Reason to believe is essential for search warrants; unlawful seizure cannot justify retaining seized documents for investigation.

Search powers under section 37 of the Foreign Exchange Regulation Act, 1973 were subject to an officer's honest and reasonable "reason to believe" based on relevant material, and the court could examine whether such material existed and had a nexus with the belief. Where the recorded reasons were not produced and the materials disclosed no lawful basis, the search was treated as a fishing enquiry and therefore unlawful. Documents seized in an unlawful search could not be retained merely because they might assist investigation; unlawful seizure could not confer an advantage on the State, and the seized documents were liable to be returned.

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Issues: Whether the search warrant issued under section 37 of the Foreign Exchange Regulation Act, 1973, was supported by the requisite "reason to believe" and whether documents seized in the course of an unlawful search could be retained by the respondents.

Analysis: Section 37 authorises search and seizure only when the empowered officer has reason to believe, on some material, that relevant documents are secreted in the place to be searched. The belief must be that of the authorised officer, formed honestly and reasonably on relevant material, and the court may examine whether such material existed and had nexus with the belief. Here, the recorded reasons were not produced, the materials placed before the court did not disclose any basis for the belief, and the search appeared to have been undertaken as a fishing enquiry rather than on lawful grounds. The statutory safeguard of reason to believe was treated as the only effective protection against arbitrary intrusion. Once the search was found unlawful, the respondents could not justify retention of the seized documents merely on the ground that they might be useful in investigation; unlawful seizure could not be allowed to yield advantage to the State.

Conclusion: The search warrant was unlawful for want of the requisite reason to believe, and the seized documents were liable to be returned to the petitioner.

Ratio Decidendi: Where a statute confers search power subject to the officer's reason to believe, the existence of that belief must be supported by relevant material at the time of authorisation, and documents seized pursuant to an unlawful search cannot be retained by the State merely because they may be useful for investigation.

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