Chhattisgarh Police Unravel Rs 120-Crore Khair Smuggling Network Spanning Six States

A months-long investigation by Chhattisgarh Police has uncovered an alleged interstate smuggling operation dealing in khair wood — the raw material for katha, the catechu extract used in paan across India — with an estimated turnover of Rs 120 crore.

The case began on June 17, when police in Mahasamund district stopped a truck that had entered from Odisha carrying 23,350 kg of khair wood destined for katha-making units in Himachal Pradesh. On checking the vehicle's papers, officers found that a National Transit Pass System certificate, purportedly issued by the Forest Department in Kurnool, Andhra Pradesh, had been forged. The document is normally used to certify the legal movement of forest produce through checkpoints. The truck was seized, setting off a wider probe.

"So far, through multiple raids across Chhattisgarh, Haryana, Odisha, Himachal and Madhya Pradesh, we have seized over 50 tons of Khair wood in the last two months. We have arrested 12 people in the case so far," said Prabhat Kumar, Superintendent of Police, Mahasamund district.

A case was registered on July 9 against the accused for organised crime, cheating, forgery and criminal conspiracy under Sections 318(4), 338, 336(3), 340(2), 61(2), 3(5) and 111 of the Bharatiya Nyaya Sanhita, along with Sections 41(2)(b)(d) and 52(1) of the Indian Forest Act, 1927.

At the centre of the alleged network, investigators say, is Manish Agarwal of Sarsiwa in Chhattisgarh, from whose premises police seized Rs 81 lakh in cash on September 7. Agarwal has since secured anticipatory bail from the High Court, arguing that the case describes him only as a middleman, that there is no material linking him to the forgery of the no-objection certificate, and that no allegation of deception has been made against him. He was separately arrested this month by Raigarh police in Chhattisgarh and remains in judicial custody in a khair wood smuggling case registered last year. He has also been named in multiple FIRs and forest offence reports.

According to the police, Agarwal and at least three other businessmen linked to katha companies in Himachal Pradesh are connected to eight shell firms allegedly used to generate fake invoices worth a combined Rs 120 crore over two years. More than 10 mule accounts were allegedly used to move and launder the proceeds, and efforts are under way to trace the money.

The wood was allegedly sourced by felling trees in Balangir and Bargarh districts of western Odisha, along with other Odisha districts and parts of the Raigarh-Jashpur belt in Chhattisgarh. It then passed through Maharashtra, Madhya Pradesh, Uttar Pradesh or Jharkhand before reaching Himachal Pradesh via Haryana, with forged transit documents presented at each checkpoint.

The scale of the operation — six states, five routes, eight shell companies and a two-year run — has raised questions about how it went undetected for so long. Discrepancies in GST records eventually helped investigators connect the pieces.