The Supreme Court of India, in a significant ruling, has held that an inspection, search, and seizure conducted under the Legal Metrology Act, 2009, without a prior warrant and without recording “reasons to believe,” is illegal and unsustainable in law. A bench comprising Justices J.B. Pardiwala and R. Mahadevan set aside a Karnataka High Court Division Bench judgment and quashed seizure and compounding notices issued to ITC Limited, holding that procedural safeguards under the Act and the Code of Criminal Procedure, 1973 (Cr.P.C.) are mandatory and cannot be bypassed.
The key legal issue before the court was whether the inspection and seizure conducted by a Legal Metrology Officer at ITC’s premises, without a warrant, was unlawful and violative of the principles of natural justice. The court answered in the affirmative, restoring an order by a Single Judge of the High Court who had initially quashed the proceedings.
Background of the Case
The case originated on July 2, 2020, when a Legal Metrology Officer inspected the Bengaluru warehouse of ITC Limited, a company engaged in the business of stationery items under its brand ‘Classmate’. The officer seized 7,600 packages of ‘Classmate’ exercise books, alleging a violation of Rule 24(a) of the Legal Metrology (Packaged Commodities) Rules, 2011, which is punishable under Section 36(1) of the 2009 Act.
The alleged violation was that the mandatory declarations on the wholesale packages were affixed as labels instead of being directly printed on the corrugated fibreboard containers (CFCs). On the same day, the authorities issued a seizure notice and a compounding notice to the appellant.
ITC Limited challenged these notices before the Karnataka High Court via a writ petition, arguing that the search was conducted without a warrant and in violation of procedural norms. A Single Judge allowed the petition, quashing the notices and holding the search and seizure to be without jurisdiction. However, on appeal by the State of Karnataka, a Division Bench of the High Court reversed this decision, stating that a warrant is not required for actions under Section 15 of the 2009 Act. This led to ITC Limited’s appeal before the Supreme Court.
Arguments of the Parties
ITC Limited (Appellant): The learned Senior Counsel for ITC argued that there was no violation of the rules, as the CFCs were meant for transportation and protection, not as “wholesale packages.” It was submitted that Section 15 of the 2009 Act mandates the officer to have “reasons to believe” before conducting a search, which were not recorded. The simultaneous issuance of seizure and compounding notices was highlighted as an act of non-application of mind.
Furthermore, the appellant contended that the search violated Section 100(4) of the Cr.P.C., which requires the presence of two or more independent witnesses. In this instance, only one witness, a driver employed by the authorities, was present. They argued that the warehouse was not a public place, necessitating a warrant for entry, and that the writ petition was maintainable as the state’s action was without jurisdiction.
State of Karnataka (Respondents): The counsel for the respondents argued that the inspection was lawful and aimed at protecting consumer rights. It was contended that the warehouse was a commercial premises, not a private dwelling, and thus no warrant was required under Section 15 of the Act. The respondents maintained that the seized packages were “wholesale packages” and that the declarations were non-compliant with the rules.
They further submitted that the procedural safeguards of the Cr.P.C. were not applicable in their entirety and that the appellant had an alternative statutory remedy under Section 50 of the Act, making the writ petition improper.
Supreme Court’s Analysis
The Supreme Court undertook a detailed analysis of Section 15 of the Legal Metrology Act, 2009, and relevant provisions of the Cr.P.C. The bench concluded that Section 15 explicitly requires an officer to have “reason to believe” that an offence has been or is likely to be committed before conducting a search, inspection, or seizure.
The judgment emphasized that Section 15(4) of the Act mandates that every search or seizure be carried out in accordance with the Cr.P.C. The Court rejected the Division Bench’s distinction between “open” and “closed” premises, stating that the definition of “premises” in Section 2(n) of the Act is exhaustive and includes warehouses, making the procedural requirements applicable irrespective of whether the premises were open at the time of inspection.
The Court held that a search or inspection ordinarily requires a warrant as per Section 93 of the Cr.P.C. Even in exigent circumstances where a search is conducted without a warrant under Section 165 of the Cr.P.C., the officer is mandated to record the reasons in writing. The Court observed, “In every search conducted under a special enactment without a warrant, the requirement of recording reasons to believe is mandatory.”
Citing the precedent in State of Rajasthan v. Rehman, the Court reiterated that since the Legal Metrology Act requires searches to be carried out per the Cr.P.C., the provisions of Section 165 of the Code are squarely attracted. Failure to record reasons, the court held, renders the search illegal. The judgment stated, “The recording of reasons does not confer on the officer jurisdiction to make a search, though it is a necessary condition for making a search.”
The Court also found a clear violation of Section 100(4) of the Cr.P.C., as the search was witnessed by a driver of the inspecting authority, who cannot be considered an “independent witness.”
The Decision
The Supreme Court concluded that the entire proceedings, from the search to the seizure, were illegal and could not be sustained. The bench found that the authorities had disregarded the mandatory safeguards under Section 15 of the 2009 Act as well as Sections 100(4) and 165 of the Cr.P.C.
In its concluding remarks, the Court observed: “In the present case, the respondents not only violated Section 15 of the 2009 Act, but also failed to comply with Sections 100(4) and 165 Cr.P.C. Further, there is nothing on record to show that the search was so imminent as to justify dispensing with a warrant.”
The Court allowed the appeal, quashed the judgment of the Division Bench, and restored the order of the Single Judge. Consequently, the seizure and compounding notices issued to ITC Limited stand quashed.
