[ Madras High Court — Madurai Bench ]

Madurai Bench: Municipal Waste Must Return to Country of Origin, Not Dubai

The Madras High Court's Madurai Bench has rejected two Sivakasi paper manufacturers' attempt to re-export illegally imported municipal solid waste to Dubai instead of Canada and the United States, imposing a 60-day deadline and environmental compensation for delay.

Madras High Court, Madurai Bench — 10 July 2026 — Manaswi Singh — 9 min read

Two Sivakasi-based paper manufacturers who imported consignments declared as waste paper but found to contain municipal solid waste have been directed to re-export the goods to Canada and the United States within 60 days. Justice D. Bharatha Chakravarthy, sitting singly at the Madurai Bench of the Madras High Court, pronounced a common order on 19 June 2026 in seven connected writ petitions, rejecting every substantive prayer advanced by the importers — including a bid to redirect the waste to Dubai, a request to dispose of it within India, and a claim that customs-issued waiver certificates bound the shipping liner and Container Freight Stations to forgo detention charges. The judgment draws on Rule 15(2) of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, Article 9(2) of the Basel Convention, and the Division Bench precedent in M/s. K. Steamship Agencies Pvt. Ltd. v. M/s. Balaji Dekors to resolve each issue against the petitioners.

The Goods and How They Were Detained

M/s. Sripathi Paper and Boards Pvt. Ltd., represented by its Deputy General Manager (Purchase), placed a purchase order dated 12 March 2022 with M/s. Gallops, Canada, for “Waste Paper – News & Pams.” A Bill of Entry dated 6 June 2022 was filed for 121.970 metric tonnes carried in five 40-foot containers. After the goods were unloaded at the Container Freight Station of M/s. A.L.S. Terminal Private Limited, Tuticorin, officers of the Directorate of Revenue Intelligence inspected the containers on 20 June 2022 and found a mixture of used PET bottles, street sweepings, waste food paper and plastic parcels, broken glass bottles, waste plastic containers, and used soft-drink cans. The Tamil Nadu Pollution Control Board confirmed on inspection that the cargo was municipal solid waste. The goods were formally seized on 8 July 2022.

M/s. Rajarajeswari Krafts Pvt. Ltd. faced parallel proceedings. It had imported goods described as “Waste Paper – News & Pams” and “Waste Paper – ONP 6” under four Bills of Entry dated between 27 May 2022 and 7 July 2022, sourced from M/s. Gallops in Canada, M/s. Exim Routes Inc. in the USA, and M/s. Exim Routes Pte. Ltd. in Singapore. The containers were detained after a visual examination revealed the same category of municipal solid waste, and the company's own representative admitted the presence of such waste. Separate Seizure Mahazars were drawn from 8 July 2022 onwards.

Show-cause notices were issued to both companies under Section 124 of the Customs Act, 1962. After affording personal hearings, the adjudicating authority in each case concluded that the imports were misdeclared. For M/s. Sripathi, an Order-in-Original dated 28 February 2024 ordered confiscation and re-export at the importer's cost, with a penalty. For M/s. Rajarajeswari, an Order-in-Original dated 26 June 2024 confiscated goods collectively valued at Rs. 48,59,118/- and imposed a penalty of Rs. 5,00,000/- on the company. Both companies paid their respective penalties without appealing the orders.

The Dispute Before the High Court

After the adjudication orders were passed, both companies sought permission to re-export the consignments to Dubai rather than to Canada or the USA, citing lower freight costs and communications from their respective foreign suppliers directing the goods to Jebel Ali Port, Dubai. When customs authorities did not grant that permission and the shipping liner declined to act on the waiver certificates issued by Customs, the companies filed writ petitions in September 2024 under Article 226 of the Constitution of India.

The writ petitions collectively raised four distinct reliefs. First, both companies sought to quash the Orders-in-Original and obtain permission to re-export to Dubai or, alternatively, to dispose of the goods within India through recycling, cement kilns, or waste-to-energy plants. Second, they sought directions compelling the Customs Department and the Directorate of Revenue Intelligence to bear the container detention and ground rental charges accumulating at the Container Freight Stations. Third, they sought directions compelling the shipping liner, M/s. Maersk Line India Pvt. Ltd., to honour the waiver certificates and forgo detention charges. Fourth, they sought action against the shipping liner and the Container Freight Station operators — including suspension or revocation of their approvals under Regulation 11 of the Sea Cargo Manifest and Transhipment Regulations, 2018, and Regulation 12 of the Handling of Cargo in Customs Areas Regulations, 2009.

The shipping liner placed a memo before the court disclosing that the contractual detention charges amounted to Rs. 14,01,95,605/- for M/s. Sripathi and Rs. 28,19,09,255/- for M/s. Rajarajeswari, totalling Rs. 42,21,04,860/-. The liner offered to waive Rs. 38,21,04,860/- and accept a consolidated Rs. 4,00,00,000/- from both petitioners jointly in full and final settlement.

How the Bench Reasoned on Each Issue

Validity of the adjudication orders. Justice Chakravarthy declined to interfere with either Order-in-Original at the threshold. The court observed that both companies had participated in the adjudication proceedings, admitted the illegality, pleaded inadvertence to seek lower penalties, paid the penalties imposed, and never filed an appeal under Section 128 of the Customs Act, 1962. By September 2024 — well after the orders had attained finality — they sought to challenge the orders only because their request to re-export to Dubai had failed. A belated writ challenge in those circumstances was not countenanced.

Re-export to Dubai. The court held that Rule 15(2) of the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, uses the word “re-export” deliberately. Had the rule intended to permit dispatch to any country of the importer's choice, the word “export” would have been used. “Re-export” necessarily connotes return to the country of origin. The court reinforced this by reference to Article 9(2) of the Basel Convention, which requires illegal transboundary waste to be “taken back by the exporter or the generator or, if necessary, by itself into the State of export.” The court found that permitting diversion to Dubai would contradict both the domestic rules and India's treaty obligations. The court also noted that on a prior occasion a similar attempt to route goods to Dubai had been declined by Dubai authorities. The prayer for re-export to Dubai was rejected.

Disposal within India. The court rejected this prayer with equal firmness. The Office Memorandum dated 10 January 2023, on which the petitioners relied, was read as expressly prohibiting the presence of municipal solid waste, biomedical waste, and post-consumer domestic waste in imported consignments. The relaxation in clause (vii) thereof applied only to permissible contaminants exceeding threshold limits — it could not be extended to categories of waste whose import is prohibited outright. The court held that allowing India to be used as a disposal destination would violate Rule 15(2), India's Basel Convention obligations, Article 48-A of the Constitution, and the right to life under Article 21 as elaborated by the Supreme Court in State of Telangana v. Mohd. Abdul Qasim, (2024) 6 SCC 461.

Container Freight Station charges. The court applied the Division Bench ruling in M/s. K. Steamship Agencies Pvt. Ltd. v. M/s. Balaji Dekors (W.A. No. 1017 of 2017, decided 4 July 2024). That bench held that a demurrage and detention waiver certificate can only be issued where adjudication ends in the importer's favour without any duty, fine, or penalty. Where an importer is found guilty of misdeclaration or import of prohibited goods, demurrage charges must be paid; any waiver certificate issued despite such guilt is invalid. Since the adjudication in both cases ended against the petitioners, the waiver certificates already issued were declared invalid and the petitioners remained liable for CFS charges. However, the court directed that re-export shall not be obstructed merely because of a dispute over those charges — the Container Freight Stations were told they could pursue recovery through appropriate proceedings after the goods leave India.

Shipping liner charges. The same principle applied to M/s. Maersk Line India Pvt. Ltd. The court recorded the liner's memo offering to waive Rs. 38,21,04,860/- and accept Rs. 4,00,00,000/- jointly from both petitioners. Separately, the court noted that Regulation 10(1)(g) of the Sea Cargo Manifest and Transhipment Regulations, 2018 imposes a statutory obligation on an authorised carrier to be responsible for re-export of hazardous goods where such goods are ordered to be exported back to the exporting country. Non-payment of dues cannot be used as a ground to retain the goods in India.

The Waste Colonialism Finding and General Directions

Justice Chakravarthy used the judgment to address the broader pattern. He observed that India already generates more than 1,70,000 tonnes of municipal solid waste daily and that, at 2022 exchange rates, the waste paper imported by M/s. Sripathi worked out to approximately Rs. 20/- per kilogram — a cost that raised questions about the commercial rationale for the imports. The court found the communications exchanged by both petitioners with their foreign suppliers to be worded identically, suggesting an orchestrated modus operandi rather than isolated inadvertence.

The court directed that the Central Government or any authority authorised under Section 19 of the Environment (Protection) Act, 1986, shall initiate prosecution proceedings in deserving cases, noting that Section 15 of that Act provides for imprisonment up to five years. The court further observed that if investigation establishes that the import was knowingly and purposely done, the facts may attract Section 152 of the Bharatiya Nyaya Sanhita, 2023, which penalises acts endangering sovereignty, unity and integrity of India, carrying imprisonment up to life.

The court also noted the Comptroller and Auditor General's Report No. 16 of 2018 on Inland Container Depots and Container Freight Stations, which had flagged 469 containers carrying hazardous or prohibited material that had been abandoned for periods ranging from one to seventeen years. The judgment asked the Government of India to revisit the wording of the Office Memorandum dated 10 January 2023 to expressly mandate re-export — rather than domestic disposal — of biomedical waste, municipal solid waste, and post-consumer domestic waste that are expressly prohibited imports. It further directed that instances involving foreign exporters who repeatedly engage in such conduct be raised through diplomatic channels and appropriate bilateral engagements.

Order

The Madurai Bench disposed of all seven writ petitions on 19 June 2026 on the following principal terms:

All prayers in W.P.(MD) Nos. 24097 to 24099 of 2024 and W.P.(MD) Nos. 24101 to 24104 of 2024 are rejected as devoid of merit.
The petitioners shall re-export the goods to the respective ports of origin within 60 days from receipt of a web-copy of the order.
Container Freight Stations may raise invoices and demand detention and demurrage charges from the respective petitioners, but the re-export process shall not be obstructed on account of any dispute over such charges; recovery may be pursued through appropriate fora.
If re-export is not completed within 60 days, environmental compensation at Rs. 50,000/- per day per petitioner shall apply from the 61st day until re-export, recoverable by the Tamil Nadu Pollution Control Board under the Polluter Pays Principle.
The petitioners are jointly liable to pay Rs. 4,00,00,000/- to M/s. Maersk Line India Pvt. Ltd. together with applicable freight charges for the return voyage; disputes between the parties on other claims shall not stop the re-export.
If re-export is not completed within 60 days, the competent authority shall file a complaint and prosecute the petitioners, their directors, and responsible persons for the offence punishable under Section 19 of the Environment (Protection) Act, 1986.
General observations and directions regarding diplomatic action, revision of the Office Memorandum, and waste-paper segregation policy shall be considered by the concerned authorities.
Each petitioner shall pay costs of Rs. 10,000/- to the first respondent. The connected Miscellaneous Petitions are closed.