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Judgment
Heard Mr. C.T. Jamir, learned Senior counsel assisted by Mr. Aliba Ozukum, learned counsel appearing for the Petitioner in the two writ petitions as well as the contempt application and Mr. Z. Kulnu, learned Standing Counsel/CBIC appears on behalf of the Respondents in the writ petition as well as the alleged contemnor in the contempt proceedings.
Taking into account the three proceedings are interconnected, all the three proceedings are taken up for disposal by this common Judgment and Order.
The Petitioner herein is a Trader in the business of arecanuts. A large stock of Burmese origin non-edible supari upon being seized by the Government of Manipur was auctioned by the Office of the Chief Conservator of Forests/Territorial-II, Imphal, Manipur on 14.10.2024 vide Auction Notice No. 19/01/2020-21/TPL dated 09.10.2024 of the DCF Tengnoupal Forest Division. One Mr. Muhammad Alauddin, Proprietor of M/S Zam Zam Traders was the successful bidder in respect of various Lots of arecanuts, i.e. Lot No. 1 to 25, Lot No. 26 to 50, Lot No. 51 to 72 and Lot No. 73 to 94. In support of that the Petitioner have enclosed the Orders so issued by the Chief Conservator of Forests/Territorial-II, Government of Manipur collectively as Annexure-B to the writ petition. It is further the case of the Petitioner that the Petitioner purchased the entire Lots purchased by M/S Zam Zam Traders and entered into a Deed of Agreement on 01.11.2025. In terms with the said Agreement, the Petitioner purchased 1500 (One Thousand Five Hundred) bags of arecanuts. The Deed of Agreement is Annexure-C to the writ petition. It is further the case of the Petitioner that the Office of the Divisional Forest Officer, Tengnoupal Forest Division had also issued Transit Passes in respect to the entire Lot so purchased by the Petitioner from M/S Zam Zam Traders and these documents have been collectively enclosed as Annexure-D to the writ petition. This Court perused the records produced by Mr. Z. Kulnu, learned Standing Counsel for Respondent/CBIC. It transpires therefrom that some of the originals of Annexure-D are available in the records.
The Petitioner before entering into the State of Nagaland also obtained the Transit Passes from the Government of Nagaland for the movement of two trucks bearing Registration Nos. CG-04-JD-5709 and AS-01-FC-7638 by paying the Royalty Fee in the Forest Department. The Transit Passes which were issued have been annexed as Annexure-E to the writ petition.
On the basis of these documents, the Petitioner moved the purchased arecanuts from M/S Zam Zam Traders. On 20.12.2025 these arecanuts were seized by the Respondent Authorities on the ground that these arecanuts were of Burmese origin and smuggled to India and therefore, liable for confiscation. The Petitioner being aggrieved by such actions on the part of the Respondent Authorities in seizing the arecanuts which were auctioned to M/S Zam Zam Traders by the Government of Manipur, and purchased by the Petitioner approached this Court challenging the seizure and further seeking directions for provisional release of these arecanuts by filing the writ petition which was registered and numbered as WP(C)/42/2026.
At this stage it is very pertinent to take note of that prior to filing of the writ petition, being WP(C)/42/2026, the Petitioner approached the learned Principal District & Sessions Judge, Dimapur seeking zimma of the seized arecanuts by filing a petition which was registered and numbered as I.A. No. 82/2026. This application was filed under Section 497 of the Bhartiya Nagarik Suraksha Sanhita (BNSS) for release of the seized 570 (Five Hundred and Seventy) bags of arecanuts on zimma. The learned Principal District & Sessions Judge, Dimapur vide an Order dated 12.03.2026 directed release of these arecanuts to the Petitioner subject to furnishing a zimma bond of Rs. 10,00,000/- (Rupees Ten Lakhs) and also furnishing a surety to the satisfaction of the Investigating Officer of the case.
In the backdrop of the above, it is also relevant to take note of that when WP(C)/42/2026 was filed the Order dated 12.03.2026, passed by the learned District Judge, Dimapur in I.A. No. 82/2026 was placed before the learned Co-ordinate Bench. The learned Co-ordinate bench vide an Order dated 09.04.2026 issued notice making it returnable by 4 (four) weeks and taking into consideration the Order dated 12.03.2026 issued by the Principal District & Sessions Judge, Dimapur directed the Respondent Authorities to release the 570 (Five Hundred and Seventy) bags of arecanuts to the Petitioner.
It is also relevant to observe that in view of the Order dated 09.04.2026 passed by the learned Co-ordinate Bench and on account of the non-compliance to the same, a contempt proceeding was initiated by the Petitioner which is registered and numbered as COP(C)/15/2026. This Court also takes note of that the Respondents have filed an Interlocutory Application, being I.A.(Civil)/181/2026 seeking modification/vacation of the Order dated 09.04.2026.
While these applications have been pending, the Respondents herein have assailed the Order dated 12.03.2026 passed by the learned District & Sessions Judge, Dimapur in I.A. No. 82/2026 in a proceeding which was registered and numbered as Criminal Petition No. 18/2026. The learned Co-ordinate Bench of this Court, by a Judgment and Order dated 13.08.2026 set aside the Order dated 12.03.2026 passed by the Principal District & Sessions Judge, Dimapur in I.A. No. 82/2026 holding inter alia that the Principal District & Sessions Judge, Dimapur did not have the jurisdiction under Section 497 of BNSS to make the provisional release of the arecanuts in view of the provision of Section 110A of the Customs Act, 1962.
This Court now finds it very appropriate to take note of that the learned Co-ordinate Bench had passed the Order dated 09.04.2026 in WP(C)/42/2026 solely on the basis of the Order dated 12.03.2026 passed by the learned Principal District & Sessions Judge, Dimapur. When the said Order dated 12.03.2026 passed by the learned Principal District & Sessions Judge, Dimapur have been already interfered with by the learned Co-ordinate Bench in the Order dated 13.08.2026 passed in Criminal Petition No. 18/2026 the interim order dated 09.04.2026 so far as the direction passed by the learned Co-ordinate Bench have lost its efficacy. Considering the above, it is the opinion of this Court that the interim direction so passed on 09.04.2026 cannot be allowed to be continued. In view of the above, the I.A. (Civil)/181/2026 stands disposed.
The consequential effect of modification/vacation of the interim order dated 09.04.2026 and read with Judgment & Order dated 13.08.2026 in Criminal Petition No. 18/2026 it is the opinion of this Court that the case of willful and deliberate violation to the Order dated 09.04.2026 cannot be proceeded with. Accordingly, the contempt proceedings being COP(C)/15/2026 stands dropped.
It is of relevance to take note of that while WP(C)/42/2026 was pending, the Petitioner filed another writ petition, thereby challenging the Extension Notice dated 01.06.2026 thereby extending the seizure period under Section 102 of the Customs Act, 1962. In the said writ petition, the learned Co-ordinate Bench of this Court, vide an Order dated 17.07.2026 while issuing notice stayed the extension of the show cause notice dated 01.06.2026. It is under such circumstances another application was filed for vacating the Order dated 17.07.2026 on the ground that the period of extension, if stayed would amount to allowing the writ petition without giving the opportunity to the Respondents to be heard. It was also averred that only on the basis of the extension under Section 110(2) of the Customs Act, 1962 the Customs Authorities are proceeding with the investigation. The said application was registered and numbered as I.A.(Civil) No. 182/2026. It is the opinion of this Court that the Order dated 17.07.2026 was an interim order and by granting a stay of the impugned notice dated 01.06.2026 this Court had granted the final relief.
Under such circumstances it is therefore, the opinion of this Court that the interim Order dated 17.07.2026 passed by the learned Co-ordinate Bench cannot be allowed to be continued. Accordingly, in view of the said observation, I.A.(Civil)/182/2026 stands disposed.
In the backdrop of the above, this Court now takes up both the writ petitions for final disposal.
It will be seen that the Petitioner claims its rights upon the seized arecanuts on the basis of the auction purchase documents of M/S Zam Zam Traders; the Transit Passes which were issued by the Government of Manipur; the agreement entered into by and between the Petitioner and M/S Zam Zam Traders as well as the Transit Passes which were issued by the Government of Nagaland in the name of the Petitioner, that the goods in question were not liable to be confiscated under the Customs Act, 1962 inasmuch as the arecanuts in question were purchased from the Government of Manipur.
This Court have duly perused Section 110 of the Customs Act, 1962 (In short ‘the Act of 1962’) which stipulates that if a proper officer has reasons to believe that the goods are liable to be confiscated under the Act of 1962 the proper officer may seize such goods. What goods are liable to be confiscated are mentioned in Section 111 of the Act of 1962.
The learned counsel appearing on behalf of the Respondents submitted that the arecanuts were seized as it was liable to be confiscated in terms with Section 111(b) of the Act of 1962. It is very pertinent to take note of that the opening words of Section 111 is “The following goods brought from a place outside India shall be liable to confiscation”. Under such circumstances it is only if the goods are from a place outside India such goods can be confiscated subject to the same falling within the ambit of sub-clause (a) to (q) of Section 111 of the Act of 1962.
In the instant case, it is pertinent to observe that the Petitioner’s claim that they have purchased the goods from M/S Zam Zam Traders. The materials on record also show that the Government of Manipur auctioned ta large quantity of arecanuts. The arecanuts auctioned to M/S Zam Zam Traders were in four lots i.e. Lot Nos. 1 to 25, Lot Nos. 26 to Lot Nos. 50, 51 to 72 and Lot Nos. 73 to 94. The records also show that M/S Zam Zam Traders through its Proprietor, Mr. Muhammad Alauddin, being the successful bidder paid the amounts for the auctioned arecanuts. The details of the purchase are provided in the four Orders dated 31.10.2024 issued by the Chief Conservator of Forests/Territorial-II, Government of Manipur.
It is the opinion of this Court that if these are the arecanuts in question which were transported by the Petitioner after having purchased from M/S Zam Zam Traders these arecanuts are not liable for confiscation inasmuch as they were sold by the Government of Manipur to M/S Zam Zam Traders in a public auction.
The materials on record also show that against these Lots of arecanuts which were sold on public auction Transit Passes were issued by the Government of Manipur. The Petitioner also obtained from the Government of Nagaland Transit Passes. The above aspect is evident from Annexure-D and Annexure-E to the writ petition. Annexure-E to the writ petition is of relevance inasmuch as these Transit Passes have been shown to have been issued in favour of the Petitioner. However, there is an issue as regards the verification of the fact as to whether M/S Zam Zam Traders sold these arecanuts to the Petitioner. This aspect can be very well verified by the Authority under Section 110A of the Customs Act, 1962.
Considering the above, this Court therefore disposes of the instant batch of proceedings with the following observations and directions:-
The arecanuts which were sold by the Government of Manipur in the public auction to M/S Zam Zam Traders, Proprietor Mr. Muhammad Alauddin, would not come within the mischief of Section 111 of the Act of 1962 inasmuch as the purchase made by M/S Zam Zam Traders were sold by the Government of Manipur inside India.
The Transit Passes which have been issued by the Government of Manipur, which have been enclosed as Annexure-D to the writ petition, and some of the originals of which are seen in the records of the Respondent Authorities which were produced are evidence to the fact that the Government of Manipur have issued Transit Passes in respect to the arecanuts which were sold in the public auction.
The Transit Passes which were issued by the Government of Nagaland in respect to the two vehicles bearing Registration Nos. CG-04-JD-5709 and AS-01-FC-7638 clearly shows that Transit Passes were issued to the Petitioner.
The co-relation of the Transit Passes issued by the Government of Nagaland with the Transit Passes issued by the Government of Manipur has to be verified which the Respondent Authorities shall do so forthwith.
The Petitioner shall place necessary documents/evidence to establish the purchase of the arecanuts from M/S Zam Zam Traders before the Respondent Authorities, i.e. Respondent No. 3/Commissioner of Customs Act NER, Shillong and the Respondent No. 3 upon due satisfaction that the Petitioner had purchased these arecanuts from M/S Zam Zam Traders direct the release of the arecanuts in question. The said exercise directed upon the Respondent No. 3 would be deemed to be an exercise within the ambit of Section 110A of the Act of 1962.
The exercise directed above be carried out within 30 (thirty) days from the date a certified copy of the Judgment is served upon the Respondent No. 3.
All interim orders stands vacated.
The contempt proceedings stands dropped.