The business unit named as PRAYATNJALI manufactures Ayurvedic medicines and nutraceutical products at its production facility in Haridwar, Uttarakhand. According to the averments in the petition, the trust and its busine

CS Professional · Intellectual Property Rights - Law and Practice · PYQS · December 2025
The business unit named as PRAYATNJALI manufactures Ayurvedic medicines and nutraceutical products at its production facility in Haridwar, Uttarakhand. According to the averments in the petition, the trust and its business establishment were formed to produce indigenous healthcare products. The Uttarakhand Biodiversity Board (UBB) passed an order levying a demand under the category of "Fair and Equitable Benefit Sharing" (FEBS) as per the Biological Diversity Act, 2002.Aggrieved by the order passed by the UBB, PRAYATNJALI filed a Writ petition. The core contention of the petitioner was that the Uttarakhand Biodiversity Board (UBB) has no authority or jurisdiction to levy a demand under the category of "Fair and Equitable Benefit Sharing" (FEBS). It is argued that the petitioner is not liable to pay any amount or contribute in any form. Since the petitioner does not fall within the categories specified under Section 3(2) of the Biological Diversity Act, the question of seeking prior approval from the National Biodiversity Authority (NBA) does not arise. The petitioner further argued that the State Biodiversity Board (SBB) lacks the power to impose FEBS obligations on Indian entities as per the Biological Diversity Act, 2002. Even the NBA does not possess the authority to delegate such powers to the SBB, as the NBA itself is not empowered to levy FEBS on Indian entities. According to the petitioner, there is no statutory provision that mandates monetary or non-monetary contributions from Indian entities; FEBS obligations are restricted solely to foreign entities. It was further submitted that the principle of statutory interpretation requires words in a statute to be given their plain meaning, supported by precedent from the Supreme Court.In response, the respondents argued that "Fair and Equitable Benefit Sharing" (FEBS) is a central objective of the Biological Diversity Act, 2002, and must be understood in the context of international conventions and treaties that informed the legislation, including the Rio de Janeiro Convention, Johannesburg Declaration, and the Nagoya Protocol. Counsel for the State Biodiversity Board (SBB) submitted that there exists no distinction between foreign and Indian entities with respect to FEBS obligations. Creating such a distinction would undermine the purpose of the Act and contradict India's international commitments. It was argued that while foreign entities under Section 3 require prior approval from the NBA, Indian entities under Section 7 are obligated to provide prior intimation to the SBB. Thus, regulatory authority over Indian entities lies with the SBB, and the imposition of FEBS forms part of its statutory regulatory functions.The petitioner, being an Indian entity without foreign participation in either its shareholding or management, challenged the imposition of FEBS on the ground that such obligations cannot be extended to domestic entities. Therefore, when the SBB, acting as a regulator, demands a fee in the form of FEBS from an entity utilizing biological resources for commercial purposes, such an action cannot be regarded as beyond its powers.The Court emphasized that FEBS must not be interpreted solely within the narrow confines of the definition clause but rather in the broader context of the Act's objectives and India's international commitments towards biodiversity conservation. It concluded that the SBB is legally authorized to demand FEBS as part of its statutory role, and the NBA is empowered to issue necessary regulations in this regard. Accordingly, the challenge to the validity of the 2014 Regulations on Access to Biological Resources and Associated Knowledge and Benefit Sharing was dismissed.Answer the following: Analyze and evaluate the concept of Fair and Equitable Benefit Sharing (FEBS) under the Biological Diversity Act, 2002 with reference to the above stated facts.

Answer & Explanation:

"Fair and equitable benefit sharing" defined under Section 2(g) of the Biological Diversity Act, 2002) refers to the sharing of benefits as determined by the National Biodiversity Authority under Section 21. The concept of Fair and Equitable Benefit Sharing (FEBS) is a cornerstone of the Biological Diversity Act, 2002, aimed at ensuring that benefits arising from the commercial utilisation of biological resources and associated traditional knowledge are shared fairly with local communities and the State. FEBS reflects India's obligations under international instruments such as the Convention on Biological Diversity (CBD) and the Nagoya Protocol. Under the Act, regulatory powers are distributed between the National Biodiversity Authority (NBA) and the State Biodiversity Boards (SBBs). While Section 3 requires foreign entities to obtain prior approval of the NBA, Section 7 mandates Indian entities to give prior intimation to the SBB before accessing biological resources for commercial purposes. The SBB is empowered to regulate such access and impose benefit-sharing obligations. In the present case, Prayatnjali, an Indian entity, challenged the authority of the Uttarakhand Biodiversity Board (UBB) to levy FEBS, contending that benefit-sharing obligations apply only to foreign entities and that neither the NBA nor the SBB has statutory authority to impose FEBS on Indian companies. The petitioner relied on a literal interpretation of the statute. In case of Divya Pharmacy vs. Union of India, Writ Petition (M/S) No. 3437 of 2016 , which had the similar facts as that of the present case, the Court 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." In this case, it was clarified that FEBS is a universal obligation applicable to both Indian and foreign entities, and the State Biodiversity Boards are legally empowered to impose such obligations. The decision reinforces a purposive interpretation of the Biological Diversity Act, balancing commercial utilisation with conservation and community interests. The Court also stated that "What is Fair and Equitable Benefit Sharing cannot be looked through the narrow confines of the definition clause alone. The concept of FEBS has to be appreciated from the broad parameters of the scheme of the Act and the long history of the movement for conservation, together with our international commitments in the form of international treaties to which India is a signatory. Once we do that, we find that Under Section 2(f) and subsection (4) of Section 21, the NBA has got powers to frame regulations in order to give payment of monetary compensation and other nonmonetary benefits to the benefit claimers as the National Biodiversity Authority may deem fit, in form of Regulations and the State Biodiversity Board in turn has powers and duties to collect FEBS under the regulatory power it has under Section 7 read with Section 23 (b) of the Act. In view of the above, in the present case, UBB has got powers to demand Fair and Equitable Benefit Sharing from the petitioner i.e., Prayatnjali, 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 Biological Diversity Act, 2002.

Topics: Biological Diversity Act, 2002

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