By TIOL News Service

MUMBAI, MAY 11, 2015: THE Petitioner, an informer, has filed a Writ Petition seeking a direction to the Customs department to forthwith release the balance amount of reward due and payable.

Brief Facts:

The Petitioner gave information to the Commissioner of Customs (I), JNCH about specific goods which were imported by a Bill of Lading and pursuant to which the Customs officials conducted raids and seized the goods.

Investigation into the said case culminated into issuance of a SCN to the said importers and after adjudication of the proceedings, by an order dated 31st March, 2011 the said goods were confiscated and penalty was imposed on the importers. The Respondents subsequently paid an advance reward amount of Rs.5lacs to the Petitioner after the seizure of the said goods as per the reward policy framed by the Ministry of Finance, Department of Revenue, Government of India dated 16th April, 2004 bearing F.No. R-13011/6/2001-Cus(AS). The Petitioner further submitted that despite repeated reminders and representations, the Respondents have failed to make the payment of the balance reward amount and, therefore, the Petitioner was left with no other alternative than to approach this Court by filing the present Petition.

The Dy. Commissioner of Customs (CIU), JNCH filed an affidavit that the department received information some time in January 2010 about smuggling of consumer goods by mis-declaring the same as "Welded Mesh"; that SIIB, ICD, Tuglakabad had detected case in February 2010 where consumer goods were sought to be cleared in the name of "Welded Mesh" and accordingly, an All India Alert had been issued on 17th and 23rd February, 2010 in the name of some of the firms including M/s. Track Exports India Pvt. Ltd. That the department during watch on such imports also received information from the Petitioner on 19th July 2010 about import of consumer goods by concealing them in five containers and later the case was booked; that the department on seizure of the goods, paid Rs.5 lakhs to the Petitioner as advance reward; that the matter was considered by the Reward Committee on 28th June, 2012 and although it was not in favour of further reward, the matter was left open because Directorate of Vigilance was conducting enquiry; that since the investigation is over, the Reward Committee will be convened for considering the final reward to the informer or otherwise.

It is also submitted that the contention of the Petitioner that he is entitled to balance reward of Rs.48 lakhs is totally misplaced as the Petitioner cannot claim any reward as a matter of right because the reward is purely an ex gratia payment. Reliance is placed on the apex court decision in the case of Union of India v. C. Krishna Reddy - 2004-TIOL-10-SC-REWARD.

The petitioner pleaded that he had put his life to risk and provided information to the Respondents and the same led to the seizure of the five containers, that the Respondent has received an amount of Rs.2,65,26,500/- as and by way of auction of the confiscated goods; that information about the specific five containers which were lying in the CFS, Maersk Line since March 2010 were given by the petitioner and, therefore, Petitioner is entitled for the entire reward amount and the Respondents cannot deny the legitimate dues of the Petitioner on flimsy grounds. It is further contended that the Government has framed the policy with a view to unearth the evasion of customs duty at the hands of unscrupulous elements in the trade and the persons like the Petitioner are therefore providing information to the Government authorities with a legitimate expectation that they will get reward as per the guidelines framed by the Government of India.

The High Court distinguished the decision relied upon by the Respondent by narrating the facts therein and noting that it was 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 in the present case. Inasmuch as the said decision is of no avail to the Respondents, the High Court added.

Adverting to the SCN dated 03.12.2010 which in unequivocal terms mentioned that "Specific information was received by the officers of Central Intelligence Unit",the High Court observed that it failed to appreciate the stand taken by the Dy. Commr. in his affidavit that they were already in receipt of information some time in January 2010 and they were acting upon the said information and, therefore, the Petitioner is not entitled for the balance of the reward amount. The High Court also exclaimed that if the Respondent Department was in receipt of the specific information, it is not disclosed as to what prevented them from acting on the said information swiftly; that from January 2010 to July 2010 the officers of the Respondent authorities did not act upon so called alleged information which was already with them and it was only after the receipt of information on 19th July, 2010 from the Petitioner, they conducted the raids in the matter.

Opining that the Customs officers, at this stage, cannot be allowed to take a specious plea that they were already in receipt of the information since January 2010 and therefore, the Petitioner is not entitled for further reward amount, the High Court further added that the stand taken by the Respondent authorities appears to be clearly an afterthought, taken only with a view to deprive the informer / Petitioner from his legitimate dues / payments towards his reward as per the reward policy.

The High Court also added -

+ That though paragraph 5 of the said policy dated 16th April, 2004 mentions that the reward is purely an ex-gratia payment and cannot be claimed by anyone as a matter of right, the ex-gratia payment has to be paid in consonance with the guidelines and the scheme dated 16th April, 2004 framed by the Government of India and the informer cannot be left to the whims and caprices and /or mercy of the Respondents and/or the members of the Reward Committee.

+ The Government of India has framed the reward policy with a view to follow the same by all the concerned in its proper spirit and the Respondents cannot be allowed to frustrate the same by giving the informer only an assurance of reward as mentioned in the schedule.

The petition was allowed and the respondents were directed to pay the reward as applicable under the policy within a period of three months.

(See 2015-TIOL-1209-HC-MUM-CUS)