Imports under court orders? SC says not bona fide if other HCs already said no

They got a High Court order to import peas. But the Supreme Court just said—that order didn't make their goods legal.

Two importers had yellow peas sitting in a Mumbai customs warehouse. They had a Bombay High Court order directing the government to release the goods. They thought that was enough. The Supreme Court disagreed—and in doing so, laid down a rule that every importer relying on interim court orders needs to understand.

The question was simple: if you import goods under the protection of one High Court's interim order, but other High Courts have already dismissed similar challenges to the import ban, can your imports still be considered lawful?

The answer, the Supreme Court said, is no.

When the yellow pea ban hit

In 2019, the government restricted imports of yellow peas. The goal: protect domestic farmers. The Central Government issued notifications under Section 3 of the FTDR Act (the law that gives the government power to restrict imports and exports), setting quotas and requiring import licences.

Several importers challenged these restrictions in High Courts across the country. Some got interim orders—temporary court directions that allowed them to bring in their goods while the legal challenge was pending. The Rajasthan High Court, the Delhi High Court, the Bombay High Court—all saw writ petitions seeking permission to import.

Then came the Supreme Court's judgment in Union of India v. Agricas LLP in August 2020. The court upheld the government's restrictions. It held that imports made under interim orders were not bona fide (genuine and in good faith) and directed that all such goods be dealt with under the Customs Act.

The race to get goods released

After the Agricas judgment, two importers—M/s. Raj Grow Impex LLP and another firm—rushed to regularise their position. They approached the Adjudicating Authority (the customs officer who decides confiscation cases) and obtained orders-in-original (the first-level decision on confiscation) under Sections 111(d) and 125(1) of the Customs Act. Section 111(d) allows confiscation of goods imported in violation of restrictions. Section 125(1) gives the officer discretion to let the importer pay a fine—called a redemption fine—instead of losing the goods entirely.

The Adjudicating Authority allowed the importers to redeem their goods by paying fines. The goods were to be released.

But the Commissioner of Customs stepped in. Using his suo motu revisional power under Section 129D(2) of the Customs Act (the power to review and correct orders passed by subordinate officers without waiting for an appeal), he directed that appeals be filed against the release orders. The Commissioner believed the goods should be absolutely confiscated—meaning the importer loses them completely, with no option to pay a fine and get them back.

The importers didn't wait for the appeal process to play out. They went straight to the Bombay High Court and obtained a writ of mandamus (a court order commanding a government authority to do its duty) directing the customs authorities to release the goods. The High Court issued this order on October 15, 2020.

Absolute confiscation ordered

While the High Court's mandamus was in place, the appellate process continued. On December 24, 2020, the Commissioner (Appeals)—the second-level appellate authority under the Customs Act—set aside the original release orders. He ordered absolute confiscation of the goods. The importers could not redeem them. The goods were to be forfeited to the government.

The importers went back to the Bombay High Court. On January 5, 2021, the High Court stayed the appellate order and directed compliance with its earlier mandamus for release.

The Union of India appealed to the Supreme Court.

Why the Supreme Court stepped in

The Supreme Court bench, led by Justice Dinesh Maheshwari, heard the matter on May 5, 2021. The Union argued that the goods were prohibited goods under Section 2(33) of the Customs Act (which defines prohibited goods as any goods whose import or export is restricted or prohibited by law). Since the import restrictions under the FTDR Act were valid—upheld by the Supreme Court itself in Agricas—the goods were liable to absolute confiscation under Section 111(d).

The importers argued that they had acted under interim orders of the Bombay High Court. They had paid redemption fines. The Adjudicating Authority had allowed release. The High Court had issued mandamus. They had done everything right.

The Supreme Court disagreed. Its reasoning turned on a single critical fact: by the time these importers obtained their interim orders, other High Courts—including the Rajasthan High Court and the Delhi High Court—had already dismissed similar challenges to the import ban. The importers knew, or ought to have known, that the legal basis for their imports was shaky.

"Imports effected under the cover of interim orders of High Courts, when similar challenges had already been dismissed by other High Courts, cannot be treated as bona fide," the court held. The importers had to face the consequences in law.

The discretion to confiscate absolutely

The court also addressed the key question under Section 125(1) of the Customs Act. That section gives customs officers the discretion to allow redemption of confiscated goods on payment of a fine. But the court clarified that this discretion is not automatic—especially for prohibited goods.

Where import restrictions serve vital public policy—like protecting domestic agriculture—absolute confiscation may be the appropriate course. The power to allow redemption is discretionary, not a right the importer can demand.

The court stayed the Bombay High Court's orders. It directed that the goods would be dealt with according to law, noting that re-export remained an available option for the importers.

What this means for importers

For any business importing goods under a government restriction, this judgment carries a clear warning. An interim order from one High Court does not give you a free pass—especially if other courts have already rejected similar challenges. The Supreme Court has made it clear: you import at your own risk, and you cannot claim good faith if you ignore the legal landscape around you.

THE PLAY: Before importing under an interim court order, check whether any other High Court has already dismissed a similar challenge—if yes, your imports will not be considered bona fide and absolute confiscation is a real risk.

The yellow peas stayed in the warehouse. The importers' court order turned out to be a shield that the Supreme Court simply set aside.