2003 (12) TMI 55 - SC - Customs

Whether the respondent had any legal right to claim the amount by way of reward as a matter of right? Held that - This is not a case where some large scale smuggling operations had been brought to light or the identity of some hard core smugglers had been revealed as a result of the information given by the respondent. Yet the learned Single Judge of the High Court issued a writ that apart from ₹ 10 lakhs which had already been paid a further amount of ₹ 25 lakhs should be paid to the respondent within four weeks and the appellant was further directed to determine the respondent s entitlement of balance amount of the reward and pay the same within three months. The Division Bench in appeal only partly modified the order and issued directions for payment of ₹ 5 lakhs within three weeks on the receipt of the copy of the order and a further sum of ₹ 5 lakhs within three weeks thereafter. It was further directed that in case the department failed to comply with the aforesaid direction within the stipulated time, it will have to pay the rest of the amount as per the orders of the learned Single Judge. We do not find any justification for passing these kind of peremptory orders. It is not a case of any hardship having been caused like delay in making payment of compensation to victims of an accident or to an agriculturist whose land may have been acquired depriving him of his only source of livelihood. On merits also we are clearly of the opinion that the orders passed by the High Court are not only wholly unwarranted but are also without any legal basis and are consequently liable to be set aside.

Summary

Issues Involved:

1. Entitlement to reward for providing information on customs duty evasion.
2. Applicability of guidelines for reward payment.
3. Legitimacy of issuing a Writ of Mandamus for reward payment.

Issue-wise Detailed Analysis:

1. Entitlement to Reward for Providing Information on Customs Duty Evasion:

The respondent filed a writ petition claiming a reward for providing information about customs duty evasion by M/s. Sanjeevani and M/s. FOMETA. The information led to the confiscation of goods and imposition of penalties. The learned Single Judge acknowledged that the respondent provided the information leading to the seizure and adjudication proceedings, entitling him to a reward. However, the counter-affidavit from the Department did not admit that the investigation was solely based on the respondent's information. The High Court's decision was based on the assumption that the respondent's information was crucial, but this was not substantiated.

2. Applicability of Guidelines for Reward Payment:

The Union of India argued that the amended guidelines of 30-3-1989, which state that rewards should be paid only after actual realization of duty, fine, and penalty, should apply. The High Court held that the revised guidelines could not be applied retrospectively and that the original guidelines of 30-3-1985 should govern the reward payment. However, the Supreme Court found this view erroneous. It emphasized that the claim for reward was made in 1993, and thus, the guidelines in force at that time, which were the amended guidelines of 1989, should apply. The Supreme Court referenced Union of India v. R. Padmanabhan, asserting that rewards being ex-gratia payments are subject to the guidelines in force at the time of consideration and actual grant.

3. Legitimacy of Issuing a Writ of Mandamus for Reward Payment:

The Supreme Court highlighted that a Writ of Mandamus can only be issued where there is a statutory duty imposed by law. Since the reward is an ex-gratia payment and not a statutory right, no Writ of Mandamus can compel the payment of a specific amount as a reward. The guidelines clearly state that rewards are at the absolute discretion of the competent authority and cannot be claimed as a matter of right. The High Court's directive to pay a quantified amount was thus legally unsustainable, as it overstepped the discretionary nature of reward payments.

Conclusion:

The Supreme Court allowed the appeal by the Union of India, setting aside the High Court's orders and dismissing the writ petition. The respondent's appeal was also dismissed, affirming that rewards are discretionary and subject to guidelines in force at the time of consideration, with no legal right to claim a specific amount. The case underscores the principle that ex-gratia payments like rewards cannot be mandated through judicial orders unless there is a statutory obligation.