ITC Limited v. State of Karnataka 2025 INSC 1111 - CrPC - Legal metrology Act
Legal metrology Act, 2009 - Section 15 - There must be reasons to believe both for conducting a search or inspection of premises and for seizure of materials therefrom. In addition, to satisfy the requirements of Section 15, the officials must also comply with the provisions of the Code of Criminal Procedure relating to search and seizure - The procedure prescribed under the Cr.P.C. must be followed even with respect to goods stored in warehouses or godowns, irrespective of whether open or closed.- Merely because a place is open at the time of visit does not mean that the requirements under Section 15 or the Cr.P.C. can be bypassed. Any officer intending to conduct a search or inspection and effect a seizure must necessarily follow the prescribed procedure and cannot forcibly enter premises without warrant or reasons duly recorded (Para 11– ) The reference in Section 15(4) to the provisions of the Cr.P.C. cannot be read to mean that Section 165 Cr.P.C can be invoked only if an offence has already been registered. (Para 18) Compliance with statutory procedures, including recording “reasons to believe” before initiating search or seizure, is incumbent upon officials; non-compliance renders the action futile and results in arbitrary excise of authority. (Para 23)
Code of Criminal Procedure 1973- Section 100, 165 - Circumstances and pre-requisites for searches without warrant: As a general rule, every search must be preceded by a warrant and reasons to believe must be recorded. Section 165 applies where, due to exigent circumstances, it is not possible to obtain a search warrant. In such cases, the officer may, after recording his reasons in writing and specifying, as far as possible, the thing for which the search is to be made, conduct or cause a search of the place. Section 165(4) provides that the general provisions relating to searches contained in Section 100 also apply to searches under Section 165- Even under Section 165, the existence of reasons to believe that an imminent search is necessary, must be recorded, with as much detail as possible. The mandate of Section 100(4) must also be satisfied even in searches under Section 165. (Para 17)
Code of Criminal Procedure 1973- Unless the provisions of the Cr.P.C. are explicitly excluded, the same shall apply to special enactments as well. (Para 19.5)
Natural Justice and Due Process Of Law -Observance of due process of law and the principles of natural justice being intertwined, is a legal necessity to ensure that the action of the authorities does not result in manifest arbitrariness or abuse and misuse of power by those empowered to conduct inspection, search, and/or seizure. When the law prescribes a particular procedure to be followed while taking action, the same must be strictly adhered to. (Para 20.1)
Code of Criminal Procedure 1973- Section 100 - The presence of two respectable independent witnesses from the locality mandatory. It is significant to note that such witnesses may also be drawn from a different locality, provided they meet the requirements of independence and respectability. (Para 21)
Prejudice - Where the initial proceedings are vitiated, all subsequent proceedings are unsustainable. Any act in violation of law cannot be brushed aside on the ground that no prejudice was caused; every violation of law is deemed to cause some prejudice. (Para 21)
Case Info
Case Name and Neutral Citation
- Case Name: ITC Limited v. State of Karnataka & Anr.
- Neutral Citation: 2025 INSC 1111
Coram (Judges)
- Justice J.B. Pardiwala
- Justice R. Mahadevan
Judgment Date
- September 12, 2025
Caselaws and Citations Referred
- State of Maharashtra and Others v. Raj Marketing and Others(2011) 15 SCC 525
- State of Madhya Pradesh v. Mubarak AliMANU/SC/0038/1959 : AIR 1959 SC 707
- Radhika Agarwal v. Union of India2025 LiveLaw SC 255
- Narayanappa and others v. Commissioner of Income Tax, BangaloreMANU/SC/0124/1966 : AIR 1967 SC 623
- Ashok Munilal Jain and another v. the Assistant Director, Directorate of Enforcement2018 (16) SCC 158
- State of Punjab v. Baldev Singh and othersMANU/SC/0981/1999 : AIR 1999 SC 2378
- State of Rajasthan v. RehmanMANU/SC/0181/1959 : AIR 1960 SC 210
- Ravinder Kumar v. State of HaryanaMANU/SC/1006/2024 : AIR 2024 SC 4311
- Aslam Mohammad Merchant v. Competent Authority and Ors.MANU/SC/2959/2008 : (2008) 14 SCC 186
- H. N. Rishbud and Inder Singh v. The State of DelhiMANU/SC/0049/1954 : 1955CriLJ526
Statutes/Laws Referred
- Legal Metrology Act, 2009
- Section 15 (Power of inspection, seizure, etc.)
- Section 36(1)
- Section 42, 43, 48, 50, 51
- Section 2(n) (Definition of “premises”)
- Legal Metrology (Packaged Commodities) Rules, 2011
- Rule 24(a)
- Rule 2(l), 18(2), 27
- Code of Criminal Procedure, 1973 (Cr.P.C.)
- Sections 93, 94, 95, 99, 100(4), 100(5), 102, 153, 165, 173, 187, 226, 4(1), 47, 48, 51, 52, 70, 72, 74, 77, 78, 79
- Indian Penal Code
- Section 26 (Definition of “reason to believe”)
- Section 187
- Constitution of India
- Article 226
Questions and Answers
1. What was the central legal dispute in the ITC Limited v. State of Karnataka case?
The main legal dispute revolved around the legality of an inspection and seizure conducted by Respondent No. 2 (a legal metrology officer) at ITC Limited's warehouse. ITC Limited argued that the search and seizure were unlawful and violated principles of natural justice because they were conducted without a prior search warrant, without recording "reasons to believe," and without adhering to the procedural safeguards outlined in the Code of Criminal Procedure, 1973 (Cr.P.C.), specifically Sections 100(4) and 165. The respondents, on the other hand, contended that a warrant was not required for inspections under the Legal Metrology Act, 2009, especially in a commercial warehouse, and that Cr.P.C. provisions applied only to a limited extent.
2. What specific procedural violations were alleged by ITC Limited regarding the search and seizure?
ITC Limited alleged several procedural violations:
- Lack of search warrant: No warrant was obtained before entering and searching their commercial warehouse.
- Absence of "reasons to believe": The seizure receipt and compounding notice did not disclose any recorded "reasons to believe" as mandated by Section 15 of the 2009 Act, which is a prerequisite for inspection or seizure.
- Non-compliance with Cr.P.C. Section 100(4): Only one witness was present during the search, and that witness (a driver employed by Respondent No. 2) was not an "independent witness" as required by law.
- Simultaneous issuance of notices: Seizure and compounding notices were issued simultaneously, denying ITC Limited an opportunity to be heard, thus violating principles of natural justice.
- Inapplicability of 2009 Act/2011 Rules: ITC argued that the seized corrugated fibreboard containers (CFCs) were not "wholesale packages" but for protection and transportation, and even if they were, the declarations were affixed, which a Supreme Court judgment (State of Maharashtra and Others v. Raj Marketing and Others) and subsequent clarifications indicated was permissible.
3. How does the Legal Metrology Act, 2009, specifically Section 15, govern inspection and seizure powers?
Section 15 of the Legal Metrology Act, 2009, grants the Director, Controller, or any legal metrology officer the power to inspect, search, and seize. This power can be exercised if the officer has "reason to believe," based on written information, personal knowledge, or otherwise, that an offense under the Act has been or is likely to be committed in relation to goods, weights, or measures kept, concealed, or transported. Critically, Section 15(4) explicitly mandates 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, relating to searches and seizures." This means that the procedural safeguards of the Cr.P.C. are not optional but are integral to searches and seizures conducted under the 2009 Act.
4. What is the significance of "reasons to believe" in conducting a search or seizure, according to the Supreme Court?
The Supreme Court emphasized that the existence of "reasons to believe" is a mandatory condition precedent for conducting an inspection, search, or seizure under Section 15 of the 2009 Act. These reasons must be recorded, reflect an application of mind based on relevant information, and cannot be founded on mere suspicion or subjective satisfaction. The belief must be held in good faith and have a rational connection to the purpose of the section. Failure to record such reasons vitiates the entire process, as it goes to the root of the jurisdiction to initiate such actions, preventing arbitrary exercise of authority and upholding due process.
5. What are the requirements for witnesses during a search under Section 100(4) of the Cr.P.C., and why was it relevant in this case?
Section 100(4) Cr.P.C. mandates that, before conducting a search, the officer must call upon "two or more independent and respectable inhabitants of the locality" to witness the search. These witnesses must sign the "mahazar" (a document recording the search and seizure), and a copy must be delivered to the occupant. In the ITC case, only one witness, a driver employed by Respondent No. 2, was present. The Supreme Court found this to be a clear violation of Section 100(4) because the witness was not independent, and the respondents failed to demonstrate efforts to secure independent witnesses. This procedural lapse further contributed to the illegality of the search and seizure.
6. Does the distinction between "open" and "closed" premises affect the requirement for a search warrant under the Legal Metrology Act, 2009, in conjunction with Cr.P.C.?
No, the Supreme Court clarified that the distinction between "open" and "closed" premises does not eliminate the requirement for a search warrant or the need to follow Cr.P.C. procedures. While the Division Bench of the High Court had held that Section 100 Cr.P.C. applies only to "closed premises," the Supreme Court disagreed. It emphasized that the definition of "premises" under Section 2(n) of the 2009 Act is exhaustive and includes warehouses or godowns, regardless of whether they are "open" or "closed" at the time of the visit. Access to such commercial premises is typically restricted to authorized personnel, distinguishing them from truly public spaces. Therefore, any officer intending to conduct a search or inspection and effect a seizure must follow the prescribed procedure, including obtaining a warrant or recording reasons for a warrantless search, even if the premises are seemingly "open" during business hours.
7. What is the Supreme Court's stance on procedural violations in search and seizure operations, particularly in relation to "due process" and "natural justice"?
The Supreme Court strongly asserted that procedural safeguards in search and seizure operations, including those mandated by both special enactments like the Legal Metrology Act and the Cr.P.C., are not mere formalities but are essential for "due process of law" and "principles of natural justice." Failure to strictly adhere to these prescribed procedures renders the action illegal and unsustainable. The Court highlighted that such violations can lead to manifest arbitrariness and abuse of power by authorities. Drawing from previous judgments, it reiterated that the means to achieve justice must be "above board," and a conviction resulting from an unfair trial or evidence collected in breach of safeguards undermines the administration of justice. In this case, the simultaneous issuance of seizure and compounding notices without an opportunity for a hearing was deemed a violation of natural justice.
8. What was the ultimate outcome of the Supreme Court's decision in ITC Limited v. State of Karnataka?
The Supreme Court allowed ITC Limited's appeal, setting aside the judgment of the Division Bench of the High Court and restoring the order of the Single Judge. This means that the search and seizure conducted by Respondent No. 2 were declared illegal and unsustainable. Consequently, the seizure and compounding notices issued to ITC Limited were quashed, and the seized goods were directed to be released. The Court found that the authorities failed to obtain a warrant, record "reasons to believe" for the search, inspection, or seizure, and disregarded mandatory safeguards under Section 15 of the 2009 Act and Sections 100(4) and 165 Cr.P.C. The alleged violation regarding packaging declarations was also deemed, at best, technical and not sufficient to justify the illegal proceedings.
