Judgment :- 1. Petitioner gave information to the Customs Department about the possibility of an attempt to smuggle gold at Chettuvai on 10-1-1969 by a vessel Saraswathy. The Department made enquiries through one V. K. S. Menon, Preventive Officer, and after discussion with the petitioner, requisitioned the assistance of the Navy at Cochin for the purpose of patrolling the area near Chettuvai on the appointed date with a view to effect seizure of the vessel. In the process, a craft by name Anwar was searched and it was found carrying 40,000 tholes of contraband gold and 4998 wrist watches. The articles were seized. 2. On 27-1-1969 a reward of Rs. 25,000/- was provisionally awarded to the petitioner in relation to this seizure. As per the rules governing award to informers, embodied in the standing orders, there was a discretion vested in the Collector to grant rewards to informers upto Rs. 15/-per thola of gold and upto 10 percent of the estimated market value in India of the confiscated goods at the time of seizure. The petitioner could therefore, be awarded an amount upto Rs. 6 lakhs for the gold seized. The value of the contraband goods seized was claimed to be over Rs. one crore. The petitioner was however, awarded only Rs. 25,000/- as stated above, without any action being taken to award further amounts. Petitioner made frequent appeals to the respondents to make payment of a higher amount by way of reward, and in the absence of any compliance, a lawyer notice was sent. There was a reply stating that there was no statutory right for reward and that the amount of Rs. 25000/- already paid was adequate. The petitioner challenged the rejection of his claim by filing writ petition O. P. No. 9014/82 in this court. The claim was countered by the respondents with the plea that there was a discrepancy in the information furnished by the petitioner, in that the vessel involved was not "Saraswathy" as informed by him, but "Anwar". Para.5 of the counter affidavit filed in O.P. No. 9014/82 stated as follows: "He would have been eligible for the full reward but for the fact that the name of the craft, furnished by him was 'Saraswathy'. Instead, the craft that brought the contraband goods was 'Anwar'. Para.5 of the counter affidavit filed in O.P. No. 9014/82 stated as follows: "He would have been eligible for the full reward but for the fact that the name of the craft, furnished by him was 'Saraswathy'. Instead, the craft that brought the contraband goods was 'Anwar'. In the circumstances it was decided that no further reward be paid to the petitioner." M. P. Menon, J. who disposed of the original petition held this approach of the authorities to be hypertechnical, arbitrary and unreal. The learned judge found himself unable to uphold the stand of the department, that simply because the name of the vessel was different, full reward could not be granted. . The original petition was allowed and the respondents were directed to reconsider the matter and pass fresh orders in the light of the observations contained in the judgment which ran as follows: "In my "opinion, the approach of the authorities is hypertechnical, arbitrary and unreal. Reward is paid for valuable information given in connection with smuggling. If all other expectations are proved to be correct, an error with regard to the name of the vessel would be immaterial. The information given by the petitioner was correct in all other material particulars. And going by that information, the officers of the Department were able to check smuggling and seize large quantities of valuable items. So long as it was not the petitioner himself who was the smuggler, it would have been impossible for him to give an exact estimate of every minor detail regarding the smuggling operation planned by some one else. What the rule or order requires, and to which requirement grant of reward is geared, is that the information given should be genuine, substantial and action on its basis should substantially succeed. These conditions were satisfied in the present case and I am unable to uphold the stand of the Department that simply because name of vessel was different, full reward could not be granted. Astrological or even materiological forecasts may fail; but the petitioner's forecast, or the information given by him, was accurate by reasonable standards. I must add that according to the 3rd respondent who was the main representative of the Department in contacting the petitioner and making the seizure, the ship which had actually arrived at Chettuvai with the contraband goods bad no name at all." 3. I must add that according to the 3rd respondent who was the main representative of the Department in contacting the petitioner and making the seizure, the ship which had actually arrived at Chettuvai with the contraband goods bad no name at all." 3. Respondents took up the matter in appeal, namely Writ Appeal No. 355 of 1984, which was disposed of by the learned Chief Justice sitting with Sukumaran, J. The Division Bench agreed with M.P. Menon, J. in holding that the information furnished by the petitioner was substantial and that it was that information that led to the seizure of the contraband goods in question. The Division Bench observed as follows: "It is not possible to agree with the learned counsel for the appellants that the discrepancy in regard to the name of the vessel is of such a character as to disentitle the first respondent from receiving the reward in accordance with standing O.48/70, AH other information furnished by the first respondent has been found to be accurate and it was on account of the information furnished by the first respondent that the authorities requisitioned the Indian Navy Vessel and were ultimately successful in seizing the vessel and the contraband goods in question. The date on which the vessel arrived, the place where the vessel arrived as also the nature of the contraband goods that were being smuggled are consistent with the information which the first respondent has furnished. The learned Single Judge was therefore, justified in drawing the inference that the information furnished by the first respondent was substantial and it is that information which was furnished by him that led to the seizure of the contraband goods in question. The learned Single Judge was therefore, justified in taking the view that the case of the first respondent for reward in accordance with standing order No. 48/70 dated 28th July. 1970 das to be considered. It is for that reason that the matter has been remitted to the authorities. We see no good reason to disagree with this direction of the learned Single Judge." There is no case that any appeal has been filed in the Supreme Court against these judgments. They have become final, and with them, the finding that it was the information that was furnished by the petitioner that led to the seizure of the contraband goods. 4. They have become final, and with them, the finding that it was the information that was furnished by the petitioner that led to the seizure of the contraband goods. 4. The Division Bench had noted inter alia that the standing order prescribed only the maximum amount of the reward that could be granted to the informer. The authorities had a discretion to grant a reasonable reward to the petitioner, bearing in mind the valuable information that I had been furnished by him. 5. After the matter thus went back, the petitioner was awarded a further sum of Rs. 2,500/- making a total reward of Rs. 27,500/-. Petitioner challenges this award as unreasonable. It is pointed out that based on the guidelines in the standing order, of a maximum award at the rate of Rs. 15/-per thola of gold seized and 10 per cent of the value of the other goods, be is entitled to a reward of over Rs. 10 lakhs, the value of the contraband goods seized being, (according to him), over Rs. one crore. The respondents should have bad regard to this circumstance in making a proper and reasonable reward to the petitioner. The proceedings Ext. P5 by which the additional amount of Rs. 2,500/- was sanctioned merely states that the Collector of Customs bad considered the petitioner's claim and sanctioned an additional amount of Rs. 2,500/-. Ext. P5 does not disclose as to what were the circumstances which weighed with the Collector in limiting the additional amount to Rs. 2,500/- and the total reward to Rs. 27,500/-. The grant of such a pittance, which had no corelation to the maximum amount awardable was making a mockery of the award itself. 6. The counter affidavit filed by the Collector of Customs sets forth the reasons for his award as follows: "The quantum of reward has to be related to the nature of information, and factors such as accuracy, utility, difficulty in obtaining information from other sources, have to be taken into account. Special consideration has to be given to the informer's antecedents and the risk to which he is exposed. Further, the maximum reward rate cannot be given as a matter of routine, but on merits of each case. Special consideration has to be given to the informer's antecedents and the risk to which he is exposed. Further, the maximum reward rate cannot be given as a matter of routine, but on merits of each case. The amount of reward would also depend upon the nature of information, whether specific or otherwise and whether the information gives clues to persons involved in smuggling or their associates. Shri. Govindan Pillai was never known to the department earlier nor did he supply any information subsequently. As briefly discussed, he did not risk himself in obtaining the information nor did he help the department in any post-seizure operations Shri. Govinda Pillai knew and spoke of only Velayudhan and his craft 'Fate Muberak' renamed 'Saraswathy' and of none else. But the seizure was effected from 'Anwar' which had nothing to do with Velayudhan Shri. Velayudhan was reportedly under detention in Muscat jail at this relevant time. The informant had not taken any risk in collecting even the information about Velayudhan but by exposing himself to public by entering into correspondence as an informant be bad shown that his claim is bogus. Under the circumstances maximum reward amount cannot be given as a matter of routine to a person who poses himself as an informer. True informers, by and large, adopt high standards of ethics and more often live in fear of dire consequences. In spite of this Shri. Govinda Pillai was paid Rs. 25,000/- as advance reward just because it was for the first time that such a huge seizure was effected on the Kerala coast:" 7. Inter alia it is pointed out in the counter affidavit that there was difference in the name of the vessel from which the seizure was effected. It will look as if the respondents still stick to the stand that it was by accident rather than by the information furnished by the petitioner that the seizure took place. Such a plea cannot be countenanced in the light of the finding rendered by M. P. Menon, J. and affirmed in writ appeal by the Division Bench, that it was the information furnished by the petitioner that led to the seizure of the contraband. On these facts, the question is whether there has been a proper exercise of the discretion by the Collector in limiting the award to an amount of Rs. On these facts, the question is whether there has been a proper exercise of the discretion by the Collector in limiting the award to an amount of Rs. 27,500/-as against the maximum amount of about Rs. 10 lakhs that could be awarded. It has been noted in the earlier appellate judgment that the reasonable amount of reward payable to the petitioner is is the discretion of the authorities, bearing in mind the valuable information furnished by him and the substantial recovery of contraband goods made. 8. The standing order prescribes the maximum reward that could be granted. As to what amount should be awarded within that limit, is a matter of discretion for the authorities, to decide having regard to the relevant facts and circumstances. The respondents are bound to apply their mind fairly and objectively to the facts and reasonably appraise the same so as to arrive at a just decision in regard to the amount of the reward. The discretion which is vested in the Collector should be exercised reasonably and not arbitrarily. It should be a real exercise of the discretion, and not a sham and pretence. It must be exercised in good faith, to promote the object which the standing order was intended to achieve. Exercise of any discretion, which is not made on a proper application of the mind to relevant facts and circumstances has to be treated as no exercise of the discretion at all. The fact that the authority acted in good faith will not alter the position. The fact that the seizure of such a large haul of contraband goods was made on information furnished by the petitioner should certainly be a very important relevant factor in deciding this question. When the maximum amount liable to be granted as reward is about Rs. ten lakhs and when it has been found by this court that it was the information furnished by the petitioner that led to the seizure, it requires very convincing material to reduce the amount of the award to a comparative pittance of Rs. 27,500/-. It cannot be gainsaid that various factors, as stated in the counter affidavit, do go into the reckoning of the quantum of the reward, but the source of information which originated the proceedings, set them in motion, and which led to the seizure, cannot be brushed aside as of practically no importance in the seizure. 27,500/-. It cannot be gainsaid that various factors, as stated in the counter affidavit, do go into the reckoning of the quantum of the reward, but the source of information which originated the proceedings, set them in motion, and which led to the seizure, cannot be brushed aside as of practically no importance in the seizure. It is worthy of note that but for information furnished by the petitioner, the seizure of such a huge quantity of contraband goods would not have been effected at all. The department has no case that they had other sources of information which had led to this seizure. It was the petitioner's tip-off that led to arrangements with the Navy and for the search of 'Anwar' on the shores of Chettuvai. 9. The other reasons stated in the counter affidavit namely that the petitioner has not exposed himself to any risk in obtaining information and furnishing it, or that he has not famished any other information in the past or in the future, may be relevant, but not such as to reduce the quantum to such a comparatively ridiculously low amount of Rs. 27,500/- as that awarded. (It is noteworthy at this stage that according to the respondents even the initial award of Rs. 25,000/- was an ex-gratia payment and not a reward at all). I am inclined to hold that in granting such a small amount, the Collector has not at all exercised the discretion vested in him in accordance with law, or in the manner in which such discretion should be exercised having regard to the object sought to be achieved and the facts and circumstances of the case. Such an exercise of discretion is virtually a mere sham or pretence and tantamounts to refusal of the exercise of the discretion vested in the Collector. Though not parallel, the decision in Williams v. Giddy. 1911 Appeal Cases 381, of the Privy Council lends support to this view. That was a case where the Public Service Board of New South Wales had awarded a retiring civil servant a derisory gratuity of one penny per year of service. This was challenged. Lord Macnaghten observed: "Nobody, of course can dispute that the Government or the Board bad a discretion in the matter. That was a case where the Public Service Board of New South Wales had awarded a retiring civil servant a derisory gratuity of one penny per year of service. This was challenged. Lord Macnaghten observed: "Nobody, of course can dispute that the Government or the Board bad a discretion in the matter. But ft was not an arbitrary discretion, as Pring J, seems to think; It was a discretion to be exercised reason ably, fairly, and justly." The Privy Council held that the award was a mere sham and pretence and tantamount to a refusal to exercise the statutory discretion. 10. It was observed by Lord Macnaghten again in Westminster Corporation v. L. & N. W. Railway, 1905 A. C. 426 as follows: "It is well settled that a public body invested with statutory powers such as those conferred upon the corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority committed to it. It must act in good faith. And it must act reasonably'. The last proposition is involved in the second, if not in the first." (underlining mine) The reward in question is no doubt made, based on administrative orders. But then, the factors governing the actual award should be founded on reason and sound judgment, without ignoring relevant material. The exercise of the discretion should lead to an inference of application of mind to matters relevant. 11. I therefore bold that the Collector has not, in making the award in question, properly considered the various circumstances which are relevant in the context of making the award. There has been no proper application of the mind to the relative merits, or importance of the various factors and circumstances. The award made appears to be trivial compared to the substantial haul that has been made, because of the action initiated on the information given by the petitioner. 12. I quash Ext. P5 and direct the second respondent to consider the matter afresh in the light of the observations contained in this judgment and in the judgments in O. P. No. 9014 and Writ Appeal No. 3SS of 1984. The second respondent will also keep in mind the fact that over 19 years have passed after the seizure was made. The original petition is allowed as above. Issue photo copy of this judgment on usual terms.