Supreme Court Quashes Seizure of ITC’s Classmate Notebooks, Says Search Without Warrant Violates Law

Delivering a significant ruling in favour of ITC Ltd, the Supreme Court quashed seizure and compounding notices issued by Karnataka authorities in a case involving alleged violations of the Legal Metrology Act, 2009. The Court underscored that statutory safeguards cannot be bypassed, and any search or seizure conducted without a warrant and without recording 'reasons to believe' is unlawful.

A bench of justice JB Pardiwala and justice R Mahadevan allowed ITC’s appeals against the Karnataka High Court’s division bench judgment, which had earlier upheld the seizure of 7,600 packages of ‘Classmate’ exercise books from the company’s warehouse near Bengaluru. The seizure was carried out in July 2020 for alleged non-compliance with Rule 24(a) of the Legal Metrology (Packaged Commodities) Rules, 2011, and Section 36(1) of the 2009 Act.

Justice Mahadevan, writing for the bench, stressed that Section 15 of the 2009 Act expressly requires officers to record reasons to believe before entering premises, inspecting, or seizing goods. Moreover, sub-section (4) of Section 15 makes it mandatory to comply with provisions of the Code of Criminal Procedure (CrPC) relating to searches and seizures. The Court held that failure to meet these requirements vitiates the entire exercise.

The bench rejected the Karnataka authorities’ claim that a warrant was unnecessary since the warehouse was open during business hours. Referring to the definition of 'premises' under Section 2(n) of the 2009 Act, the Court ruled that warehouses and godowns, whether open or closed, are covered, and the CrPC’s procedural safeguards, including Sections 100(4), 100(5) and 165, must be followed. 

The Court also found that the only witness to the search was a driver employed by the authorities, which did not satisfy the requirement of independent witnesses under Section 100(4) CrPC.

“The safeguards embodied both in the Legal Metrology Act and the CrPC are designed to prevent arbitrary action and uphold due process,” the SC observed, making it clear that statutory compliance is not a mere formality but a condition precedent to valid search and seizure.

The Court restored the order of the Karnataka High Court’s single judge, which had quashed the notices and directed the release of seized goods, but was later overturned by a division bench. It also stressed that procedural violations by officials can invite action under Sections 42 and 43 of the 2009 Act.

The ruling provides clarity on the scope of powers under the Legal Metrology Act, reinforcing that officers cannot dispense with procedural requirements on grounds of convenience. For ITC, which had contested the notices since 2020, the decision marks the end of a prolonged legal battle and a reaffirmation of its stand that the seizure was without jurisdiction.

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