biological resources. The biological resources are plants, vegetable oil (edible and nonedible), which are grown.on the plants are fully covered by the definition of biological resources under Section 2(c) of the 2002 Act. The control over biological resources has to be for the purpose and object. In case it is permitted that vegetable oils (edible and nonedible) be allowed freely to be used for manufacturing of biodiesel, there shall be imbalance in the equitable sharing of the benefits and the fair distribution. It is for the Government to take appropriate measures and steps for control of biological resources. It is true that the Government policy is to encourage manufacture of biodiesel but manufacture, its sale and distribution has to be controlled as per the policy of the Government. In this context reference is made to Section 36 of the 2002 Act, which is to the following effect:

"36, Central Government to develop National strategies, plans, etc., for conservation, etc., of biological diversity.1) The Central Government shall develop national strategies, plans, programmes for the conservation and promotion and sustainable use of biological diversity including measures for identification and monitoring of areas rich in biological resources, promotion of in situ and ex situ conservation of biological resources, incentives for research, training and public education to increase awareness with respect to biodiversity.

(2) Where the Central Government has reason to believe that any area rich in biological diversity, biological resources and their habitats is being threatened by overuse, abuse or neglect it shall issue directives to the concerned Sate Government to take immediate ameliorative measures, offering such State Government any technical and other assistance that is possible to be provided or needed.

(3) The Central Government shall, as far as practicable wherever it deems appropriate, integrate the conservation, promotion and sustainable use of biological diversity into relevant sectoral or crosssectoral plans, programmes and policies.

(4) The Central Government shall undertake measures,

(i) wherever necessary, for assessment of environmental impact of that project which is likely to have adverse effect on biological diversity, with a view to avoid or minimise such effects and where appropriate provide for public participation in such assessment;

(ii) to regulate, manage or control the risks associated with the use and release of living modified organisms resulting from biotechnology likely to have adverse impact on the conservation and sustainable use of biological diversity and human health.

(5) The Central Government shall endeavour to respect and protect the knowledge of local people relating to biological diversity, as recommended by the National Biodiversity Authority through such measures, which may include registration of such knowledge at the local, State or national levels, and other measures for protection, including sui generis system.

Explanation.For the purposes of this section,

(a) "ex situ conservation" means the conservation of components of biological diversity outside their natural habitats;,

(b) "in situ conservation" means the conservation of ecosystems and natural habitats and the maintenance and recovery of viable population of species in their natural surroundings and, in the case of domesticated or cultivated species, in the surroundings where they have developed their distinctive properties."

Section 36 of the 2002 Act as quoted above, empowers the Central Government to develop National strategies, plans etc. for conservation of biological diversity. When the Central Government has declared a Biodiesel Purchase Policy, 2005, the said purchase policy is thus clearly referable to power under Section 36 of the 2002 Act and the Biodiesel Purchase Policy, 2005 is thus clearly referable to statutory source of power and the submission of the petitioner that Biodiesel Purchase Policy has no statutory backing cannot be accepted;

The biodiesel suppliers have been put to certain regulation and restrictions with regard to their product. As noticed above, under the Control Order, 2005 Central Government can direct for blending of biodiesel with high speed diesel. The biodiesel manufactured by the biodiesel manufacturers has to be regulated as per the Biodiesel Purchase Poiicy. The biodiesel manufacturer according to the Purchase Policy are required to get their sample approved and certified by the Oil Companies, get them registered with authorised supplier and should be equipped with minimum testing facilities for ensuring purchase of biodiesel of requisite specification. The above mentioned restrictions are for the public interest. Under the Biodiesel Purchase Policy the oil marketing companies are obliged to purchase the biodiesel from selected purchase centre, which meet the fuel quality standard prescribed. The oil purchase companies thus have to approve and certify the manufacturers for purposes of purchase. It is true that Biodiesel Purchase Policy does not contemplate monopoly in favour of the oil companies with regard to purchase of biodiesel from manufacturers but purchase by the oil company from manufacturers being contemplated, the manufacturers cannot claim to be out of restrictions and regulations as contained in the Biodiesel Purchase Policy declared under Section 36 of the 2002 Act.

24.''We, however, make it clear that in the event the biodiesel manufacturers including the petitioners follow the restrictions and the regulations as contained in the biodiesel purchase policy as applicable from time to time, there shall be no undue interference in their right to carry on trade and business of biodiesel till appropriate statutory regulations are framed for the purpose.

In the counter affidavit filed by the State the reason for sealing of the dispensing units is the Biodiesel Purchase Policy with effect from 1.1.2006. The counter affidavit filed by the State does not refer to any other basis except the restrictions contained in the Biodiesel Purchase Policy of the Central Government.

In view of the foregoing discussions, it is clear that no error has been committed by the State authorities in stopping the dispensing units of the biodiesel of the petitioners from running without following the restrictions and directions contained in the Biodiesel Purchase Policy, 2005 of the Central Government. The relief claimed by the petitioners in the writ petitions cannot be granted. It shall, however, be.open for the petitioners to get their product approved and certified by the Oil Company and get themselves registered for supplying the biodiesel as per the specification after following the orders issued by the Central Government in this regard from time to time.

All the writ petitions are disposed of with the aforesaid observation.