Share Profits With Local Communities Under Biodiversity Act: Uttarakhand HC to Baba Ramdev’s Divya Pharmacy [Read Judgment]

The Uttarakhand High Court has directed Divya Pharmacy, owned by Baba Ramdev and Acharya Balkrishna, to share its profits with local and indigenous communities, as part of the Fair and Equitable Benefit Sharing (FEBS) objectives of the Biodiversity Act, 2002.

Justice Sudhanshu Dhulia upheld the order passed by the Uttarakhand Biodiversity Board (UBB) and affirmed the powers of the State Biodiversity Board (SBB) to impose FEPB, ruling, “… this Court is of the opinion that SBB has got powers to demand Fair and Equitable Benefit Sharing from the petitioner, in view of its statutory function given under Section 7 read with Section 23 of the Act and the NBA has got powers to frame necessary regulations in view of Section 21 of the Act.”

Divya Pharmacy had essentially contended that the requirement for sharing revenue with the local and indigenous communities only arises for entities with some kind of “foreign element” attached to them. To this end, it had relied on a combined reading of Sections 2 (g) and 3 of the Biodiversity Act.

While Section 2(g) stipulates that the National Biodiversity Authority may determine the FEBS to be paid, Section 3 states that only entities with a foreign element require permission from the National Biodiversity Authority for undertaking biodiversity-related activities.

Submitting that it was an Indian company, it had therefore contended that only foreign entities using biological resources can be made to share profits/pay fees under the head of FEBS.

It had further pointed out that Indian entities are regulated by the SBB under Section 7 of the Biodiversity Act, which requires such entities to undertake activities involving the use of ‘biological resources’ only after intimating about the same to the SBB.

The question now posed before the court was whether FEBS can be imposed on an Indian company by the SBB.

Answering the question in the positive, the high court began by advocating for a broad and purposive interpretation of the provisions of the Act. It observed, “A simple textual interpretation as submitted by the petitioner would indeed show that the petitioner which is not a foreign entity is not liable to contribute to FEBS and the powers to impose FEBS lie only with the NBA. But then a plain and textual interpretation here defeats the very purpose, for which the law was enacted!”

It added that purposive interpretation of law becomes particularly relevant when the legislation being considered is a socially or economically beneficial one, like in the case at hand, and observed,

“Can it be said that the Parliament, on the one hand, recognised this valuable right of the local communities, but will still fail to protect it from an “Indian entity”. Could this ever be the purpose of the legislature? “Biological resources” are definitely the property of a nation where they are geographically located, but these are also the property, in a manner of speaking, of the indigenous and local communities who have conserved it through centuries.”

Relying on several international Conventions and Treaties, especially the Nagoya Protocol, the court went on to rule that SBB has sufficient regulatory powers under the Act to impose FEPB as regulatory fee.

It explained, “At this juncture, it must be stated that regulating an activity in form of demand of a fee is an accepted practice recognised in law. Therefore, in case the SBB as a regulator, demands a fee in the form of FEBS from the petitioner when the petitioner is admittedly using the biological resources for commercial purposes, it cannot be said that it has no powers to do so.”

The court, therefore, ruled that Divya Pharmacy was bound to comply with the SBB’s direction to share profits with the local and indigenous communities. It further upheld  the validity of Regulations 3-5 of the Biodiversity Regulations, 2014, observing, “This Court holds that the Regulations 2, 3 and 4 of the Guidelines on Access to Biological Resources and Associated Knowledge and Benefits Sharing Regulations, 2014 only clarifies and follows what is there in the Act and it is intra vires the Act.”