T.N Godavarman Thirumulpad (104) v. Union Of India And Others

Order

1. It is an undisputed fact that the forest in this country is an important and vital component to sustain the life support system on this planet. For various reasons, our forest is being slowly depleted. At the same time, as part of our developmental activities, some areas of the forest have to be used for non-forest purposes. The economic development shall not be at the cost of complete degradation of the forest or the environment and ecosystem provided by the green area of the forest. Therefore, it was considered whether the user agency of such land which is required for developmental activities to compensate for the diversion of the forest and on the recommendations of the Central Empowered Committee (hereinafter being referred to as “cec”), it was decided by this Court that the user agency shall be required to make payment of the net present value (npv) of such diverted land so as to utilise this for getting back in the long run which are lost by such diversion.

2. A scheme was submitted by Ministry of Environment and Forests (MoEF) along with an affidavit dated 22-3-2002. Cec considered all relevant aspects including the scheme submitted by MoEF and filed a report on 9-8-2002. These reports were accepted by this Court. This Court in T.N Godavarman Thirumulpad (87) v. Union of India (2006) 1 SCC 1 finally directed that the question as to what amount of npv is required to be paid and to achieve these objectives, it was directed that the question is to be examined by experts.

3. A committee comprising of three experts including Mrs Kanchan Chopra was appointed and this Court gave the following directions:

(i) To identify and define parameters (scientific, biometric and social) on the basis of which each of the categories of values of forest land should be estimated.

(ii) To formulate a practical methodology applicable to different biogeographical zones of India for estimation of the values in monetary terms in respect of each of the above categories of forest values.

(iii) To illustratively apply this methodology to obtain actual numerical values for different forest types for each biogeographical zone in the country.

(iv) To determine on the basis of established principles of public finance, who should pay the costs of restoration and/or compensation with respect to each category of values of forests.

(v) Which projects deserve to be exempted from payment of npv.

4. On the basis of the directions issued by this Court, a committee consisting of Mrs Kanchan Chopra gave a report and the same was examined by cec.

5. The report contains detailed study of the relevant factors. The Forest Survey of India has since last two decades been undertaking forest cover mapping of the country using satellite data obtained by NRSA, Hyderabad. The methodology of mapping involves the georectification of the satellite imagery using the Survey of India toposheets followed by the digital interpretation of the same and extensive ground truthing. It was found that the forest cover maps depict mainly three tree canopy density classes viz. very dense, moderately dense and open. There were other classifications in the Forest of India and “Champion and Seth” have classified the forests of India into 16 major groups. The major basis of classification included the climate, the soil and the past treatment as these factors determine the vegetation type of a given locality.

6. Cec has classified the forest taking in view the ecological role and value of the forests and for the purpose of the report, 16 major forest types have been further grouped into 6 ecological classes depending upon their ecological functions:

Eco-Class I Consisting of tropical wet evergreen forests, tropical semi-evergreen forests and tropical moist deciduous forests Eco-Class II Consisting of littoral and swamp forests Eco-Class III Consisting of tropical dry deciduous forests Eco-Class IV Consisting of tropical thorn forests and tropical dry evergreen forests Eco-Class V Consisting of subtropical broad-leaved hill forests, subtropical pine forests and subtropical dry evergreen forests Eco-Class VI Consisting of montane wet temperate forests, Himalayan moist temperate forests, Himalayan dry temperate forests, subalpine forest, moist alpine scrub and dry alpine scrub

7. Based on the ecological importance of forest falling in different eco-value and canopy density classes, relative weightage factors have also been taken into consideration. By using these relative weightage factors, the equalised forest area in eco-value Class I and very dense forest corresponding to forest falling in different eco-value and density classes have been compiled. For example, 17,997 sq km of open forest of Eco-Class IV has been calculated to be equivalent to 7558 sq km of very dense forest of eco-value Class I. Accordingly, the entire forest area of the country has been calculated and found to be equivalent to 5.2 lakhs sq km forest area having highest ecological significance as that of forest falling in eco-value Class I with density above 70%.

8. The net present value per hectare of forest has been fixed based on this data. For calculating the average net per cent value per hectare of forest in India, the following monetary value of goods and services provided by the forest have been considered:

(i) Value of timber and fuel wood

(ii) Value of non-timber forest products (NTFP)

(iii) Value of fodder

(iv) Value of eco-tourism

(v) Value of bio-prospecting

(vi) Value of ecological services of forest

(vii) Value of flagship species

(viii) Carbon sequestration value

9. Based on this, npv was fixed and the following recommendations have been made:

(i) for non-forestry use/diversion of forest land, npv may be directed to be deposited in the Compensatory Afforestation Fund as per the rates given below:

Eco-value class Very dense forest Dense forest Open forest Class I 10,43,000 9,39,000 7,30,000 Class II 10,43,000 9,39,000 7,30,000 Class III 8,87,000 8,03,000 6,26,000 Class IV 6,26,000 5,63,000 4,38,000 Class V 9,39,000 8,45,000 6,57,000 Class VI 9,91,000 8,97,000 6,99,000 (in Rs per hectare)

(ii) the use of forest land falling in national parks/wildlife sanctuaries will be permissible only in totally unavoidable circumstances for public interest projects and after obtaining permission from the Hon'ble Court. Such permissions may be considered on payment of an amount equal to ten times in the case of national parks and five times in the case of sanctuaries respectively of npv payable for such areas. The use of non-forest land falling within the national parks and wildlife sanctuaries may be permitted on payment of an amount equal to npv payable for the adjoining forest area. In respect of non-forest land falling within marine national parks/wildlife sanctuaries, the amount may be fixed at five times the npv payable for the adjoining forest area;

(iii) these npv rates may be made applicable with prospective effect except in specific cases such as Lower Subhanshri Project, mining leases of SECL, field firing ranges, wherein pursuant to the orders passed by this Hon'ble Court, the approvals have been accorded on lump sum payment/no payment towards npv; and

(iv) for preparation and supply of district-level maps and GPS equipments to the State/UT Forest Departments concerned and the regional offices of the MoEF, the Ad-hoc CAMPA may be asked to provide an amount of Rs 1 crore to the Forest Survey of India out of the interest received by it.

10. The Ministry of Environment and Forests also has filed its response and has accepted the recommendations made by cec. Various user agencies have filed its objections. We heard the learned Senior Counsel Mr Nariman and other learned Senior Counsel who appeared before us. The main contention raised is that npv was fixed on the basis of the net flow accruing over 20 years at a 5% social discount rate. This, according to the applicants, is too low. It has been contended that the Economic and Research Department of Asian Development Bank is of the view that a survey of the social discount rate policies of individual countries show significant variations and the developing countries apply higher social discount rate. The paper published by Asian Development Bank shows that India should have a social discount rate of 12%.

11. It may be noted that the expert committee under the leadership of Mrs Kanchan Chopra recommended 5% social discount rate but cec has reduced further and accepted 4% social discount rate. It may be noted that cec had made consultation with eminent economists and it was of the view that the social discount rate should be around 2% in India. We do not find much force in the contention advanced by the learned counsel who appeared for the user agencies. The 10% suggested by them cannot be applied to the present case because 10% is the rate linked to assumptions about the opportunity cost of capital. One cannot apply that rate for social time preference in evaluating the benefits from an environmental resource such as forests. In project evaluation, the horizon is compatible with the life of the project whereas in forest matters, the horizon spans over several generations. Therefore, the rate of 10%, as suggested by the user agencies cannot be accepted.

12. Another contention raised by the applicant (FIMI) is that npv is not fixed on site specific and, therefore, the fixation of the rate is based on surmises and conjectures and the same rate cannot be applied to the large extent of area covered by the forests. This question was elaborately considered by cec. Considering the large extent of this country and the forest being spread over in various parts of the State, it is difficult to fix npv based on the specific area. It is not feasible to fix npv is each and every individual case. The entire forest area in each of the State/UT is calculated by considering the monetary value of the services provided by it. The average npv per hectare of the forest area in the State has also been calculated. If npv is to be calculated on the specific area, the process would be time-consuming and in most of the cases, it may be beyond the capability of the Range Forest Officers or other officials posted at the grassroots level. Moreover, npv is linked with the type of the forest and no useful purpose would be served by carrying out npv calculations in each case involving the diversion of forest areas.

13. We are of the view that npv now fixed is more scientific and is based on all available data. We accept the recommendations and we make it clear that the npv rate now fixed would hold good for a period of three years and subject to variation after three years. The following exemptions have been recommended:

*[Category CEC (i) Schools Full exemption up to 1 ha of forest land provided: (ii) Hospitals (a) no felling of trees is involved; (iii) Children's playground of non-commercial nature (b) alternate forest land is not available; (iv) Community centres in rural areas (c) the project is of non-commercial nature and is part of the plan/non-plan scheme of the Government; and (v) Overhead tanks (d) the area is outside national park/sanctuary (vi) Village tanks (vii) Laying of underground drinking water pipeline up to 4 (sic) diameter and (viii) Electricity distribution line up to 22 kV in rural areas Relocation of villages from the national parks/sanctuary to alternate forest land Full exemption Collection of boulders/silts from the river belts in the forest area : Full exemption, provided (a) area is outside national park/sanctuary; (b) no mining lease is approved/signed in respect of this area; (c) the works including the sale of boulders/silt are carried out departmentally or through government undertaking or through the Economic Development Committee or Joint Forest Management Committee; (d) the activity is necessary for conservation and protection of forests; and (e) the sale proceeds are used for protection/conservation of forests Laying of underground optical fibre cable Full exemption, provided: (a) no felling of trees is involved; and (b) areas fall outside national park/sanctuary Pre-1980 regularisation of encroachments and conversion of forest villages into revenue villages. Full exemption, provided these are strictly in accordance with MoEF's guidelines dated 18-9-1990 Underground mining 50% of the NPV of the entire area]

14. The above recommendations for exemptions are accepted. If, in any case, exemption is required by nature of the peculiar circumstances of the case, the same would be decided as and when necessary on a case-to-case basis.