I downloaded and extracted the apache-tomcat-7.0. As per the instructions in the RUNNING.txt (%CATALINA_BASE%/RUNNING.txt), it should set the JRE_HOME in the "setenv.sh" file.
Where is this file located ? Documentation said, it would be in CATALINA_HOME/bin directory. However this file is not present there.
Documentation does mention about the absence of setenv.(sh|bat)
file:
(3.4) Using the "setenv" script (optional, recommended)
Apart from CATALINA_HOME and CATALINA_BASE, all environment variables can
be specified in the "setenv" script. The script is placed either into
CATALINA_BASE/bin or into CATALINA_HOME/bin directory and is named
setenv.bat (on Windows) or setenv.sh (on *nix). The file has to be
readable.
By default the setenv script file is absent. If the script file is present
both in CATALINA_BASE and in CATALINA_HOME, the one in CATALINA_BASE is
preferred
For example, to configure the JRE_HOME and CATALINA_PID variables you can
create the following script file:
On Windows, %CATALINA_BASE%\bin\setenv.bat:
set "JRE_HOME=%ProgramFiles%\Java\jre6"
exit /b 0
On *nix, $CATALINA_BASE/bin/setenv.sh:
JRE_HOME=/usr/java/latest
CATALINA_PID="$CATALINA_BASE/tomcat.pid"