Katha — the catechu extract made from the heartwood of the Khair tree — is commonly used in paan and is a staple of paan shops across India. But in the forests of Western Odisha, the khair tree has become the raw material for an alleged Rs 120 crore interstate smuggling network that the Chhattisgarh Police say they have spent three months unravelling.

The operation allegedly came to light on June 17, when Mahasamund district police intercepted a truck arriving from Odisha carrying 23,350 kg of khair wood bound for katha-making companies in Himachal Pradesh. When officers checked the paperwork, they found that the National Transit Pass System (NTPS) clearance certificate purportedly issued by the Forest Department, Kurnool, Andhra Pradesh, had been forged — a document normally used to certify the legal movement of forest produce through checkpoints. Officers seized the truck, and a much larger investigation followed.=

“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.

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A case was registered against the accused on July 9 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 (BNS) and Sections 41(2)(b)(d) and 52(1) of the Indian Forest Act, 1927.

The investigation has laid bare a complex network. At its alleged centre is Manish Agarwal of Sarsiwa, Chhattisgarh, from whose premises police seized Rs 81 lakh in cash on September 7. Agarwal has since obtained anticipatory bail from the High Court in the case, pleading before the court that he is described in the case as a middleman — there is no material to show his involvement in the NOC forgery and there is no allegation that he deceived anyone.

Incidentally, Agarwal — named in multiple FIRs and forest offence reports — was arrested this month by Chhattisgarh’s Raigarh police. He is currently in judicial custody in a separate Khair wood smuggling case from last year.

Linked to Agarwal and at least three other businessmen connected to katha companies in Himachal Pradesh are eight shell firms allegedly used to generate fake invoices collectively worth Rs 120 crore over a period of two years. More than 10 mule accounts were allegedly used to move and launder the proceeds. Efforts are being made to trace the money, the police said.

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The wood was sourced by cutting trees in Balangir and Bargarh districts of western Odisha, along with several other Odisha districts and parts of the Raigarh-Jashpur belt in Chhattisgarh, passing through Maharashtra, Madhya Pradesh, Uttar Pradesh or Jharkhand before reaching Himachal Pradesh via Haryana. At each checkpoint, forged NTPS documents were presented.

The sheer logistics of the operation — six states, five routes, eight shell companies and a two-year run — raise questions about how it evaded detection for so long. GST discrepancies eventually helped investigators connect the pieces.