2003 (8) TMI 227 - SC - Central Excise

Rewards to Informers and Government servants - Quantum of - Reward to Informers and Government servants - Classification

Summary

Issues Involved:
1. Eligibility for reward under the Guidelines.
2. Applicability of the amendment limiting rewards.
3. Interpretation of the Guidelines regarding the exclusion of certain officers.
4. Consideration of the reward as an ex gratia payment.

Detailed Analysis:

1. Eligibility for Reward under the Guidelines:
The respondent, an IPS Officer, supervised and executed an operation resulting in the seizure of 900 gold biscuits, leading to further seizures. Despite his significant role, no reward was sanctioned to him due to his rank being higher than that of Assistant Collector/Assistant Director, as per Clause 7.1 of the Notification dated 30-3-1985. The learned Single Judge directed the Department to consider the respondent's claims on merits, interpreting Clause 7.2 as excluding only officers above the specified level in certain departments from rewards based on seizure value, not others.

2. Applicability of the Amendment Limiting Rewards:
The appellant argued that the amendment issued in April 1989, which limited the total reward to Rs. 1 lakh per seizure and Rs. 10 lakhs in one's career, should apply. The High Court, however, deemed this amendment irrelevant as the seizure occurred on 24-12-1989, before the amendment. The Supreme Court clarified that reward being an ex gratia payment, no right to any sum accrues until it is determined and awarded, and should conform to the Guidelines in force at the time of consideration and actual grant, not at the time of seizure. Therefore, the amendment was relevant and applicable.

3. Interpretation of the Guidelines Regarding the Exclusion of Certain Officers:
The High Court's interpretation that Clause 7.1's restrictions applied only to officers of the Central Excise/Customs Department was rejected. The Supreme Court stated that the classification was between informers and Government servants as a whole, not specific to any department. The Guidelines must be applied uniformly, and equivalence in other departments must be determined based on the gradation of offices held.

4. Consideration of the Reward as an Ex Gratia Payment:
The Supreme Court emphasized that reward is purely an ex gratia payment, subject to the Guidelines and the discretion of the competent authority. It cannot be claimed as a matter of right and must be within the four corners of the Scheme. The High Court's assumption that Government servants should be shown the same consideration as informers was incorrect. The reward must be determined based on the Guidelines in force at the time of adjudication resulting in confiscation, not at the time of seizure.

Conclusion:
The Supreme Court set aside the High Court's judgment, highlighting the need for adherence to the Guidelines and the relevance of the amendment limiting rewards. Considering the respondent's efforts and the delay involved, the Court directed the payment of Rs. 2.50 lakhs as a special case, to be disbursed within sixty days, and ordered the appellant to pay Rs. 15,000/- for the respondent's costs.