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2001 DIGILAW 1201 (MAD)

R. David v. Collector of Central Excise and Customs Tiruchirapalli

2001-10-09

P.K.MISRA

body2001
Judgment :- The Order of the Court is as follows :- Petitioners have prayed for quashing the order dated 19-5-1995 passed by the first respondent and for a direction to the respondents to pay reward of 20% of the estimated market value of the articles seized pursuant to the information furnished by the petitioners. This is third sojourn to the High Court and hopefully the last. 2.A brief recount of the facts are necessary :- On the basis of the information furnished by the petitioners to the effect that contraband articles have been kept concealed in a ship which had come from Singapore and berthed in Tuticorin Harbour, contraband articles worth about Rs. 9, 98, 000/- had admittedly been seized. Since the petitioners were not given the reward, one of them, namely the first petitioner had filed W.P. No. 8857 of 1989. When the aforesaid case was taken up for hearing on 2-11-1989, it was stated on behalf of the respondents that question of reward was under consideration and accordingly the aforesaid writ petition was dismissed with the observation : ". . . The respondents are directed to consider the claim of the petitioners and decide whether the petitioner is entitled to reward as claimed by him. The respondents shall dispose of the proceedings relating to the claim of the petitioner within a period of 8 weeks from the date of receipt of this order . . ." Thereafter it was decided to reward a total sum of Rs. 30, 000/- but the petitioners declined to accept the same and filed W.P. No. 1416 of 1990 claiming that under the scheme, the informers were entitled to receive 20 per cent of the estimated market value. The aforesaid case was allowed by this Court by an order dated 3-4-1995 and the authorities were directed to reconsider the question. Learned single Judge while disposing the said writ petition referred to an earlier Division Bench decision of this Court reported in 1990 WLR 50 (Govindaraj, L.K.v.Central Board of Customs) to the following effect :- "While passing orders on the claims made by them, it will be obligatory on the part of the respondents to give reasons for the conclusions arrived at. As to the percentage to which they would be entitled to in the event of reward being granted, as to why anything less than what is prescribed under the policy circular is being granted to them, suitable reasons will have to be given." and proceeded to observe : ". .. . . . . Therefore the only way to understand the judgment of the Division Bench is that normally the maximum reward should be given to the informers, and if the respondents think that a particular informant is not entitled to the maximum grant of 20%, they should pass an order, giving reasons, why a lesser amount is awarded." Thereafter the learned Judge disposed of the writ petition by giving the following directions :- ". . . . . 1. The respondents shall give notice to the petitioners before considering the question as to the quantum of reward that is proposed to be awarded to the petitioners. 2. If the respondents decide to give a lesser amount than 20%, then they should give adequate and valid reasons for the same. The above exercise shall be completed within a period of three months from the date of receipt of a copy of this order. The writ petition is allowed in the above terms. .." 3.It is to be noted that the aforesaid decision between the parties has not been challenged by the present respondents. After the aforesaid decision was rendered, the first respondent considered the question afresh and under the impugned order came to the conclusion that the quantum of reward already sanctioned in the case was adequate. In other words, the first respondent came to the very same conclusion which has been reached by his predecessor. The aforesaid order is being challenged by the petitioners in the present writ petition. 4.A counter-affidavit has been filed on behalf of the respondents reiterating the stand reflected in the impugned order. It has been contended in the counter affidavit that the question of reward being a discretionary, the petitioners have no justification to claim any higher amount than what has been granted on earlier occasion. 4.A counter-affidavit has been filed on behalf of the respondents reiterating the stand reflected in the impugned order. It has been contended in the counter affidavit that the question of reward being a discretionary, the petitioners have no justification to claim any higher amount than what has been granted on earlier occasion. It has also been stated in the impugned order as well as in the counter-affidavit that even though articles have been seized pursuant to the information received, the informers have not disclosed the names of the consignor and the consignee and as such the smugglers involved in the particular act of smuggling have not been identified and therefore, there is no reason to give any higher amount. 5.Learned Counsel appearing for the petitioners submitted that in view of the observation made in the earlier writ petition by the single Judge between the parties, in normal course 20 per cent of the estimated market value of the seized contraband articles should be given as a reward and if anything less is to be given, adequate reasons have to be furnished. It is also submitted that even though there is a specific direction in the earlier decision that notice should be issued to the present petitioners before redetermining the question of extent of reward, such direction has not been complied with and no notice had been issued. 6The last submission is required to be considered first. It has been specifically asserted in the writ petition that before redetermining the question of reward, the Collector had not issued any notice. In Paragraph 14 of the affidavit it has been asserted :- "This Hon'ble Court while ordering W.P. 1416/90 had specifically directed that the petitioners be afforded an opportunity before a final order is passed on the question of payment of reward. But the petitioners have not been issued any notice, no opportunity is given to them to explain their point of view, the impugned order has been suddenly passed. In this view also the impugned order is liable to be set aside." 7.In the counter-affidavit filed on behalf of the respondents, this assertion has not at all been denied. On the other hand it has been specifically stated that : "The Commissioner (Respondent) has duly implemented the direction of this Hon'ble Court by issuing his proceedings in C.NO.VIII/10/10/95-Cus. In this view also the impugned order is liable to be set aside." 7.In the counter-affidavit filed on behalf of the respondents, this assertion has not at all been denied. On the other hand it has been specifically stated that : "The Commissioner (Respondent) has duly implemented the direction of this Hon'ble Court by issuing his proceedings in C.NO.VIII/10/10/95-Cus. Pol, dated 19-5-1995 to the petitioners furnishing them adequate and valid reasons for giving them that quantum, of reward. Therefore, no question of issuing a notice to the petitioners and granting them an opportunity to explain their point of view, arises." 8.A mere perusal of the aforesaid assertion made in paragraph 15 of the counter-affidavit makes it clear that the direction given earlier by this Court that notice shall be given to the petitioners before considering the question of reward has been observed only in its breach, it is obvious that the respondents had proceeded to determine the question of reward without giving any notice, even though it has been specifically so directed earlier. It may be that the question of reward being purely a discretionary matter, the respondents thought it fit not to issue, any notice to the petitioners. However, the fact remains that the binding order passed in the earlier writ petition between the parties has not been followed and admittedly no notice has been issued before the impugned order was passed. On this score alone, the writ petition is bound to be allowed. 9.In normal course, I would have remanded the matter for fresh consideration. However, since the matter has remained pending for more than a decade and a half, it would not be in the interest of justice to prolong further the agony of the petitioners, who after having given information which led to actual seizure of the contraband articles, have been knocking unsuccessfully at the doors of the powers that be. Even though I am conscious that the question of giving reward is an administrative matter and obviously a discretionary one ordinarily to be left for the concerned authorities, with a view (hopefully) to bring the litigation to an end, I proceed to determine the question of reward finally instead of remanding the same for fresh consideration. Even though I am conscious that the question of giving reward is an administrative matter and obviously a discretionary one ordinarily to be left for the concerned authorities, with a view (hopefully) to bring the litigation to an end, I proceed to determine the question of reward finally instead of remanding the same for fresh consideration. 10.Learned Counsel for the petitioners submitted with some vehemence that the authorities do not have any discretion in the matter and the entire amount of 20 per cent has to be given as reward particularly when the information revealed by the petitioners as led to seizure of contraband articles. Such a submission of the petitioners cannot be countenanced. The relevant provision in the circular itself indicates that the reward (up to 20 per cent) can be given. Thus it is manifest that the reward need not be 20 per cent in all cases and discretion is left with the concerned authorities to give the reward which obviously cannot exceed 20 per cent. Even though a discretion is given to the authorities concerned it goes without saying that such discretion has to be exercised in a prudent and reasonable manner and not in an arbitrary fashion. 11.In the present case on the earlier occasion this Court had expressed : ". . . normally the maximum reward should be given to the informers, and if the respondents think that a particular informant is not entitled to the maximum grant of 20%, they should pass an order, giving reasons, why a lesser amount is awarded. . . . If the respondents decide to give a lesser amount than 20%, then they should give adequate and valid reasons for the same." The authorities concerned on the earlier occasion decided to give Rs. 30, 000/- to three petitioners and even after the matter was remanded, the first respondent has merely reconfirmed the said amount. The amount fixed comes to about 3 per cent of the estimated market value of the articles seized, even though it is contemplated that reward upto 20 per cent may be given. It is of course true that the second respondent has observed that identity of the smuggler had not been disclosed by the informers and higher reward may not be given. It is of course true that the second respondent has observed that identity of the smuggler had not been disclosed by the informers and higher reward may not be given. Even though the same may be considered to be one of the relevant factors, the fact remains that the information given by the petitioners was accurate and on the basis of such information articles worth about Rs. 10 lakhs had been seized. The object of grant of such reward is to encourage the informers to come out with such vital informations so that the smuggled goods can be seized as well as the smuggling can be checked. Even though discretion is given to the authorities concerned the amount of reward should not be so niggardly as to discourage the informers from giving information. Ultimately such an attitude can be counter-predictive. It has to be remembered that informer gives information by incurring grave risks to his personal safety. There cannot be any doubt that task of determining the just reward is obviously a difficult one, but a decision has to be taken in a reasonable manner keeping in view all the relevant matters. Where all the necessary details are furnished resulting in seizure of articles as well as the discovery of the persons concerned, 20 per cent contemplated can be considered as just and proper. However, merely because the information does not give any clue regarding identity of the smuggler doesn't mean that reward should be very insignificant. 12.In the course of hearing, I had tentatively suggested to the Counsel for the respondents to obtain instructions as to whether the Department is willing to pay a sum of Rs. 30.000/- each to the petitioners (totally Rs. 90, 000/-) in addition to the amount already determined. Even though the learned Counsel appearing for the petitioners had with some reluctance agreed to the suggestion obviously with a view to bring the litigation to an end, the Counsel for the respondent expressed her helplessness in the matter. After two adjournments the Counsel for the respondent expressing her helplessness, relied upon a decision of Allahabad High Court reported in (R.B. Sharmav.Union of India) to the effect that question of grant of reward being purely an ex-gratia payment within the absolute discretion of the authorities, cannot be called in question under writ jurisdiction of the High Court. After two adjournments the Counsel for the respondent expressing her helplessness, relied upon a decision of Allahabad High Court reported in (R.B. Sharmav.Union of India) to the effect that question of grant of reward being purely an ex-gratia payment within the absolute discretion of the authorities, cannot be called in question under writ jurisdiction of the High Court. 13.Apart from the fact that in the present case such a question cannot be countenanced as there was already a direction in the earlier two writ petitions for reconsideration of the matter, I do not think it can be laid down as a proposition of law that in no case the High Court exercising jurisdiction under Article 226/227 can interfere with a discretionary order relating toex-gratiapayment. Law is fairly well settled that even relating to purely administrative matters or discretionary matters, the Court in a fit case depending upon the facts and circumstances of the case interfere with such discretionary order of an administrative authority where such discretion has been exercised arbitrarily and in an unreasonable manner. 14.Keeping in view the peculiar facts and circumstances of the case noticed earlier, I think interest of justice would be served by directing that in addition to the amount already determined, a further sum of Rs. 90, 000/- (Rupees Ninety thousand only) should be given to the petitioners as reward. (The total reward would be about 12 per cent.). Writ petition is accordingly allowed to the extent indicated above. There shall be no order as to costs.