IMPORTANT POINT
Decision making process should be fair and fully informed and free from bias or restraint

JUDGMENT

S.H. KAPADIA, CJI.

Facts

1. Lafarge Surma Cement Ltd. (`LSCL' for short) is a company incorporated under the laws of Bangladesh. It has set up a cross-border cement manufacturing project at Chhatak in Bangladesh, which inter-alia has a captive limestone mine of 100Ha located at Phlangkaruh, Nongtrai, East Khasi Hills District in the State of Meghalaya. The mine is leased out in favour of Lafarge Umium Mining Pvt. Ltd. (`LUMPL' for short), which is an incorporated company under the Indian Companies Act, 1956 and which is a wholly owned subsidiary of LSCL. The entire produce of the said mine is used for production of cement at the manufacturing plant at Chhatak, Bangladesh under the agreement/arrangement between Government of India and Government of Bangladesh. There is no other source of limestone for LSCL except for the captive limestone mine situated at Nongtrai, East Khasi Hills District in the State of Meghalaya. The limestone as mined by LUMPL is conveyed from the mine situated at Nongtrai after crushing in a crusher plant. The limestone mined is conveyed by a conveyor belt to LSCL plant in Bangladesh.

2. The National Forest Policy, 1988 stood enunciated pursuant to Resolution No. 13/52-F, dated 12th May 1952 of GOI to be followed in the management of State Forests in India. The said Policy stood enunciated because over the years forests in India had suffered serious depletion due to relentless pressures arising from ever increasing demand for fuel wood, fodder and timber; inadequacy of protection measures; diversion of forest lands to non-forest uses without ensuring compensatory afforestation and essential environmental safeguards; and the tendency to look upon forests as revenue earning resource. Thus, there was a need to review the situation and to evolve, for the future, a strategy of forest conservation including preservation, maintenance, sustainable utilisation, restoration and enhancement of the natural environment. It is this need which led to the enunciation of National Forest Policy dated 7th December, 1988. The principal aim of the Policy was to ensure environmental stability and maintenance of ecological balance. The derivation of direct economic benefit was to be subordinate to the principal aim of the Policy (See para 2.2). Under essentials of forest management it is stipulated that existing forests and forest lands should be fully protected and their productivity improved. It is further stipulated that forest cover should be increased rapidly on hill slopes, in catchment areas and ocean shores. It is further stipulated that diversion of good and productive agricultural lands to forestry should be discouraged in view of the need for increased food production (See para 3.2). Under the Policy a strategy was prescribed vide para 4. The goal is to have a minimum of one-third of the total land area under forest or tree cover. In the hills and in mountains the aim is to maintain two-third of the area under forest or tree cover in order to prevent erosion and land degradation and to ensure the stability of the fragile eco-system. Under para 4.2.3, village and community lands, which is the common feature in north-east regions, not required for other productive uses, should be taken up for development of tree crop and fodder resources and the revenue generated through such programmes should belong to the panchayats where lands are vested in them and in other cases such revenues should be shared with local communities to provide an incentive to them and accordingly land laws should be so modified wherever necessary so as to facilitate and motivate individuals and institutions to undertake tree farming. Vide para 4.3.1, the Policy lays down that schemes and projects which interfere with forests that cover steep slopes, catchment of rivers, lakes and reservoirs, geologically unstable terrain and such other ecologically sensitive areas should be severely restricted. Tropical rain/moist forests, particularly in ar