The Bombay High Court has issued a strong caution to the Maharashtra government, indicating that the state could be required to pay compensation to two hookah tobacco manufacturers if the seizure of their export consignments is eventually found to be unlawful.
A division bench of Justices Ravindra V. Ghuge and Abhay J. Mantri made these observations while hearing petitions filed by Soex India Private Ltd and High Street Impex LLP, both of which have challenged the confiscation of their products by the Maharashtra Food and Drug Administration.
During the open court hearing, the judges made it clear that the state could face financial consequences if its actions are ruled illegal. They observed that if losses are suffered by the companies and the court ultimately finds the seizures to be unjustified, the government would be liable to pay damages. The bench noted that this warning was being placed on record in advance.
The case arises from enforcement actions carried out by the FDA at manufacturing and storage facilities operated by the two companies in Pune and Thane districts. In early January, authorities conducted an intensive 24-hour operation at Soex India’s manufacturing unit in Takve Budruk, Pune district. During the raid, officials seized large quantities of raw tobacco, flavoured or scented tobacco and shisha flavouring products, collectively valued at approximately ₹31.67 crore.
FDA officials claimed that the seized items were prohibited under existing state regulations and had tested positive for nicotine. According to the authorities, the products violated a prohibitory order issued on July 16, 2025, which bans certain tobacco-related items.
In a separate but related action, on December 30, 2025, the FDA seized hookah-related products worth about ₹19.45 crore from a warehouse operated by High Street Impex in Dapode, Bhiwandi. Criminal cases have been registered in connection with both seizures, and investigations are currently underway.
Appearing on behalf of the companies, senior advocate Vikram Nankani argued that a significant portion of the confiscated goods belonged to a 100 per cent export-oriented unit that is licensed by the Union Ministry of Commerce. He contended that such export-focused units are governed by central laws, including the Foreign Trade Policy and the Customs Act, and therefore fall outside the regulatory jurisdiction of state-level food safety authorities.
Nankani further submitted that the Food Safety and Standards Act applies only to goods imported into India or manufactured and sold within the domestic market, and not to products exclusively meant for export. He warned the court that the failure to meet international delivery commitments could expose the companies to enormous financial losses, potentially running into hundreds of crores of rupees.
To address the state’s concerns that the seized products could be diverted into the domestic market, the petitioners offered a set of safeguards. They proposed that the confiscated consignments be permitted for export under strict supervision, with customs authorities sealing the containers, state officials remaining present during the process, samples being drawn and tested, and formal undertakings being given to ensure that none of the goods are sold within India.
The bench acknowledged the seriousness of the situation, noting that exporters could suffer irreversible harm if export orders are cancelled and later it is found that the ban itself was unlawful. The judges remarked that in such circumstances, the damage could not simply be undone and questioned who would compensate exporters if the clock could not be turned back.
The state government, however, opposed granting any interim relief. It maintained that the seizures were carried out strictly in accordance with a valid notification banning such products and pointed out that criminal proceedings are already pending. The state also raised apprehensions that hookah tobacco paste could still reach Indian consumers through indirect channels, including online platforms.
While recognising that FDA officers acted under an existing notification, the High Court clarified that this alone would not shield the government from liability if the court ultimately concludes that the seizures were unlawful.
The matter is scheduled for further hearing on February 9, 2026. Until then, the court has not granted permission for the export of the seized goods.
