Bombay High Court
Xyz vs Union Of India, Through Secretary, ... on 27 April, 2015
Author: A.S. Gadkari
Bench: B.R. Gavai, A.S. Gadkari
PNP 1/14 WP1882-28.4
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.1882 OF 2014
XYZ
having his address at
C/o. Prem Kumar Sharma,
165, Perin Nariman Street,
Room No.2, 1st Floor, Fort
Mumbai - 400 001. ..Petitioner.
versus
1. Union of India
(Through the Secretary,
Ministry of Law and Justice,
Department of Legal Affairs,
Branch Secretariat, Aaykar Bhavan,
Annexe, 2nd floor, New Marine Lines,
Mumbai - 400 020.
2. The Chief Commissioner of Customs,
Jawaharlal Nehru Customs House,
Nhava Sheva, Raigad - 400 707.
3. The Directorate General
Directorate of Revenue Intelligence
'D' Block, I. P. Bhawan,
I.P. Estate, New Delhi - 110 002.
4. Addl. Director General (Vigilance)
New Custom House, Ballard Estate,
Mumbai - 400 038.
5. The Commissioner of Customs (I)
Jawaharlal Nehru Custom House,
Nhava Sheva, Raigad - 400 707.
6. Rakesh Kumar Gaur
Supdt., CIU, JNCH (then)
Jawaharlal Nehru Custom House,
Nhava Sheva, Raigad - 400 707.
7. Narayan Singh,
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PNP 2/14 WP1882-28.4
Supdt., CIU, JNCH (then)
Jawaharlal Nehru Custom House,
Nhava Sheva, Raigad - 400 707. ..Respondents.
.....
Mr. Brijesh Pathak for the Petitioner.
Mr. S.P. Bharti, for Respondent Nos.1 to 5.
.....
CORAM : B.R. GAVAI &
A.S. GADKARI, JJ.
27th April, 2015.
JUDGMENT (PER A.S. GADKARI, J.) :
The Petitioner, an informer of the Customs Department has filed the present Petition for a writ of Mandamus or any other appropriate writ, order or direction thereby directing the Respondents and their sub-ordinate officers to forthwith release the balance amount of reward due and payable to the Petitioner and for declaration that the actions on the part of the Respondents by not disbursing / paying the balance amount of reward to the Petitioner by gross abuse of the powers conferred upon them as, illegal, without justification, null and void and for other consequential reliefs.
2. The Petitioner is an informant of the Customs Department and provides the information to the Respondents which has enabled the Respondent Department to collect huge amount of revenue in the treasury of the Government. It is contended by the Petitioner that when a person acts as an informer, he risks his security and safety, which ultimately enables the Respondent Department to garner ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 3/14 WP1882-28.4 revenue because of the disclosure of the illegal activities which are being committed by the importers. It is the case of the Petitioner that the Respondents are duty bound to act on the scheme / policy framed for rewarding such an informer. That the Petitioner gave information to the Respondent No.5 i.e. the Commissioner of Customs (I), Jawaharlal Nehru Custom House, Nhava Sheva, Raigad in July 2010 about specific goods which were imported by Bill of Lading No.859498700 and IGM No.24234/407. Based on the information provided by the Petitioner the Customs officials conducted raids and seized the goods.
3. It is further the case of the Petitioner that the investigation into the said case culminated into issuance of a show cause notice by the Respondent No.5 to the said importers and after adjudication of the proceedings, by an order dated 31st March, 2011 the said goods were confiscated and penalty was imposed on the importers. The Respondents subsequently paid an advance reward amount of Rs.5 lacs to the Petitioner after the seizure of the said goods as per the reward policy framed by the Ministry of Finance, Department of Revenue, Government of India dated 16 th April, 2004 bearing F.No.R-
13011/6/2001-Cus (AS). It is the contention of the Petitioner that as per the said policy, the balance amount which is due and payable has not been paid by the Respondents to him. The Petitioner further ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 4/14 WP1882-28.4 submitted that despite repeated reminders and representations, the Respondents have failed to make the payment of the balance reward amount and therefore, the Petitioner was left with no other alternative than to approach this Court by filing the present Petition.
4. After receipt of notice of the present Petition, Mr. Shyam Kanu Mahanta, Deputy Commissioner of Customs (CIU), Jawaharlal Nehru Customs House, Taluka Uran, District Raigad has filed a detailed affidavit in response thereto. In the said affidavit, it is stated that the department received information some time in January 2010 about smuggling of consumer goods by mis-declaring the same as "Welded Mesh". That SIIB, ICD, Tuglakabad had detected case in February 2010 where consumer goods were sought to be cleared in the name of "Welded Mesh". Accordingly, an All India Alert had been issued on 17 th and 23rd February, 2010 in the name of some of the firms including M/s. Track Exports India Pvt. Ltd. It is further stated that the said alert was circulated to all sections on 4 th March, 2010 to foil such an attempt. He has further stated that the department during watch on such imports also received information from the Petitioner on 19 th July, 2010 about imports of consumer goods by concealing them in five containers. During investigation, consumer goods were found to be stuffed behind few rows of 'Welded Mesh". It is further stated that the Respondent Department investigated the matter and during ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 5/14 WP1882-28.4 investigation, it was found that due to alert, the containers which landed in February 2010 and which were initially destined to Delhi, were sought to be diverted to Colombo / Jebel Ali by changing the name of shipper / consignee but could not succeed. That during investigation, it was noticed that though the Bill of Lading pertaining to impugned goods, the consignee was M/s. Limra Traders of Nalasopara (W), Thane, yet notified party was M/s. Track Exports India Pvt. Ltd. of New Delhi in whose name the said mentioned alert was issued. It has been further stated that the department on seizure of the goods, paid Rs.5 lacs to the Petitioner as advance reward. That, as provided in the scheme, the matter was considered by the Reward Committee on 28 th June, 2012. Though the Reward Committee was not in favour of further reward, but the matter was left open because Directorate of Vigilance was conducting enquiry. Since that investigation is over, the Reward Committee will be convened for considering the final reward to the informer or otherwise. It is further stated that the contention of the Petitioner that he is entitled to balance reward of Rs.48 lacs is totally misplaced as the Petitioner cannot claim any reward as a matter of right. It is further stated that, paragraph 5 of the "Reward Scheme", clearly provides that the reward is purely ex gratia payment which may be granted on absolute discretion of the authority competent to grant reward and no party can claim the reward as a matter of right. The Reward Committee considers all aspects of ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 6/14 WP1882-28.4 reward before granting reward. It is therefore prayed that the present Petition may be dismissed.
5. Heard Mr. Brijesh Pathak, learned counsel for the Petitioner and Mr. S.P. Bharti, learned counsel appearing for Respondent Nos.1 to 5 and also perused the record.
6. The learned counsel appearing for the Petitioner contended that the Petitioner by putting his life to risk provided information to the Respondent Custom officials and after the information was found to be true and correct which led to the seizure of the five containers, the Respondent Department in fact has received an amount of Rs.2,65,26,500/- as and by way of auction of the confiscated goods.
He further contended that even the gist of information received by the Superintendent of Customs (P) and the information report dated 19 th July, 2010 also makes it abundantly clear that the Petitioner gave the information about the specific five containers which were lying in the CFS, Mearsk Line since March 2010. That the items declared as per the IGM were Welded mesh roll, but in fact the said containers were stuffed with consumable and electronic articles. He further contended that in view of the policy framed by the Government of India dated 16 th April, 2004, the Petitioner is entitled for the entire reward amount and the Respondents cannot deny the legitimate dues of the Petitioner on ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 7/14 WP1882-28.4 flimsy grounds. He further contended that the Government of India has framed the policy with a view to unearth the evasion of customs duty at the hands of unscrupulous elements in the trade and the persons like the Petitioner are therefore providing information to the Government authorities with a legitimate expectation that they will get reward as per the guidelines framed by the Government of India. He therefore urged before us that the Respondents may be directed to pay the balance amount of reward to the Petitioner in view of the specific information provided by the Petitioner.
7. The learned counsel appearing for the Respondents per contra supported the action of the Respondents by placing reliance on the affidavit filed by the Deputy Commissioner of Customs. The learned counsel for the Respondents submitted that the Petitioner cannot claim the alleged balance amount of reward as a matter of right. He further submitted that paragraph 5 of the said reward policy dated 16 th April, 2004 is very clear, which says that the reward is purely an ex-
gratia payment which, subject to guidelines, may be granted on the absolute discretion of the authority competent to grant rewards and cannot be claimed by anyone as a matter of right. In support of his contention the learned counsel for the Respondents relied on a judgment of the Supreme Court in the case of Union of India v. C. Krishna Reddy reported in 2004 (163) E.L.T. 4 (S.C.) and he placed ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 8/14 WP1882-28.4 reliance on paragraph 12 of the said judgment.
It is to be noted here that the Supreme Court in the said case was dealing with the scheme or the policy of the Government of India dated 30th March, 1985, on the premise of the facts that after the information was provided by the respondents therein, except for a single amount of Rs. 2 lacs towards redemption fine no other amount either by way of custom duty, penalty or redemption fine has been realized by the Department. The imported machinery could not be confiscated or auctioned as the same had been hypothecated to financial institutions from whom the importers had taken loan. In view of the amended policy, the entitlement of the respondent, if any, could be a small amount as the Department had been able to realize only Rs.2 lacs. That was not a case where some large scale smuggling operations had been brought to light or the identity of some hard core smugglers had been revealed as a result of the information given by the respondent therein. Despite the fact the learned Single Judge of the High Court issued a writ, that apart from Rs.10 lacs which had already been paid, a further amount of Rs.25 lacs should be paid to the respondent within four weeks and the appellant therein was further directed to determine the respondent's entitlement of balance amount of the reward and pay the same within three months. In an appeal carried out by the Department, the Division Bench only partly ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 9/14 WP1882-28.4 modified the order and issued directions for payment of Rs.5 lacs within three weeks on the receipt of the copy of the order and a further sum of Rs.5 lacs within three weeks thereafter.
It is to be noted here that on the premise of the said facts the Supreme Court held that the High Court was not right in ordering or granting such a reward to the respondent therein. In our considered opinion, the reliance placed by the learned counsel on the said judgment is of no avail to the Respondents.
8. In the present case, the Petitioner on 19 th July, 2010 had provided a specific information pertaining to five containers which were lying in the port and based on the said information seizure was effected by the Respondent authorities. The show cause notice dated 3rd December, 2010 also in unequivocal terms mentions that "Specific information was received by the officers of Central Intelligence Unit"
about a party by name M/s. Limra Traders with respect to the five containers, numbers of which are undoubtedly tallying with the numbers provided by the informer/ Petitioner in firstly, the gist of the information given to Mr. Rakesh Kumar Gaur, Superintendent of Customs (CIU) and subsequently in the information report dated 19 th July, 2010. The show cause notice also makes specific reference that on investigation it is found that the said containers have been imported on Bill of Lading No.859498700 showing the goods as ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 10/14 WP1882-28.4 'Welded Mesh" and under its garb consumer items were imported thereby causing substantial and huge loss of revenue to the Government of India. On this background, we fail to appreciate the stand taken by the Deputy Commissioner of Customs in his affidavit that they were already in receipt of information some time in January 2010 and they were acting upon the said information and therefore the Petitioner is not entitled for the balance of the reward amount. We are at pains to note that though a specific stand was taken in the affidavit that since January 2010 the Respondent Department was in receipt of the specific information, it is not disclosed that what prevented them from acting on the said information swiftly. In our considered opinion, the officers who were in receipt of the said information but failed to act upon it, is a matter of serious concern and also a matter of investigation for the higher authorities. The affidavit of the Deputy Commissioner of Customs in unequivocal terms admits that the Petitioner provided information on 19 th July, 2010 about imports of consumer goods by concealing them in five containers and based upon the same, action was taken against the said containers. It is worth to note here that from January 2010 to July 2010 the officers of the Respondent authorities did not act upon so called or alleged information which was already with them. However, after the receipt of information on 19th July, 2010 from the Petitioner, they conducted the raids in the matter.::: Downloaded on - 07/05/2015 21:05:31 :::
PNP 11/14 WP1882-28.4 We are of the opinion that, the Customs officers at this stage cannot be allowed to take a spacious plea that they were already in receipt of the information since January 2010 and therefore, the Petitioner is not entitled for further reward amount. It is to be noted here that on the basis of the specific information provided by the Petitioner, the Respondent authorities were able to recover an amount of Rs.2,65,26,500/- by auctioning the confiscated goods.
9. According to us and in our considered opinion, the stand taken by the Respondent authorities appears to be clearly an afterthought, taken only with a view to deprive the informer / Petitioner from his legitimate dues / payments towards his reward as per the reward policy. We may also note here that the affidavit dated 15 th March, 2014 filed by the Deputy Commissioner of Customs is as vague as possible and it appears to us that the said authority is either suppressing certain vital information from this Court and / or has filed the said affidavit without perusing the entire original record available with its office. As far as the contention raised by the Deputy Commissioner of Customs in his affidavit at paragraph No.7 that the reward is purely ex-gratia payment which may be granted on absolute discretion of the authority competent to grant reward and no party can claim the reward as a matter of right, we are of the considered opinion that though, paragraph 5 of the said policy dated 16 th April, 2004 ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 12/14 WP1882-28.4 mentions that the reward is purely an ex-gratia payment and cannot be claimed by anyone as a matter of right, the ex-gratia payment has to be paid in consonance with the guidelines and the scheme dated 16th April, 2004 framed by the Government of India and the informer cannot be left to the whims and caprices and /or mercy of the Respondents and/or the members of the Reward Committee. It is to be noted here that the Government of India has framed the reward policy with a view to follow the same by all the concerned in its proper spirit and we are of the opinion that, the Respondents cannot be allowed to frustrate the same by giving the informer only an assurance of reward as mentioned in the schedule. It is further to be noted that the guidelines prescribed under the reward policy dated 16 th April, 2004 are framed by Government of India to follow the same by the officers of the Respondents and not to violate it at the whims and fancies of the Respondents as stated above. It may also to be noted here that if the payment of reward is not made to the informers within a stipulated period and as per the guidelines prescribed by the reward policy dated 16th April, 2004, the informers will not come forward with information.
10. The Division Bench of this Court to which one of us (Shri B.R. Gavai, J.) was a member, while dealing with a similar situation in PIL No.99 of 2014 (Lalan Kishor Singh v. State of Maharashtra and ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 13/14 WP1882-28.4 another), in its judgment dated 9th March, 2015 at paragraph No.5 has observed thus :
"Only after the petitioner gave an information to the authorities of the Sales Tax Department and only after the Sales Tax Authorities carried out the raid, the said Company has filed the returns. Had the petitioner not given the information and had the raid not been carried out by the Sales Tax Department, evasion of the taxes by the said Company would have gone unnoticed and the tax payable by the said Company would have been lost. We find that the stand taken by the respondent-Department is against its own interest. Promising someone to bring forth the tax evasion with an allurement that he would get certain reward and thereafter retracting on a hyper-technical ground and trying to play with the words would dissuade the citizen from bringing to the notice of the Sales Tax Department the evasion of the taxes by the assessee."
11. It is manifest that the informers provide information with a legitimate expectation of reward to be received in time. Non-payment of the reward amount within a stipulated time will have frustrating effect on the reward policy framed by the Government of India which may perhaps result in not getting the information of the unscrupulous and anti-social elements and thereby would cause loss to the government exchequer. We are of the considered opinion that the guidelines enunciated in the reward policy dated 16 th April, 2004 are to be adhered to, by all the concerned and the discretion as mentioned in ::: Downloaded on - 07/05/2015 21:05:31 ::: PNP 14/14 WP1882-28.4 paragraph 5 of the said policy, given to the Reward Committee, cannot be treated as an unfettered power with the authority competent to grant rewards, which may lead to frustrate the basic intention of the Government behind framing the policy.
12. In the result, the Petition succeeds and is allowed accordingly.
13. The Respondents are directed to pay the Petitioner's reward as applicable under the Policy of Reward for Informers & Officers as stipulated in the said Policy dated 16th April, 2004. The payment in accordance with the said Policy, after adjusting the amount already paid to the Petitioner, shall be made within a period of three months from today.
(A.S. Gadkari, J.) (B.R. Gavai, J.)
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