The Karnataka High Court has refused to interfere in the investigation against a company and its director after the court found out that they had compromised national security.

"I do not find any merit to interfere or interdict the investigation against the petitioners, as any interference would amount to putting a premium on the acts of the petitioners for having compromised the security of the nation...," Justice M Nagaprasanna has said.

In his judgement on October 17, he dismissed the criminal petition filed by IB Track Solutions Pvt Ltd and its director Sudhendra Dhakanikote. The company is based here, and the petition sought to quash the case pending before the I- ACMM court based on a complaint by the directorate of revenue intelligence.

The company is engaged in procuring and supplying of e-seals with radio frequency identification (RIFD) technology which are placed on containers exported from India. The seals are manufactured by Leghorn Group SRL, Italy, and the Indian company is the authorised distributor. The e-seals are attached to containers used for exports and can be accurately read by a handheld device operated by a Customs officer at the port gates concerned.

The company participated in the scheme of the Union government for implementing e-seals of cargo by exporters. The Neptune e-seal distributed by the company was said to be unbreakable without physically breaking the stem of the seal. It was alleged that on certain occasions the seals though not tampered appeared to be tampered and corrective measures were immediately taken.

The directorate-general of analytics and risk management, Central Board of Indirect Taxes and Customs issued a letter to the company not to sell the e-seals manufactured by the Italian company in October 2018. Subsequently, the contract with the Indian company was terminated and a case filed under the Information Technology Act and Indian Penal Code against the Indian company and its director.

The allegation was that the company had tampered the e-seals regularly and they were being scanned at a distance of few metres without being in locked condition and e-mails of the company indicated that they had switched off the tampering alerts that led the containers with tampered seals also to get exported.

The High Court quoted from the investigating officer's enquiry of Sudhendra Dhakanikote and said his statements shock the consciousness of the court.

Dismissing the petition, the court said, "What passes through the container if not detected can definitely pose a serious threat to any of these to the nation. The answers given by the 2nd petitioner would shock the conscience of the court, at what he says that they did it in their business interest. Such business houses generating vested interest of business cannot be permitted to sacrifice the interest of the nation, as the security of the nation and its interest, economic or otherwise, is paramount in comparison to any vested interest of any business house in the nation. Any fact of security of the nation should not be permitted to be compromised come what may."

In June this year, the court quashed the case against David Mathai who it found was not a director of the company as alleged and he had no role to play in the affairs of the company.