1988 (4) TMI 276 - HC - Customs

Summary

Issues Involved:
1. Adequacy of the reward granted to the petitioner for providing information leading to the seizure of contraband goods.
2. Proper exercise of discretion by the Collector in determining the reward amount.
3. Relevance of the discrepancy in the vessel's name in determining the reward.

Issue-wise Detailed Analysis:

1. Adequacy of the reward granted to the petitioner for providing information leading to the seizure of contraband goods:
The petitioner provided information to the Customs Department about an attempt to smuggle gold, leading to the seizure of 40,000 tolas of contraband gold and 4998 wrist watches from a vessel named Anwar. Initially, the petitioner was awarded Rs. 25,000/-, although the rules permitted a reward of up to Rs. 6 lakhs for the gold seized. Despite frequent appeals, no further substantial reward was granted. The petitioner challenged this by filing a writ petition (O.P. No. 9014/82), which was allowed, and the respondents were directed to reconsider the reward amount. However, after reconsideration, only an additional Rs. 2,500/- was awarded, making a total of Rs. 27,500/-, which the petitioner challenged as unreasonable.

2. Proper exercise of discretion by the Collector in determining the reward amount:
The judgment emphasized that the discretion vested in the Collector should be exercised reasonably and not arbitrarily. The Collector's decision to limit the additional reward to Rs. 2,500/- was criticized for lacking proper reasoning and failing to consider the substantial information provided by the petitioner, which led to a significant seizure. The court noted that the factors such as the accuracy, utility, and difficulty in obtaining the information should be considered. The judgment highlighted that the discretion must be exercised in good faith and should promote the intended objective of the standing order, which was to reward valuable information leading to significant seizures.

3. Relevance of the discrepancy in the vessel's name in determining the reward:
The respondents argued that the petitioner was not entitled to the full reward due to a discrepancy in the vessel's name (Saraswathy vs. Anwar). However, both the Single Judge and the Division Bench found this approach hypertechnical, arbitrary, and unreal. They held that the information provided by the petitioner was substantial and led to the seizure, regardless of the vessel's name discrepancy. The court reiterated that the information's overall accuracy and the successful seizure were the critical factors, not the minor error in the vessel's name.

Conclusion:
The court quashed the Collector's order limiting the reward to Rs. 27,500/- and directed the second respondent to reconsider the matter afresh, considering the observations made in this judgment and the previous judgments in O.P. No. 9014 of 1982 and Writ Appeal No. 355 of 1984. The court stressed the importance of a fair and reasonable exercise of discretion, taking into account the valuable information provided by the petitioner and the substantial seizure made as a result. The judgment underscored that the reward should reflect the significance of the information and the successful outcome of the seizure operation.