Union of India v. Padmanabhan — 1999 DIGILAW 32 (KER)

Judgment :- Union of India/ Ministry of Finance is the appellant in this appeal. The respondent, who is an I.P.S. Officer in the Kerala cadre, filed the Original Petition to quash Exts. P6, P7 and P5 orders and for a mandamus directing the appellant to sanction and pay the reward to him in accordance with the scale mentioned in the guidelines and to declare that he is entitled to the reward on the guidelines indicated in Exts. P1 and P2. Ext. P1 is issued by the Department of Revenue, Ministry of Finance, Government of India dated 30.3.1985 to all heads of departments under the Central Board of Excise and Customs in regard to grant of rewards to informers and government servants. Ext. P1 is again issued by the Government of India, Ministry of Finance on 13.4.1989 to all heads of departments under the Central Board of Excise and Customs in regard to grant of rewards to the government servants and informers. Under Ext. P2, the Government have reviewed the existing policy, procedures and orders contained in Ext. P1. The above two orders were issued by the Government of India with a view to encourage detection of smuggling of gold. The guidelines provide for grant of reward to the informers and government servants. According to these guidelines, 20% of the estimated marked value of the contraband gold seized or Rs. 5,800/- per gold biscuit is the reward to be given to the government servants and another 20% to the informants. 2. In the instant case, team of police officials of Kerala Police headed by the respondent effected seizure of 900 contraband gold biscuits by their own efforts and information gathered by them in Calicut District on 24.2.1989. They also arrested the person involved in the smuggling. A case was also registered against the accused. While the investigation in the case was progressing, then Additional Collector of Customs, Cochin requested the respondent to handover the seized gold and the accused persons to the customs. The contraband seized and the accused were handed over to the Customs for further investigation. From the confession made by the accused persons, the Customs and DRI Officials effected a further seizure of 1600 gold biscuits from Cannanore District the next day. The respondent forwarded a list of names, who are eligible for the reward, explaining the role played by such one of them. From the confession made by the accused persons, the Customs and DRI Officials effected a further seizure of 1600 gold biscuits from Cannanore District the next day. The respondent forwarded a list of names, who are eligible for the reward, explaining the role played by such one of them. The Director General of police as Head of Department of the Kerala Police also forwarded to the Collector of Customs a reward role recommending full reward to the respondent, since he had recruited the informant, worked out the information and seized the contraband gold. According to the respondent, who was mainly responsible for the detection of contraband gold valued approximately at Rs. 3.5 crores and exposed himself to the risk of attack by the smugglers. Since he was not considered for the reward, the respondent submitted Ext. P4 representation to the Chairman, Board of Revenue, New Delhi on 3.6.1989. By Ext. P5 dated 21.8.1989 the respondent was informed that as the Board have not agreed to granting reward to their own officers above the rank of Assistant Collector, his request for grant of reward cannot be acceded to. Respondent sent another representation to the Secretary, Ministry of Finance in September 1989. To this, Ext. P6 reply was given declining to grant reward to the respondent for the very same reason mentioned in Ext. P5. Thereupon, the respondent appealed to the Union Finance Minister. By Ext. P7, the Respondent was informed that "as per existing reward policy, officers higher than the rank of the Assistant Collector of Customs and Central Excise and Officers of equivalent rank in other departments are not eligible for reward." Thereupon the respondent filed Ext. P8 review petition before the Prime Minister of India highlighting his grievances in regard to grant of reward to him. However, according to the respondent, he has not received any reply to Ext. P8 review petition. Thereafter, he approached this Court by filing O.P. 12775 of 1991. 3. The Assistant Collector (Legal) in the Office of the Collector of Customs and Central Excise, Cochin has filed a counter affidavit in the Original Petition. According to them, the respondent is not entitled to any of the reliefs prayed for in the Original Petition and that payment of reward to informers and government servants as per the policy and guidelines under Ext. According to them, the respondent is not entitled to any of the reliefs prayed for in the Original Petition and that payment of reward to informers and government servants as per the policy and guidelines under Ext. P1 is purely an ex-gratia payment within the absolute discretion of the Central Government and no-one is entitled to claim it as a matter of right. It was further submitted that the respondent is not eligible for reward at all as per the reward guidelines contained in Ext. P1. It is also contended that the respondent, being a government servant above the level of group W, he is not eligible for any reward as per Ext. P1 guidelines. 4. T.L. Viswanatha Iyer, J., after hearing the above Original Petition, qushed Exts. P5, P6 and P7 orders and directed the Union of India to grant reward due to the respondent after fixing the quantum in accordance with Ext. P1. While coming to the above conclusion, the learned judge observed thus: "Clause 7.2 shows that group" A' officers above the level of Assistant Collector/ Assistant Director will not be eligible on the basis of the value of seizure: but Government may consider grant of lump-sum payment etc. in appropriate cases. Therefore, even group - A' officers of the level mentioned, are not totally barred from the reward; the clause only says that it may take a different shape and it may be on a different basis. The assumption made by the respondents (in Ext. P7) that officers higher in rank than the Assistant Collector are not eligible for reward is not thus warranted by the clause. Therefore, and even assuming that the petitioner is an officer of the category mentioned in clause 7.2, it will not be correct to say that a reward to him is totally taboo. He is entitled to a reward, but on a different basis." The learned judge has further observed that no provision of law was pointed out to him either in the All India Services Act, 1951, or in any of the Rules framed thereunder classifying the members of the Indian Police Service into groups. He is entitled to a reward, but on a different basis." The learned judge has further observed that no provision of law was pointed out to him either in the All India Services Act, 1951, or in any of the Rules framed thereunder classifying the members of the Indian Police Service into groups. But, according to the learned judge, such a classification into groups A, B,C and D exists in the Central Civil Services described in the Schedule to the Central Civil Services (Classification, Control and appeal) Rules, 1965 and that these rules do not apply to any member of All India Services by virtue of their exclusion there from under R.3(c). The learned judge was also of the view that clause 7.2 applies only to the officers of the concerned department of the Government of India and not to others and that the said clause does not speak of any equivalent level of officers to Assistant Collector/ Assistant Director in other departments. The learned judge further observed that no rule of equivalence has been placed before him to show as to what categories in other departments fall in the level of Assistant Collector/ Assistant Director. Clause 7.2, according to the learned judge, is intended to exclude, if at all, only the officers above the level mentioned in the concerned department from being rewarded on the basis of the value of the seizure, and not others. 5. Aggrieved by the above judgement, the respondent in the Original Petition, Union of India, has preferred the above Writ Appeal. We have perused the entire documents, pleadings and the file produced by the learned Central Government Standing Counsel for the appellant. We have heard Mr. P.S. Biju, learned standing counsel for the appellant and Mr. N.N. Venkitachalam for the respondent. 6. Mr. Biju submitted that the respondent, being a high ranking official above the level of Assistant Collector of Customs and Central Excise and Officers of equivalent rank in other departments, is not eligible for reward as provided in clause 7 of Ext. P1 guidelines and hence the finding of the learned judge that the respondent is entitled for the reward is unwarranted. According to him, there is no scope for such an interpretation in view of the clear and unambiguous language used in Clause 7 of Ext. P1. P1 guidelines and hence the finding of the learned judge that the respondent is entitled for the reward is unwarranted. According to him, there is no scope for such an interpretation in view of the clear and unambiguous language used in Clause 7 of Ext. P1. It is argued further that the respondent was only discharging his duty in directing officers and men of the lower rank to effect seizure of the contraband for which he should not have expected any monetary reward. He would further submit that the grant of the reward is purely an ex-gratia payment within the absolute discretion of the Government of India and, therefore, the learned judge ought not have held that the rejection of the claim for reward is an unreasonable exercise of discretion and is discriminatory. It is also submitted that the grant of reward is a policy decision of the Government of India and is an ex-gratia payment within the absolute discretion of the Government and, therefore, it does not give a legally enforceable right to anyone and hence the learned judge should have dismissed the Original Petition on the preliminary ground that the claim is neither justiciable nor sustainable. 7. Per contra, Mr. N.N. Venkitachalam submitted that the respondent was solely responsible for the seizure, who had recruited the informant, worked out the information, arranged surveillance till seizure, selected proper officers to act at the appropriate time, monitored the entire operation through VHP till seizure, directed the operation leading to the arrest of the smugglers other than the carriers, arranged for safe custody of the contraband goods and the accused and liased with the Customs Officials till the seized gold and accused were handed over to the Customs Officials. According to learned counsel for the respondent, respondent is not in the cadre of Centre Excise and Customs Department and the restriction in regard to payment of reward for persons above the rank of Assistant Collectors/ Assistant Directors is confined to officers of that Department alone and, therefore, the respondent, being a very senior IPS Officer, cannot be equated to any equivalent cadre in the Indian Revenue Service. He would, therefore, urge that Exts. P6 and P7 orders suffers from errors of law. 8. He would, therefore, urge that Exts. P6 and P7 orders suffers from errors of law. 8. The question that arises for consideration is whether the respondent, who is mainly responsible for the detection and seizure of 900 contraband gold biscuits, is entitled for the reward. A further question may also arise for consideration as to whether the restriction to officers above the rank of Assistant Collectors/ Assistant Directors is applicable only to the Officers of the Customs Department and not to officers borne on other cadres. 9. As already referred, Exts. P1 and P2 are the guidelines in regard to grant of rewards to informers and government servants. Ext. P4 is the representation made by the respondent on 3.6.1989 to to the Chairman, Central Board of Customs and Central Excise, New Delhi wherein he had highlighted the role played by him in the seizure of the contraband gold. An Annexure is seen filed along with Ext. P4 furnishing the details/ role played by officers in connection with the seizure of the contraband gold. The role played by the respondent is reproduced hereunder: "Recruited informers, worked out information, located the house of concealment of gold, arranged surveillance from 22.2.1989 till the seizure, selected proper officers to act at the appropriate time, gave the leader of the party details of the exact location of the house of concealment of contraband and the manner to act, gave direction to the leader to keep constant touch through VHP till effecting seizure, kept monitoring the operation through VHP. After seizure gave directions to locate the car CKN 9126 and the individuals who are suspected to have transported the contraband goods in the said house. Arranged safe custody of the contraband goods and the accused. Kept liaison with the Customs regarding handing over the seized goods, case records and the accused." Ext. P5 is the reply by the Ministry of Finance, Government of India to Ext. P4. A perusal of Ext. P5 would show that the said order does not contain any reason for rejection of the reward to the respondent. Ext. P6 is another order by the Government of India dated 6.10.1989 issued to the respondent stating that the government was not able to accede to his request for grant of reward. Ext. P4. A perusal of Ext. P5 would show that the said order does not contain any reason for rejection of the reward to the respondent. Ext. P6 is another order by the Government of India dated 6.10.1989 issued to the respondent stating that the government was not able to accede to his request for grant of reward. Ext. P7 is yet another communication issued by the Government of India dated 26.3.1990 stating that in terms of the existing reward policy, officers higher than in rank of the Assistant Collector of Customs and Central Excise and officers of equivalent rank in the other departments are not eligible for reward. 10. We have already noticed the part played by the respondent in causing the seizure of 900 contraband gold biscuits from the smugglers. It is not in dispute that he had recruited the informant, worked out the information, located the house of concealment, arranged surveillance till seizure, selected proper officers to act at the appropriate time, directed the operation leading to the arrest of the smugglers, arranged for safe custody of the contraband goods and the accused and liased with the Customs Officials till the handling over the seized goods and accused. There cannot be any dispute that the respondent had exposed himself to the grave risk of attack by the smugglers and their gang-men. He was mainly responsible for the detection of the contraband goods valued approximately at Rs. 3.5 crores. Appellant has placed reliance on the provisions of Ext. P1 in order to reject the claim of reward by the respondent on the ground that the Department is not granting rewards to their own officers above the rank of Assistant Collectors/ Assistant Directors. We have perused the provisions of Ext. P1, which is the only relevant document to be considered and applied for grant of re ward. Clause 3.1.1 of Ext. P1 says that informers and government servants will be eligible for rewards upto 20% of the estimated market value of the. contraband goods seized. Clause 4 says that the reward should not be granted as a matter of routine. Clause 4.1 says that the reward is purely an ex-gratia payment which is subject to the 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. contraband goods seized. Clause 4 says that the reward should not be granted as a matter of routine. Clause 4.1 says that the reward is purely an ex-gratia payment which is subject to the 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. The said clause further says that in determining the reward which may be granted, the authority competent to grant reward will keep in mind the specificity and accuracy of the information. The risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues to persons involved in smuggling or their associates etc. the risk involved for the government servant in working out the case. The difficulty in securing the information, the extent to which the vigilance of the staff led to the seizure, special initiative, efforts and whether besides the seizure of contraband goods, the owners/organisers/financiers/ racketeers as well as the carriers have been apprehended or not. Clause 7, which is the relevant clause in our context, deals with "to whom reward may be paid". Clauses 7.1 and 7.2 read thus: "7.1:- Ordinarily, informers and government servants (upto the level of group "A' Superintendent/ Assistant Collectors of Customs and Central Excise/ Assistant Directors) will be eligible for reward depending on the contribution made by them as a team as well as individually with regard to the collection of intelligence, surveillance, effecting of seizure etc. Due credit should be given to the staff employed on investigation of persons involved other than carriers of contaband goods etc. 7.2:- Group 'A' Officers above the level of Assistant Collector/ Assistant Director will not be eligible for reward on the basis of value of seizure etc. However, in appropriate cases, government may consider in consultation with CCA/DCRI/Director, Ant evasion, the grant of lump-sum payment/advance increment and/or recognition, in any other manner of the services rendered by them for which purpose the heads of the Department should forward their recommendations to the aforementioned officers with a copy to the Ministry". We are not concerned with other Clauses in Ext. P1. 11. We are not concerned with other Clauses in Ext. P1. 11. It is not in dispute, in the instant case, that the Director General of Police, as the head of the Department of Kerala Police, forwarded to the Collector of Customs, Cochin, a reward roll for police officials recommending inter alia full reward to the respondent. A careful analysis of Ext. P1 guidelines would go to show that informers and government servants are eligible for rewards upto 20% of the estimated market value of the contraband gold seized. Further, the Government servants are eligible for reward depending upon the contribution made by them as a team as well as individually with regard to collection of intelligence, surveillance, effecting of seizure etc. In the instant case, in respect of the seizure of 900 gold biscuits by the Kerala Police on 24.2.1989, collection of intelligence, surveillance and seizure was effected by the team headed by the respondent and others. In this case, the accused other than the carriers were also arrested by the police and then handed over to the Customs officials for further interrogation and investigation as requested by the Additional Collector of Customs, who was camping at Calicut. We have already referred to the details of the role played by each officer of the police team headed by the respondent, which were furnished to the Collector of Customs by the Director General of Police, who is the head of the Department of Kerala Police. There cannot be any dispute that the respondent was mainly responsible for the detection and seizure of the contraband gold. However, the reward was denied to the respondent alone placing reliance on Clause 7.1 of Ext. P1. According to us, Clause 7.1 is applicable only to the Customs and Central Excise Department and not to other agencies particularly to State Police officials as the guidelines do not mention about equivalent officers of other departments. Therefore, the ceiling on applicability to Customs and Excise officials should not be applied to the respondent and reward as recommended by the Director General of Police should be disbursed to him. Even assuming that this clause is made applicable to the State Police officials also, the clause, in our opinion, is only applicable to ordinary cases as the clause starts with the word 'ordinarily'. Even assuming that this clause is made applicable to the State Police officials also, the clause, in our opinion, is only applicable to ordinary cases as the clause starts with the word 'ordinarily'. In our view, the case of the respondent should be considered as an extraordinary one as from the very beginning he had played an important part till the seizure was effected exposing himself to the grave risk of attack by the smugglers and, therefore, we are of the opinion that the reward should be given to him also. Our attention was also drawn to P. No. R-13011/5/89-ad. v. of the Department of Revenue which limits the total reward to Rs.1 lakh per seizure and to a total limit of Rs. 10 lakhs in one's career. The said circular was issued in April 1989 and the seizure in the present case was effected in February 1989. As such, the said circular, in our view, cannot be given retrospective effect. This apart, clause 7.2. of Ext. P1 provides for lump sum payment in respect of officers above the rank of Assistant Collectors/ Assistant Directors and the lump sum grant will be as recommended by the Head of the Department. In this case, the Head of the Department, after furnishing details of the role played by each official, had also recommended full reward to the respondent. If the recommendation of the Head of the Department cannot be considered as provided for in the guidelines for giving full reward to the respondent, who is above the rank of Assistant Collectors/ Assistant Directors, then perhaps the guidelines itself cannot be applied to the respondent. Perhaps, this could be the intention of the framgers of the guidelines as the guidelines do not mention about officers equivalent in rank in other departments. If this is so, the rule applicable to the respondent should be the State Rules. The recommendation of the Director General of Police for full reward to the respondent was mainly to encourage the officers of the State Police to actually curb smuggling activities. Since the seized material was appropriated to the Central revenue, the reward has to come from the Central exchequer as recommended by the Head of the Department. 12. The recommendation of the Director General of Police for full reward to the respondent was mainly to encourage the officers of the State Police to actually curb smuggling activities. Since the seized material was appropriated to the Central revenue, the reward has to come from the Central exchequer as recommended by the Head of the Department. 12. The learned single judge, who has disposed of the Original Petition, has also opined that Clause 7.2 is intended to exclude only the officers above the rank mentioned in the concerned department from being rewarded on the basis of the value of the seizure and not others. He was also of the view that Clause 7 applies only to officers in the concerned department of the Government of India and not to others. We are in entire agreement with the opinion expressed by the learned single judge. 13. Learned Central Government Standing Counsel has argued that Clause 4.1 of Ext. P1 specifically states that the reward is purely an ex-gratia payment and that the said payment is subject to the guidelines and 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. There is no dispute with regard to the above clause. The fact that it is an ex-gratia payment does not imply that it can be refused if otherwise the person is eligible for it under the guidelines. The Central Government cannot grant it to some and refuse it to others merely because the matter is one of discretion. The discretion has to be exercised reasonably and in the same manner for all. We have perused the file placed before us by the learned Standing Counsel. The Ministry of Finance, Department of Revenue, Government of India informed the Commissioner of Central Excise and Customs, Cochin about the decision taken by the Board deciding to grant reward of Rs. 1.25 lakhs to the respondent in view of the role played by him and the recommendations of the Directorate of Revenue Intelligence on the issue. For the reasons stated earlier, we are of the opinion that the reward now granted by the above communication is not the proper one which could be sanctioned to the respondent on the facts and circumstances of the case. For the reasons stated earlier, we are of the opinion that the reward now granted by the above communication is not the proper one which could be sanctioned to the respondent on the facts and circumstances of the case. A perusal of the reward proposal by the Director General of Directorate of Revenue Intelligence would also reveal that the respondent, being a group 'A' officer above the level of Assistant Collector/ Assistant Director, is not eligible for reward on the basis of value of the seizure. Since he had played a vital role, the proposal was made requesting the government to consider grant of lump-sum reward to him. The Director General recommended a sum of Rs. 1,25,000/- as lump-sum reward subject to the approval by the Board and also of the final outcome of the present Writ Appeal filed by the appellant. We have also perused the minutes of the Reward Committee meeting on 7.4.1995. It is stated in paragraph 8 that as far as the claim of the respondent for payment of reward to him is concerned, the Committee observed that he had played a vital role in this case, inasmuch as he had collected information from his source and directed his team of Police Officers to search the premises which led to the recovery of contraband gold on the basis of the specific information collected by him. Keeping in view of his specific role, the Committee recommended payment of lump-sum reward of Rs. 1,25,000/- to the respondent. 14. It appears that the Customs and Central Excise officials were carried away by the instructions issued by the Central Board of Excise and Customs while sanctioning the amount. The instruction issued is to the following effect: "The more senior the officer, the less eligible he should be for reward." We are unable to appreciate the stand taken by the Department Officials in regard to the applicability of the instructions to the respondent. Even according to their reports, the Committee had observed that the respondent had played a vital role in the detection and seizure of the contraband gold. Under such circumstances, the instruction issued by the Central Board of Excise and Customs to discriminate senior officers for their eligibility to reward cannot at all be appreciated. We are of the opinion that officers cannot be discriminated for reward because of their rank. Under such circumstances, the instruction issued by the Central Board of Excise and Customs to discriminate senior officers for their eligibility to reward cannot at all be appreciated. We are of the opinion that officers cannot be discriminated for reward because of their rank. In our opinion, the eligibility criteria should be the same for both. A perusal of the File would also show that, in this case, an amount of Rs. 52,44,750/- is available for reward to officers, and that the amount available for advance reward is Rs. 26,22,375/-. It is seen from the proposal for sanction of advance reward to officers, the reward was given to N. Chandran, S.I. of Police, Nadakkavu and 162 others. Respondent alone was singled out on the ground that he being a senior officer, is not eligible for the reward. Likewise, sanction was also accorded to the Customs officials numbering about 115 depending upon the part played by each of them. It is also seen that a reward of Rs. 26 lakhs has been given to the informer in the case on hand. In the circumstances, we are of the view that the respondent is also eligible for reward as per Ext. P1 guidelines. 15. In the result, we confirm the judgment of the learned single judge quashing Ext. P5, P6 and P7 orders. The appellant shall grant the respondent reward due to him after fixing the quantum in accordance with Ext. P1 as expeditiously as possible, at any rate within a period of two months from the date of receipt of a copy of this judgment. 16. Though the respondent has claimed penal interest, we are of the opinion that no penal interest need be awarded. However, we make it clear that if the Government of India, appellant herein, fails to pass an order within the time stipulated and make payment within one month from the date of its order to the respondent, the amount so awarded shall carry interest at the rate of 15% per annum from the date of its due till payment. The Writ Appeal is dismissed. There will be no order as to costs.