TMI Blog2012 (5) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant: In person For Respondents: Mr Vikas Garg, Sr. Standing Counsel Mr Vikas Gautam, Jr. Standing Counsel for respondent Nos. 1 and 2. Ms Sweety Manchanda, Advocate for respondent JUDGEMENT Per: Sanjiv Khanna: Amrit Lal Mehta in 1987 provided information imputing evasion of customs duty on import of machinery by J.K. Synthetics Limited. 2. The petitioner by this writ petition impugns the quantum of award released to him, inter alia, contending that he was earlier sanctioned reward @ 20% of the customs duty vide certificates dated 26th March, 1998, 24th May, 2004 and 27th June, 2006 on the principal amount of tax, i.e., customs duty of Rs.1.21 crores but the same has been reduced on the penalty and fine amount of Rs.2.5 crores to 15% on Rs.30 lacs vide certificate dated 14th February, 2008, to 8.33% on next Rs.60 lacs vide certificate dated 5th May, 2009 and to 8.28% on the balance Rs.1.60 crores vide certificate dated 11th May, 2010. It is prayed that the respondents should be directed to pay the reward @ 20% on the entire duty including penalty and fine. 3. The respondents herein Director General of Revenue Intelligence and Investigation, Chairman, Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the cases of Union of India Ors. vs. C. Krishna Reddy reported in 2003 (10) SCALE 1050 as well as in Union of India vs. R. Padmanabhan reported in (2003) 7 SCC 270 and in the Reward Scheme that there is no vested right in the person to claim a reward and that the payment can, at the highest, be an ex-gratia payment. There is absolutely no justification to grant interest on such ex-gratia payment. We, therefore, set aside the portion of the High Court order where the interest is directed to be paid as well as the portion awarding costs. Save as above, we see no reason to interfere. The Civil Appeal stands dismissed. 8. In this order dated 26th April, 2005 passed by the Supreme Court, it was also noticed that a contempt petition had been filed by the petitioner herein before the High Court for the non-compliance of the order dated 20th April, 2004 and against quantification of Rs.9.5 lacs (Rs.6 lacs+Rs.3.5 lacs) as the reward payable. It was clarified that the dismissal of the appeal before the Supreme Court would not affect the contentions of the parties in this contempt petition. 9. The aforesaid contempt petition being Contempt Case(C) No. 613/2004 was dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eward put together, will not exceed the ceiling of 20% of the net sale proceeds (if any) plus amount of additional duty/fine/penalty recovered or the amount of drawback fraudulently claimed recovered, as the case may be. This will be subject to instructions in para 4.3 above as regard rewards to Govt. Servants is concerned. The advance/interim reward sanctioned and disbursed, if any, shall be adjusted from the final reward to be paid to the officers/informers. 10. It was thereafter observed that use of the term upto 20% for the quantum and as a ceiling of reward, clearly means that the reward cannot exceed 20% of the duty/penalty evaded. This is the outer limit. It was further observed that paragraph 5 forbids grant of reward as a matter of routine. Thereafter, the Division Bench referred to R. Padmanabhan's case (supra) wherein it was observed that reward under the scheme was purely an ex gratia payment but the same could not be denied or refused arbitrarily. Being an ex gratia payment, no right accrues to any one, till it is determined and awarded. The following paragraph from R. Padmanabhan's case (Supra) was quoted:- 8. ..The rewards are also to be and can be up to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m regarding grant of reward. These are matters exclusively within the domain of the authorities of the Department as they alone can weigh and examine the usefulness or otherwise of the information given by the informer. In the writ petition filed by the respondent, no details had been given on the relevant issues. If the grant of reward cannot be claimed as a matter of right, it is not understandable as to how a writ of mandamus can be issued commanding the Government to give a particular amount by way of reward. Though this specific plea was taken in paras 18 and 21 of the counter-affidavit, yet neither the learned Single Judge nor the Division Bench adverted to this aspect of the matter. 13. It is well settled by a catena of decisions of this Court that a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of the writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limit of their jurisdiction. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anction any further amounts in favour of the petitioner with further recoveries being made by them, nor is it clear whether the amount of Rs.9.5 lacs already sanctioned represents the total amount regardless of the percentage it makes vis- -vis the realisations. That is an aspect which ought to have been addressed by the reward Committee to put an end to the confusion and avoid multiplicity of legal proceedings in the Court. If the reward Committee intends granting a reward on the basis of a percentage of the realisations made, it can say so in which event the petitioner may have to wait for realisations and seek redress as and when the amount due on that basis is withheld by the respondents. In case, however, the Committee determines in its wisdom a lump sum amount in full and final settlement of the claim for reward, it can do even that to give quietus to the controversy. In either case a decision that is clear as to the total quantum of the reward whether lump sump or by reference to percentage of realisations shall have to be taken. That decision is for the present not discernible from the record placed before us but the omission to take a decision does not appear to be either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the contention of the petitioner that he is entitled to reward @ 20% and this is the mandate of the scheme. The petitioner has referred to decision in R. Padmanabhan's case (supra) and paragraph 8 thereof which has been quoted above. The petitioner is misreading the observations made therein. The said observations were quoted by the Division Bench in the order dated 8th December, 2005 and have been rightly understood and interpreted. The use of the word upto 20% does not mean that as a rule 20% of the tax dues should be paid as a reward. This is an outer/upper limit and the reward can be for a lower amount. In R. Padmanabhan's case (supra), the Supreme Court observed that different criteria can be applied for payment of reward to Government servants and citizens. In the latter case, the Government should be liberal and the criteria and parameter for rewards to informants and government servants can be different. 15. The Revenue has placed before us copy of the Minutes of the six Reward Committees and we have examined the same. The Reward Committee in its meeting held on 12th August, 1997 had sanctioned advance reward of Rs.6 lacs. It was noticed that under the policy, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case in terms of the reward policy on the basis of the realization of Rs.1.21 crores is Rs.24.27 lakhs. 5. The Committee after considering the facts of the case, the specificity of the information and the role played by the informer in this case sanctions a final reward of Rupees Fourteen lakhs only (Rs.14 lakhs) to the informer. 19. One distinguishing and important factor may be noted. The aforesaid rewards sanctioned were in respect of tax demand, i.e., customs duty, which was evaded. It was not in respect of fine and penalty. 20. The first and the third Reward Committees' minutes dated 12th August, 1997 and 19th May, 2006, do not quantify the reward in the percentage terms. The second Reward Committee's minutes had recorded that the petitioner did not deserve reward at the maximum rate of 20% as the information given was very generic. The second Reward Committee held on 11th May, 2004, took into consideration the recovery made and other factors and had accordingly sanctioned Rs.6,00,000/-. However, observations of the said Reward Committee have to be read with the directions/observations made by the High Court in W.P. (C) No. 7586/2003, which were modified by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered out of penalty and fine payable. It was decided that reward @ 15% shall be paid on the penalty amount which would be realised in future. 23. The next meeting of the Committee was held on 26th March, 2009. Mr. A.C. Buck, Chief Commissioner of Customs was a Member of this Committee as well as the Committee which had sanctioned the reward in its meeting held on 6th November, 2007. In this meeting, it was observed and held as under:- 6. After taking into consideration the foregoing facts, role played by the informer in giving the information of a very generic nature and the fact that a further amount of Rs.60 lakhs has been recovered since the Reward Committee met last, as has been intimated vide Additional Commissioner (AE), Jaipur-I's letter C.No.IV(6)49/AE/JPR-1/02/Pt./1113 dated 28.05.2008 the Committee sanctions an amount of part final reward of Rs.5 (five) lakhs to the informer. The Committee further decides not to bind the future Committees by laying down the percentage of the amount to be realised in future in determining the amount of reward to be paid in future in the event of further future recovery. (emphasis supplied) 24. Reading of the aforesaid m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee dated 6th November, 2007 in which it was decided that the petitioner would be paid reward @ 15% on all future realisation of the penalty amount. There is, therefore, merit in the contention of the petitioner that there is element of arbitrariness, inconsistency and disagreement in the three minutes. In the last two minutes as a result of variance with the finding recorded in the minutes dated 6th November, 2007 and the earlier meeting on the 11th May, 2004 the rewarded amount had come down to 8.33% and 8.28%. Reward is to be awarded by the Reward Committee keeping in mind several aspects including specificity and accuracy of information, risk and trouble taken, extent and nature of help rendered by the informer, etc. The information furnished was the same, but there is substantial variance in the amount rewarded. On the basis of the same information, reward on the penalty and fine amount has varied between 15% to 8.28%. Same very information was held to be good to make re-award @ 15% but subsequently held to be generic and not specific and, therefore, the reward was reduced to 8.33% and then 8.28%. The difference in monetary terms in view of the quantum is substantial. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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