Bombay High Court

KALPVRAKSH IMPEX PVT LTD AND ORSversusTHE STATE OF MAHARASHTRA AND ANR

Decided: 20 August 2026
Disposal: Allowed

Holding

The seizure was illegal and arbitrary; the petition is allowed and the confiscation order set aside.

Summary

The petitioners, exporters of seeds and rice, challenged the seizure of their commodities by the State of Maharashtra on the ground that no licence was required for export-oriented stock and that the seizure was made without any allegation of hoarding or price manipulation. They argued that they held valid import‑export certificates, had applied for a licence under the Maharashtra Scheduled Commodities Wholesalers Licensing Order, 1998 in 2010 but received no decision, and that central government orders had removed licensing requirements for export stocks. The respondents relied on a confiscation order under Section 6‑A of the Essential Commodities Act, alleging a violation of Section 3, and cited various earlier government orders mandating licences. The Court held that the respondents failed to prove any contravention of the Act, that the seizure was arbitrary and illegal, and that the stay order of 2010 barred further proceedings. Consequently, the petition was allowed and the seizure set aside.

Issues considered

Whether the seizure of export‑oriented commodities without a licence under the Maharashtra Scheduled Commodities Wholesalers Licensing Order, 1998 is lawful.
Whether Section 3 of the Essential Commodities Act, 1955 was complied with, justifying action under Section 6‑A.
Effect of central government orders removing licensing requirements on the legality of the seizure.
Whether the stay order dated 20 April 2010 bars the confiscation proceedings.

Legislation cited

Essential Commodities Act, 1955 — s. 10, 3, 6-A, 6-C, 7

Subjects

Essential Commodities Act
seizure
export licence
Maharashtra licensing order
illegal confiscation
writ petition
Section 6-A
stay order

Judgment

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CRIMINAL APPELLATE JURISDICTION

WRIT PETITION NO.2694 OF 2013

1. Kalpvraksh Impex Pvt. Ltd. ]

2. Abhishek Jayant Bhura ]
Authorized Representative ]
Mr. Manoj Namdev Patil ]
Export Executive ]
Nos. 1 and 2 having their registered office at ]
Having its registered Office at ]
307, Balaram Building, ]
Bandra-Kurla Complex, ]
Mumbai 400 051 ]
3. Jayant D. Bhura ]
At present residing at ]
Flat No.54, Sea Pearl, Building No.21, ]
Bandra Reclaimation, Bandra (W) ]
Mumbai 50 ] … Petitioners

V/s.

1. The State Of Maharashtra ]
(Through Turbhe Police Station, Navi Mumbai ]
In Cr. No. 3022/2013 ]
2. Office Of The Controller Of ]
Rationing And Director Of Civil ]
Digitally
signed by
PRIYANKA
Supplies, ]
PRIYANKA MADHAVRAO
MADHAVRAO KALE Add: Royal Insurancce Building ]
KALE Date:
2026.08.20
17:19:07 5th Floor, 14 Jamshedji Tata Road, ]
+0530
Churchgate, Mumbai – 400 020 ] … Respondents
______________________________________
Mr. Dileep Satale i/by Mr. Harshad Bhadbhade for the Petitioners.
Mr. Shrikant V. Gavand, APP for the Respondent-State.

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Mr. Vilas Sose, Asst. Rationing Officer, Thane – 40.
_____________________________________________

CORAM : A. S. GADKARI AND
KAMAL KHATA, JJ.
RESERVED ON : 14th July, 2026.
PRONOUNCED ON : 20th August, 2026.

Judgment (Per : Kamal Khata, J):-

1) By this Writ Petition, the Petitioners challenge the seizure of

commodities such as Safflower seeds (Kardee), Sesame seeds (Kala Thil)

and Rice from their godown on 8th March, 2013, without any reason and

seek quashing and setting aside the FIR bearing Crime No.II/22/2013

registered on 9th March, 2013 by the Turbhe Police Station.

2) Mr. Satale, appearing on behalf of the Petitioners, submits that the

Petitioners are engaged in the export business of various types of seeds and

grains. They hold a valid certificate for imports and exports issued by the

Ministry of Commerce, Government of India and possess valid licences for

the said business. They have been exporting commodities in consonance

with Central Government’s Export Promotion Policies.

3) According to the Petitioner’s case, the commodities were

purchased from open market and stored in the godown to facilitate exports

as per market demands within fixed periods. The Petitioners do not engage

in day-to-day trading of commodities in the local market. Exporting

commodities in compliance with the Central Government’s Export

Promotion Policies, does not require a licence under the Maharashtra

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Scheduled Commodities Wholesalers Licensing Order, 1998. Reliance is

placed on Para 2.42.1 of the said policy which is extracted hereunder:

“No seizure of stock shall be made by any agency so as to disrupt

manufacturing activity and delivery schedule of exports. In exceptional

cases, concerned agency may seize the stock on the basis of prima facie

evidence. However, such seizure should be lifted within 7 days.”

4) Mr. Satale submits that in the year 2010, the Petitioners filed an

application for a licence under the Maharashtra Scheduled Commodities

Wholesalers Licensing Order, 1998 merely as a precautionary measure.

Despite complying with all the requisitions for grant of licence, no

communication has been received neither rejecting the application nor

requesting further information or documents, nor granting the licence till

the present date.

5) Mr. Satale further submits that, a perusal of the F.I.R. reveals no

allegation that the Petitioners have contravened any directions issued by the

Central Government under Section 3 of the Essential Commodities Act,

1955 (EC Act). Consequently, in the absence of any order under section 3,

they cannot be prosecuted under Section 7 or Section 10 of EC Act. The

F.I.R. contains no allegation that the Petitioners stored the commodities

with the intention to hoard and raise prices in the market or sell them

within the State of Maharashtra.

6) Mr. Satale submitted that, the Petitioners acted without any

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malafide or dishonest intention in storing the commodities, and therefore,

any Confiscation Order passed under Section 6-A of EC Act would not

demonstrate any mens rea. He therefore submitted that, the Petition be

allowed.

7) Mr. Gavand, A.P.P. for the State, relied upon the Affidavit of

Bhaskar F. Tayade, Assistant Controller of Rationing, Office of Controller of

Rationing and Director of Civil Supply, Mumbai. He submitted that, on 17 th

May, 2013, the Respondent No.2 passed a final Order of Confiscation under

Section 6-A of the EC Act. The Petitioners had filed a criminal Appeal

bearing No.318 of 2013 in the Sessions Court, Mumbai under Section 6-C of

the EC Act, which was pending as on 4 th March 2014. He submitted that,

the interim Order dated 22nd August, 2013, directing the Petitioners to

submit a bank guarantee in the sum of Rs.1,51,78,600/- equivalent to the

price of goods in favour of the Registrar(s) Sessions Court, Mumbai, was

neither obeyed by the Petitioners nor was any objection raised thereto.

8) Mr. Gavand further submitted that, the Central Government issued

the Removal of (Licensing Requirements, Stock Limits and Movement

Restrictions) on Specified Foodstuffs (Amendment) Order, 2014 on 9 th

January, 2014 which reads as under:

“Explanation 2 : If the wholesaler or retailer or dealer
having Importer-Exporter Code Number issued by the
Directorate General of Foreign Trade is able to demonstrate

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that the whole or part of his or her stocks in respect of
edible oil, edible oilseeds and rice are meant for exports,
then, the stocks meant for exports shall be excluded for the
purpose of calculation of stock limits.”
9) He submitted that, this Order came into force on publication in

the official Gazette from 10th January, 2014 and therefore, prior to this

Order, the exporters were required to obtain licence for storage of the

Scheduled commodity from the Licensing Authority. He relied upon the

Central Government Orders dated 7th April, 2008, 2nd April, 2009, 25th

September, 2009 and 29th September, 2010. He accordingly, contended that

the Petitioners had committed an offence under Section 3 of the EC Act,

and since no storage licence was produced, the action of the Respondent

No.2 was justified, and the Petition deserves to be dismissed.

10) We have heard learned Advocates for the Petitioner as well as the

learned A.P.P. for the Respondent State and have examined the entire

record.

11) We find merit in Mr. Satale’s submissions on behalf of the

Petitioners. The Petitioners are exporters for seeds and grains holding valid

licences a fact the Respondents have neither disproved nor contested. The

Respondents have failed to demonstrate that, having purchased the

commodities from the open markets and collecting them in the godowns,

the Petitioners did not export those same commodities within a specified

period. A perusal of the F.I.R. shows that, the Respondents have not alleged

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that the Petitioners stored the commodities with the intention to hoard and

raise prices in the market or sell them within the State of Maharashtra.

There is also no allegation that the Petitioners’ storage of the commodities

in the godown caused increase in commodity prices in the markets.

12) We find it concerning that the Respondents have not explained

why licence was not issued or their application rejected, despite the

Petitioners having applied in 2010 under the Maharashtra Scheduled

Commodities Wholesalers Licensing Order, 1998. It is not the Respondent’s

case that licences were issued to exporters and that the Petitioners, with

knowledge thereof, failed to obtain one and continued storing commodities

in gross violation of the law.

13) A bare reading of the final Order dated 17 th May 2013, passed by

Respondent No. 2 under Section 6-A of EC Act, reveals that, apart from

mentioning that the Petitioners violated Section 3, no supporting Order has

been referenced or annexed to it. A bare reading of Section 6-A of the EC

Act makes it clear that, without an Order passed under Section 3 of the EC

Act, neither can an Order under Section 6-A be passed nor can any penalty

under Section 7 be levied. Thus, the action of the Respondents was entirely

arbitrary, illegal and unwarranted.

14) The Respondents have failed to point out any provision of law

entitling the Authorities to take action against the Petitioners on the ground

of suspicion alone. Such unsubstantiated action by the Respondents is to be

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deprecated, as it constitutes nothing more than sheer harassment.

15) Moreover, the Respondents have suppressed an Order passed by

this Court on 20th April, 2010, wherein a stay was granted on all future

proceedings in such matters. The Order is set out below for ready reference:

“1. From the perusal of the Order issued by the Government of India
dated 15th February 2002 it can be seen that the requirement for
obtaining licence for wheat, paddy/rice, coarse grains, sugar, edible
oilseeds and edible oils has been done away with. Through vide Order
dated 7th April, 2008 the Order dated 15th February 2002 has been
suspended for a period of one year, in paragraph 3 of the said Order it
has been specified that the Order dated 7 th April 2008 would not be
applicable if the said commodities are to be exported outside the State
or for import of the said commodities. Undisputedly, the commodities
in question were for export to other countries. It also appears from the
Order dated 12th January 2010 passed by the Controller of Rationing
and Director of Civil Supplies, Maharashtra that the Government itself
is not sure whether the licence is required or not.

2. Admittedly, the commodities in question are meant for export to
the other countries. In that view of the matter, issue Rule in all the
matter.

3. By way of interim relief there shall be a stay to further
proceedings in all the matters.”

(Emphasis supplied)

16) The Order is self-explanatory. There is absolutely no mention

about the said Order in the reply filed by the Respondents. Notably, despite

this stay Order, the Respondents proceeded to confiscate the goods on 8 th

March, 2013. The Respondent’s failure to acknowledge or plead to this

Order leads to the inescapable conclusion that they disregarded the Order

and thereby committed its breach.

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17) In these circumstances, we conclude that neither the Petitioners

nor their association were informed about requirement to obtain a licence

for storing the commodities intended for export. Assuming, that the State of

Maharashtra had decided that exporters must hold licence, there is no

explanation for why the Petitioners’ application, filed as early as 2010, was

neither granted nor rejected. In our view, it was the Respondents’ duty

either to call upon the Petitioners to comply with requisitions, if any, for the

consideration of their application for licence or grant the licence based on

their application. The Respondents have therefore acted illegally and

arbitrary in passing an Order under Section 6-A and proceeding to

confiscate commodities from the Petitioner’s godowns on 8th March, 2013.

18) We accordingly allow the Petition in terms of prayer clause (b).

(KAMAL KHATA, J.) (A.S. GADKARI, J.)

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