Supriya Lifescience Ltd. vs Union Of India & Ors.

This writ petition filed under Article 226 of the Constitution of India seeks the following reliefs :-

The challenge in this writ petition is to the impugned rejection order dated 10^th August 2026 issued by respondent No.4. It is the submission of Mr. Darius Shroff, learned Senior Advocate for the petitioner that the impugned order travels beyond the clarification provided by the Central Bureau of Narcotics (“CBN”, for short). Further submission is that the same is non-compliant with the limited remit of this Court’s interim order dated 4^th August 2026, and no evidence has been placed on record to show that the inquiry/investigation was initiated under the Narcotic Drugs and Psychotropic Substances Act, 1985 (“NDPS Act”, for short).

The facts of the case in brief are that on 8^th January 2026, in the course of business, one In Sung Trading Co. Ltd. placed a purchase order upon the petitioner for supply of 200 kg of Ketamine Hydrochloride (“the said goods”, for short). On 30^th March 2026, the petitioner received the original import certificate dated 27^th February 2026 by the Ministry of Food and Drug Safety, Republic of Korea, which was valid till 31^st May 2026.

On 2^nd April 2026, the petitioner submitted an application to CBN for issuance of “No Objection Certificate” for export of the said goods to Korea. The CBN issued the Export Authorisation dated 16^th April 2026, which was valid until 31^st May 2026.

The petitioner, by email dated 20^th May 2026 and 22^nd May 2026 submitted the pre-shipment documents to the overseas buyer for approval. Subsequently, on 28^th May 2026 the Customs Broker filed the checklist for the shipping bill on the E-Sanchit portal. The overseas buyer, vide email dated 29^th May 2026, raised a query regarding the shipment batch, whereupon the petitioner arranged a fresh batch and vide email dated 1^st June 2026, submitted revised pre-shipment documents, which were approved on the same day.

The Import Certificate and Export Authorisation expired on 31^st May 2026. It is the contention of learned Senior Advocate for the petitioner that owing to a bonafide oversight following the change in shipment batch and the overseas buyer’s approval received on 1^st June 2026, the petitioner filed the shipping bill on 2^nd June 2026, the goods were dispatched to ACC, Sahar on 4^th June 2026.

The Customs Department raised a query dated 5^th June 2026 on the ICEGATE Portal regarding the expired Export Authorisation and to submit fresh Export Authorisation. The petitioner clarified that the expiry was due to a bonafide and inadvertent human oversight and requested return of the consignment for secured storage pending procurement of a fresh Import Certificate and Export Authorisation. The petitioner, vide its letter dated 12^th June 2026 addressed to respondent No.5 -Deputy Commissioner of Customs (Export), reiterated its request for return of the consignment to its manufacturing facility pending procurement of fresh authorisations.

As no response was received, the petitioner, vide letters dated 15^th June 2026, 19^th June 2026 and 23^rd June 2026 requested the respondent Nos.4 and 5 for retention of the consignment in Customs Bonded Warehouse pending receipt of a fresh Export Authorisation.

On 1^st July 2026, the respondent No.3 informed the petitioner that the consignment had been placed on hold for examination scheduled on 2^nd July 2026. The overseas buyer, vide email furnished a fresh Import Certificate dated 2^nd July 2026 valid till 30^th November 2026. On the same day, the petitioner applied to CBN for cancellation of the earlier Export Authorisation and issuance of a fresh Export Authorisation. The petitioner by email, dated 2^nd July 2026 informed respondent Nos.2 and 3 of the application for a fresh Export Authorisation and reiterated its request to retain the consignment in a Customs Bonded Warehouse.

During the scheduled examination on 2^nd July 2026, the petitioner’s General Manager (Sales & Marketing) and Customs Broker were issued summons under Section 67 of the NDPS Act, their statements were recorded, and they were thereafter arrested on the allegation of attempting to export the said goods without a valid Export Authorisation. The petitioner learnt of the seizure only through the Arrest Memos, and neither the Panchnama nor the Seizure Memo has been furnished till date. Respondent No.3 issued summons dated 6^th July 2026 under Section 67 of the NDPS Act to the Director of the petitioner. Apprehending coercive action in light of the earlier arrests, the Director sought anticipatory bail.

The petitioner received the fresh Export Authorisation from CBN on 10^th July 2026, valid for export of the said goods up to 9^th October 2026. The petitioner, vide Representations dated 14^th July 2026 to the Respondent Nos.2 to 4 requested release of the consignment for export in view of the fresh Export Authorisation issued by the CBN, for which no response was received.

The petitioner filed Writ Petition No.3578 of 2026 on 16^th July 2026 challenging the illegal and arbitrary seizure of the petitioner’s goods. Multiple summons were issued to the petitioner’s directors. The petitioner on 16^th July 2026 was provided with a copy of Seizure Memo No.35 dated 2^nd July 2026 issued by the officer of respondent No.3 under Section 42 of the NDPS Act. During the hearing of Writ Petition No.3578 of 2026, the respondent’s counsel placed on record the clarification dated 30^th July 2026 issued by the CBN wherein it was stated that Export Authorisation dated 9^th July 2026 may be considered valid and applicable for the goods as mentioned. The respondents were directed by this Court to decide on the petitioner’s prayer for release of goods.

On 5^th August 2026, the petitioner through their counsel filed written submissions to the respondent No.4 for release of goods in light of CBN’s clarification. Respondent No.4 vide the order dated 10^th August 2026 rejected the request for provisional release of goods, as it was held that the subject goods seized under Section 42 of the NDPS Act are not liable to be provisionally released under Section 110A of the Customs Act on the basis of the prospectively issued Export Authorisation dated 9^th July 2026. This Court by the order dated 14^th August 2026 granted liberty to file a comprehensive petition challenging the impugned rejection order. The respondent No.3 vide emails dated 18^th August 2026/19^th August 2026 addressed to AI Airport Service Limited and Mumbai Cargo Service Center Cold Chain Solutions Pvt. Ltd. requested cold storage facilities where the goods can be kept under temperature-controlled conditions.

We have heard Mr. Darius Shroff, learned Senior Advocate for the petitioner at length. Mr. Shroff apart from the submissions on merits submitted that so far as the criminal proceedings under the NDPS Act is concerned, the petitioner will resort to appropriate remedies available in law. It is further submitted that the value of the goods is Rs.72 lakhs and the petitioner is willing to deposit the amount of Rs.72 lakhs with the Customs Department subject to further orders that may be passed as a result of the outcome of the adjudication proceedings, to show their bonafides.

Mr. Jitendra Mishra, learned counsel for the respondents on the other hand submitted that the sole object of filing this writ petition is to circumvent the statutory procedure prescribed under the NDPS Act and the Bharatiya Nagrik Suraksha Sanhita 2023, despite the fact that the matter is already the subject matter of investigation and criminal proceedings before the competent special NDPS Court. The seizure of the subject goods was effected in exercise of statutory powers under the NDPS Act upon detection of serious violations involving an attempted export of Ketamine Hydrochloride, a notified psychotropic substance, on the strength of an Export Authorisation which had already expired prior to the filing of the shipping bill. The legality of the seizure, the applicability of the penal provisions invoked, and the criminal liability of the persons concerned are matters presently under investigation and are also subject to proceedings before the jurisdictional Special NDPS Court/Magistrate. The petitioner cannot be permitted to bypass the statutory mechanism by invoking the writ jurisdiction of this Court. The seizure is under Section 42 of the NDPS Act and therefore, a civil writ petition is not maintainable. Reliance is placed on the decision in Nagpur Cable Operators Association vs. Commissioner of Police, Nagpur¹ which expounded procedure with reference to the Rules and the law as to in which circumstances criminal writ petition and under which circumstances civil writ petition is to be filed and placed before the Court as per the allocation of work.

It is further submitted that the present petition raises several disputed questions of fact requiring appreciation of documentary and oral evidence, including the petitioner’s knowledge regarding the expiry of the Export Authorisation, the circumstances under which the shipping bill came to be filed, the role of the persons involved in the export transaction, and the applicability of the provisions of the NDPS Act. It is submitted that the disputed questions of fact cannot appropriately be adjudicated in proceedings under Article 226 of the Constitution of India and the same requires the examination of the evidence.

Learned counsel for the respondents submitted that the petitioner’s attempt to portray the filing of the shipping bill on the basis of an expired Export Authorisation as a mere clerical or inadvertent error is wholly incorrect and contrary to the material collected during investigation. The contention of learned counsel is that though there is an Export Authorisation by the CBN, the CBN did not ostensibly clarify that the seized goods under the shipping bill dated 2^nd June 2026 being exported with expired Export Authorisation dated 13^th April 2026 valid up to 31^st May 2026 may be released against the fresh Export Authorisation dated 9^th July 2026. The case of the respondent department is that the fresh Export Authorisation dated 9^th July 2026 is not applicable for release of the goods that have been seized under Section 42 of the NDPS Act.

We have heard learned counsel at length. We have gone through the pleadings and the materials on record.

The petitioner is seeking provisional release for export of the goods i.e. Ketamine Hydrochloride, covered under the shipping bill dated 2^nd June 2026 under Export Authorisation dated 9^th July 2026. The main thrust of the argument of the respondents is that since there is a seizure of the goods under Section 42 of the NDPS Act, the civil writ petition may not be maintainable. At the first blush, we were impressed with the submission of Mr. Mishra that having regard to the challenge to the seizure memo dated 2^nd July 2026 issued by the respondent No.3 under the NDPS Act, the petitioner has to file appropriate proceedings invoking the criminal jurisdiction. In the ordinary course we would not have hesitated in refusing to entertain the present writ petition considering that the goods in question were seized under Section 42 of the NDPS Act and, therefore, the only recourse available to the petitioner was to avail of the remedies challenging the seizure before the appropriate forum.

Section 8(c) of the NDPS Act provides that no person shall manufacture, export from India, except for medical or scientific purposes and in the manner and to the extent provided by the provisions of this Act or the rules or orders made thereunder and in a case where any such provision, imposes any requirement by way of licence, permit or authorisation also in accordance with the terms and conditions of such licence, permit or authorisation. The petitioner is a manufacturer of the goods.

As indicated earlier, the CBN had, earlier issued the expert Authorisation dated 16^th April 2026, which was valid until 31^st May 2026. The petitioner submitted the pre-shipment documents to the overseas buyer for approval on 20^th May 2026 and subsequently, on 28^th May 2026, the Customs Broker filed the checklist for the shipping bill on the E-Sanchit portal. The overseas buyer vide email dated 29^th May 2026 raised a query regarding the shipment batch, whereupon the petitioner arranged a fresh batch and vide email dated 1^st June 2026 submitted revised pre-shipment documents, which were approved on the same day. However, the Import Certificate and Export Authorisation had expired on 31^st May 2026. It is the contention of the petitioner that owing to a bonafide oversight following the change in shipment batch and the overseas buyer’s approval received on 1^st June 2026, the petitioner filed the shipping bill on 2^nd June 2026 and the goods were dispatched to ACC, Sahar on 4^th June 2026.

The Customs Department raised a query on the ICEGATE Portal on 5^th June 2026 regarding the expired Export Authorisation and to submit a fresh Export Authorisation. The petitioner clarified that the expiry was due to a bonafide and inadvertent human oversight and requested the return of the consignment for secured storage pending procurement of a fresh Import Certificate and Export Authorisation. Respondent No.3 informed the petitioner on 1^st July 2026 that the consignment had been placed on hold for examination scheduled on 2^nd July 2026. The overseas buyer by email dated 2^nd July 2026 furnished a fresh Import Certificate valid till 30^th November 2026. On the same day the petitioner applied to CBN for cancellation of the earlier Export Authorisation and issuance of a fresh Export Authorisation. The petitioner informed respondent Nos.2 and 3 of the application for a fresh Export Authorisation and reiterated its request to retain the consignment in a Customs Bonded Warehouse. The petitioner learnt of the seizure of goods on the allegation of attempting to export the said goods without a valid Export Authorisation on 2^nd July 2026.

The petitioner received the fresh Export Authorisation from CBN, valid for export of the said goods up to 9^th October 2026. The petitioner by representations dated 14^th July 2026 therefore requested release of the consignment for export in view of the fresh Export Authorisation issued by the CBN.

The request of the petitioner for provisional release of the goods was rejected on 10^th August 2026 on the ground that the subject goods were seized under Section 42 of the NDPS Act are not liable to be provisionally released under Section 110A of the Customs Act on the basis of the prospectively issued Export Authorisation dated 9^th July 2026.

Had it not been for the peculiar facts of the present case, we would have probably hesitated to entertain the present writ petition, considering that the goods have been seized under Section 42 of the NDPS Act, the appropriate course being to approach the competent forum provided by law. However, in the present case it is pertinent to note that the CBN had issued the Export Authorisation initially on 16^th April 2026, which was valid until 31^st May 2026. Since the overseas buyer had raised a query regarding the shipment batch, the petitioner arranged for a fresh batch and by the email dated 1^st June 2026 submitted revised pre-shipment documents. In fact so far as the goods are concerned a fresh Export Authorisation was issued by the CBN on 10^th July 2026, which was valid up to 9^th October 2026. In the meantime, between the period 31^st May 2026 and 10^th July 2026, these goods which did not have a valid authorisation were seized by the officer under Section 42 of the NDPS Act. In our opinion, this is not a case where the petitioner’s intent was to export the prohibited goods without an authorisation. The petitioner has been exporting the goods in the past with a valid authorisation. Even for the goods (previous batch), the petitioner had an authorisation of CBN valid till 31^st May 2026. The goods had to be replaced because of the query of the buyer. The fresh batch was submitted for export by which time the authorisation expired. Later, on an application made by the petitioner, the authorisation was granted by CBN. The interregnum, during which the goods were in the custody of Custom, had factually not been exported. On being informed the petitioner applied and in fact got the authorisation from CBN. Thus, in our opinion, this is a fit case where the intention of the petitioner was not to export the consignment unauthorisedly. The Export Authorisation was in fact received but after the goods were seized. It is in these circumstances we are of the opinion that the seizure of the goods should not be a factor to deprive the petitioner the benefit of the Export Authorisation by the CBN which is in accordance with the provisions of the Customs Act. It is in such circumstances we find this is a fit case for issuing directions regarding provisional release of goods on certain terms and conditions.

As submitted by learned Senior Advocate, it is pertinent to note that for a period from 1^st July 2025 to 6^th September 2025 the export performance of the petitioner reveals that the total quantity of goods exported was 67,000 kgs under as many as 39 invoices. The annual invoices/shipments of Ketamine executed by the petitioner are approximately 300 invoices per year. It is the submission of learned Senior Advocate for the petitioner that the annual foreign exchange earnings from Ketamine HCL is Rs.400 crores and the expected foreign exchange earnings from Ketamine HCL over the next five years is Rs.2000 crores.

It is significant to extract paragraphs 10 and 11 of the impugned order dated 10^th August 2026 which reads thus :-

The approach of the Assistant Commissioner of Customs, Export, ACC, Mumbai-III that merely because the CBN has not clarified whether the said seized goods can be released against the fresh Export Authorisation issued by the CBN, should be a reason to hold that the goods seized under Section 42 of the NDPS Act are liable to be disposed only as per the provisions of Section 52 of the NDPS Act, in our view, in the facts of this case, erroneous. It would be useful to rely upon the decision of the Hon’ble Supreme Court in Central Warehousing Corporation vs. Adani Ports and Special Economic Zone Limited (APSEZL) and others² wherein Their Lordships in paragraphs 57 and 58 observed thus :-

Thus, in our view, the CBN having issued the Export Authorisation for the very same goods which have been seized under Section 42 of the NDPS Act, the delay in obtaining the authorisation has to be regarded as technical. The provisional release of the goods in the peculiar facts of this case should be permitted subject to certain terms and conditions. Hence, the following order :-

The writ petition is disposed of. No costs.