Summary and Analysis of ITC Limited vs State of Karnataka & Anr 2025 INSC 1111
1. Heading of the Judgment
ITC Limited vs. State of Karnataka & Anr. (Civil Appeal Nos. 11798-11799 of 2025, arising from SLP (C) Nos. 16830 of 2021 & 18336 of 2022)
Date of Judgment: September 12, 2025
Coram: Justice R. Mahadevan and Justice J.B. Pardiwala
Citation: 2025 INSC 1111
2. Related Laws and Legal Provisions
This judgment primarily interprets and applies the following laws:
The Legal Metrology Act, 2009 (the 2009 Act):
Section 15: Power of inspection, search, and seizure.
Section 2(n): Definition of "premises".
Sections 36(1), 42, 43, 48, 50: Provisions related to offences, penalties, and compounding.The Legal Metrology (Packaged Commodities) Rules, 2011 (the 2011 Rules):
Rule 24(a): Mandates specific declarations on wholesale packages.The Code of Criminal Procedure, 1973 (CrPC):
Section 93: Power to issue search warrant.
Section 100(4) & (5): Procedure for search, requiring two or more independent witnesses and preparation of a seizure mahazar.
Section 102: Power of police officer to seize certain property.
Section 165: Search by a police officer without a warrant during an investigation (recording reasons is mandatory).Constitution of India, Article 226: Power of High Courts to issue certain writs.
3. Basic Details of the Case
This appeal arose from a challenge to a search and seizure operation conducted by the Legal Metrology Department of Karnataka on the appellant, ITC Limited.
The Incident: On July 2, 2020, officials from the Legal Metrology Department (Respondent No. 2) inspected ITC's warehouse in Bengaluru and seized 7,600 packages of 'Classmate' exercise books. They alleged a violation of Rule 24(a) of the 2011 Rules for not having mandatory declarations printed directly on the wholesale packages, instead of on affixed labels.
Notices Issued: Simultaneously, the officials issued a seizure notice and a compounding notice to ITC on the same day.
High Court Proceedings:
Single Judge: ITC filed a writ petition. The Single Judge allowed it, quashed the notices, and ordered the release of the goods, holding the search and seizure were conducted without jurisdiction as they violated mandatory CrPC procedures.
Division Bench: The State appealed. The Division Bench reversed the Single Judge's order, holding that a search warrant was not needed for "open" business premises and that the action was legal.
Review Petition: ITC's review petition against the Division Bench's judgment was dismissed.Supreme Court: ITC filed two Special Leave Petitions (SLPs) challenging both the Division Bench's judgment and the dismissal of its review petition, which were clubbed and heard together.
4. Explanation of the Judgment
The Supreme Court allowed ITC's appeal, setting aside the Division Bench's order and restoring the Single Judge's order. The Court provided an in-depth analysis of the legal framework governing search and seizure under special enactments like the Legal Metrology Act.
A. Core Legal Issue: Validity of the Search and Seizure
The central question was whether the inspection, search, and seizure conducted by the officials under Section 15 of the 2009 Act without a warrant and without following the procedures under the CrPC was lawful.
The Supreme Court's Analysis and Reasoning:
1. Mandatory Requirement of "Reasons to Believe":
The Court emphasized that Section 15(1) of the 2009 Act uses the phrase "if he has any reason to believe." This is a condition precedent for any action—be it inspection, search, or seizure. The official must record these reasons based on information (oral or written) or personal knowledge before initiating any action. This recording is not a mere formality but a vital safeguard against arbitrary state action. In this case, the seizure receipt and compounding notice issued on the same day disclosed no such recorded reasons, indicating a clear non-application of mind and a violation of the mandatory statutory procedure.
2. Application of the Code of Criminal Procedure (CrPC):
Section 15(4) of the 2009 Act explicitly states that "every search or seizure made under this section shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973." The Court analyzed the relevant CrPC provisions:
Sections 93 & 100 CrPC: The Court held that for a search to be conducted, a warrant is generally necessary. Section 100(4) CrPC mandatorily requires the presence of two or more independent and respectable witnesses from the locality to witness the search. Section 100(5) requires these witnesses to sign the seizure mahazar.
Fact of the Case: The only witness present was the driver of the Assistant Controller. The Court held he could not be considered an "independent witness," thus fatally violating the mandatory procedure under Section 100(4) CrPC.
"Open" vs. "Closed" Premises: The Court rejected the Division Bench's distinction that CrPC procedures apply only to "closed" premises. It held that a commercial warehouse, even if open during business hours, is not a public place where anyone can walk in. Access is restricted to those with business, and therefore, the constitutional and procedural safeguards against arbitrary search cannot be bypassed. The definition of "premises" under Section 2(n) of the 2009 Act is exhaustive and includes warehouses and godowns, making the procedural safeguards applicable.
3. Search Under Section 165 CrPC:
The Court clarified that even if an officer proceeds without a warrant under exigent circumstances using Section 165 CrPC, it is still mandatory to (i) record reasons in writing and (ii) comply with the witness requirement under Section 100(4) CrPC. Since neither was done in this case, the action was illegal.
4. Precedents Relied Upon:
The Court fortified its reasoning by citing several landmark judgments:
State of Rajasthan v. Rehman (AIR 1960 SC 210): Held that when a special Act (like the Excise Act) mandates that searches be carried out per the CrPC, the conditions of Section 165 CrPC (recording reasons) must be strictly followed. Non-compliance renders the search illegal.
State of Punjab v. Baldev Singh (AIR 1999 SC 2378): Emphasized that the legitimacy of the judicial process is compromised if courts condone acts of lawlessness by investigating agencies. The means of achieving justice must remain above board.
Ravinder Kumar v. State of Haryana (AIR 2024 SC 4311): Held that a prosecution based solely on evidence gathered through an illegal search is an abuse of the process of law and must be quashed.
5. Nature of the Alleged Violation:
The Court noted that the alleged violation was, at best, technical. ITC had affixed labels containing all mandatory declarations on the Corrugated Fibreboard Containers (CFCs), which were used for transportation and storage. The department's contention was that the declarations needed to be printed directly on the package, not affixed as a label. The Court referred to its own judgment in State of Maharashtra v. Raj Marketing (2011) 15 SCC 525, which clarified that there is no absolute bar on affixing labels on wholesale packages.
B. Supreme Court's Directions and Final Outcome
The Supreme Court concluded that the entire process—from the initiation of the search to the seizure of goods—was illegal and unsustainable in law due to multiple procedural violations:
No recorded "reasons to believe" as required by Section 15 of the 2009 Act.
No search warrant was obtained.
Mandatory procedure of having two independent witnesses (Section 100(4) CrPC) was not followed.
The simultaneous issuance of a seizure notice and a compounding notice on the same day showed a pre-meditated action without application of mind.
Final Order:
The appeals were allowed.
The impugned judgment of the Division Bench of the Karnataka High Court was set aside.
The order of the Single Judge, which quashed the seizure and compounding notices and directed the release of the seized goods, was restored.
All proceedings emanating from the illegal search and seizure were quashed.
No costs were awarded.
This judgment serves as a stern reminder to all enforcement authorities that the power of search and seizure, though necessary, is a drastic one and must be exercised strictly in accordance with the law, respecting the procedural safeguards designed to protect citizens from arbitrary state action.