2023 (1) TMI 1108 - HC - Customs

Withholding of final reward - petitioner's claim as a legal heir - establishment of identity - HELD THAT - It is not in dispute that the information was received which led to the successful seizure of the smuggled goods. The Informer for this seizure was therefore entitled to final reward. It is not the case of the Respondents that there is some other person entitled to final reward. Most importantly, two interim rewards have been released. They are obviously released after establishing the identity of the Informer. No explanation is being offered on this count. Except for disputing the Informer's identity, the Respondents have not positively stated that the interim reward was released to some other person and not the Petitioner's husband- Chandrakant. The Petitioner has given a reasonable explanation for variances in the signature of her husband on the receipt and subsequent signature that her husband had lost his eyesight due to an accident. Once the deponent has accepted that reward at the interim stage was paid to Chandrakant and that the Petitioner has established that she is the legal heir of Chandrakant, then withholding the final reward is entirely arbitrary. Even keeping aside the above two statements made in the affidavit, considering the totality of the circumstances and that nothing is placed before us that there was some other Informer and not Chandrakant who received the interim reward in respect of the concerned case, it is found that the claim of the Petitioner could not have been rejected on the ground of identity. The policy under the Circular of 2015, postulates rewards for information. Clause 7.2, which postulates the time limit to sanction the final reward, emphasizes that it is desirable that immediately upon conclusion of the adjudication, the final reward be released as an intensive to improve compliance. Though there is no legal right to demand a reward, as stated in the policy, the rejection must not be arbitrary, and the approach should not be such that it discourages the Informers from coming forward. Ultimately, the objective of offering a reward to the Informer is to aid the department in taking measures to safeguard the public exchequer - Having concluded that the Petitioner s claim is meritorious, we find that this is a fit case where the interference of the Court is necessary. In the facts of this case, non-intervention by us in the writ jurisdiction would amount to a failure of justice. The Respondents will treat the claim of the Petitioner's husband Chandrakant as eligible for the grant of final reward in respect of the concerned case and process the Petitioner s claim as his legal heir - Application disposed off.

Issues Involved:
1. Entitlement to final reward for the deceased Informer.
2. Verification of the Informer's identity.
3. Delay in disbursal of the final reward.
4. Petitioner's legal right as the Informer's heir.

Issue-wise Detailed Analysis:

1. Entitlement to Final Reward for the Deceased Informer:
The Petitioner, wife of the deceased Informer, claimed that her husband provided specific information leading to the seizure of smuggled goods, and the reward as per the policy was unjustifiably withheld. The Central Board of Excise and Customs issued Circular No. 20/2015, which outlines the guidelines for granting rewards to Informers. Clause 3.3.1 of the Circular specifies that various factors such as the specificity and accuracy of the information, the risk undertaken by the Informer, and the extent of help rendered must be considered for reward eligibility. Clause 5.1.1 states that Informers are eligible for rewards up to 20% of the net sale proceeds of the contraband seized. Clause 7.2 emphasizes the desirability of releasing the final reward immediately after the conclusion of adjudication/appeal/revision proceedings. The Petitioner argued that her husband provided information in 1991, leading to the seizure of diamonds worth Rs. 3.21 lakhs and Rs. 84.47 lakhs, respectively. Despite interim rewards being disbursed, the final reward remained unpaid.

2. Verification of the Informer's Identity:
The Respondents, in their reply affidavit, questioned the identity of the Informer, stating that the signature on the information note did not match the signatures on the ration card and PAN card provided by the Petitioner. They referred to a Reward Committee Meeting in 2014, which discussed the necessity of verifying whether the deceased was indeed the Informer. The Respondents also mentioned that a handwriting expert could not express an opinion on the authorship of the signatures. However, the Court noted that there was no communication questioning the Informer's identity from 2006 to 2019. The Petitioner provided an interim certificate issued by the Additional Commissioner of Customs, certifying a cash reward of Rs. 1 lakh to Chandrakant, and the signature on the receipt corresponded to Chandrakant's name. The Court found the Petitioner's explanation for signature variances reasonable, considering her husband's loss of eyesight due to an accident.

3. Delay in Disbursal of the Final Reward:
The Petitioner and her husband made multiple representations for the release of the final reward from 2006 onwards. Despite interim rewards being disbursed in 1993 and 1999, the final reward was not released. The Respondents' affidavit did not deny the receipt of these representations but failed to provide a satisfactory explanation for the delay. The Court emphasized that the policy under Circular No. 20/2015 mandates that the final reward should be released promptly after the conclusion of proceedings to encourage Informers to come forward. The Court criticized the Respondents for their rigid stand and lack of sensitivity in handling the case, noting that the objective of offering rewards is to aid the department in safeguarding the public exchequer.

4. Petitioner's Legal Right as the Informer's Heir:
The Petitioner, as the legal heir of Chandrakant, was granted a succession certificate by the Joint Civil Judge Junior Division, Thane. The Court observed that the marital status of the Petitioner with Chandrakant was undisputed, and the Petitioner had executed an affidavit for the declaration of the legal heir. The Court noted that the Respondents had not positively stated that the interim reward was released to someone other than Chandrakant. The Court concluded that the Petitioner's claim was meritorious and that non-intervention would amount to a failure of justice.

Conclusion:
The Court directed the Respondents to treat the claim of the Petitioner's husband as eligible for the final reward and process the Petitioner's claim as his legal heir. The exact amount to be paid was left to the Respondents-Authorities to determine as per the Policy. This exercise was to be carried out within ten weeks, and the amount determined was to be paid to the Petitioner within twelve weeks. The Rule was made absolute with no order as to costs.

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