M/S Madhu Industries vs. The State Of Karnataka

Held

The Court held that it is an undisputed fact that the petitioners have been running plywood veneer businesses for the last two to three decades and continue to do so. The Court acknowledged that the respondents are interfering with the petitioners' business due to the amendment to the Karnataka Forest Rules, 1969. Specifically, Rule 2(6-C), inserted by Notification No.FEE 65 FDP 2012 dated 20.05.2013, defines 'Sawmill and any other sawing contrivances' to include veneer mills/industries, requiring a license. The Court noted that the amendment does not prescribe a time limit for filing such applications. Consequently, the Court permitted the petitioners to submit their representation for a license to the second respondent within two weeks of receiving the order. The competent authority was directed to consider these applications and pass appropriate orders within four weeks thereafter. Until the applications are considered, the respondents were restrained from taking any precipitative action, including the closure of the petitioners' industries. The ratio decidendi is that while amendments to forest rules necessitate compliance, authorities must allow a reasonable period for existing businesses to apply for and obtain the required licenses, and should not resort to immediate closure.

Facts

The petitioners, operating plywood and veneer industries for two to three decades in Mysuru District, filed writ petitions seeking a direction to the respondents (State of Karnataka, Deputy Conservator of Forest, and Chief Conservator of Forest) to consider their applications for licenses. They also sought a stay on any precipitative action, including closure, until their applications were considered. The petitioners had obtained various registrations, including GST, and land conversion for industrial purposes. Their grievance arose when respondents began insisting on licenses, citing an amendment to Rule 2(6) of the Karnataka Forest Rules, 1969, which included plywood and veneer industries within the definition of sawmills, thus requiring them to obtain licenses.

Key Issues

1. Whether the respondents' action in insisting on licenses for plywood and veneer industries, based on an amendment to the Karnataka Forest Rules, 1969, is arbitrary and illegal, particularly considering the petitioners' long-standing operation without prior license requirements? (Question of law and fact, concerning the interpretation and application of the Karnataka Forest Rules, 1969). Petitioner's contention: The proposed action of closing down their industries is arbitrary and illegal as they were unaware of the amendment. They have been operating lawfully for decades and are now willing to apply for the necessary license. Reliance was placed on their long period of operation and existing registrations. Revenue's contention: The petitioners have not provided any material to substantiate the alleged interference by the respondents. In light of the amendment to the Karnataka Forest Rules, 1969, the petitioners are mandated to obtain a license to conduct their business.