Amrit Lal Mehta vs Director General Of Revenue ...
2004 Latest Caselaw 396 Del

JUDGMENT

B.C. Patel, C.J.

1. The Petitioner has approached this court for a writ of mandamus directing the respondent to forthwith grant full and final reward of Rs. 68,27,522/- with interest being allegedly due as per the Reward Policy dated 30.03.1985.

2. The Petitioner provided specific information at his personal risk to the Collector of Customs, Calcutta on 30.11.1987 with regard to smuggling activity by M/s J.K. Synthetics Ltd. (hereinafter referred to as "JKSL"). According to the petitioner, there was concealment in the consignment of Heavy Duty Direct Cablers imported at Calcutta by JKSL against the import license dated 6.11.1986. In the petition, the petitioner has pointed out about the manner in which the information was conveyed and how his information was helpful to the Revenue in collecting huge amount from the person (JKSL) evading the duty.

3. Subsequently, he approached the respondent No. 1 and on behalf of respondent No. 1, an affidavit is filed by one Mr R.K. Joshi, Assistant Director. It is admitted that the petitioner provided information to the Directorate of Revenue Intelligence which resulted in discovery of import of excess unauthorised consignment and an attempt of evasion of customs duty, (see para 4 to 9 at page 107). In para 24 to 29 at page 109 what is stated by respondent No. 1 is required to be reproduced here:

"24-29. In reply to the contents of paras 24 to 29, the amounts alleged to be due to the petitioner are wrong and denied. As per para 6.3 of the Reward Rules dated 30.3.85 full and final reward may be granted only after the conclusion of Appeal/Revision proceedings by the appropriate authority resulting in upholding of confiscation, demand, fine, penalty, etc. An amendment was carried out to the said Reward Policy by the Government vide letter dated 15.5.89 to the effect that the reward should be paid only after actual realisation of Central Excise duty/Customs duty/Penalty/Fine etc. In the present case, the total liability towards duty is Rs. 1,21,37,611/- and interest and penalty amounting to Rs. 2,50,00,000/- is also payable. Till now an amount of Rs. 24,32,7667- has been actually realized/recovered. As per the above Reward Policy, a maximum reward of 20% of Rs. 24,32,766/- i.e. Rs. 4,86,553.20 could be paid but the department has already disbursed as advance an amount of Rs. 6,00,000/- on 23.6.98, which is more than what the petitioner is entitled to. It is submitted that the final reward would be considered only upon actual realization of the dues."

4. Thus, it is clear that in view of the policy part amount has been paid and final reward is to be considered only upon actual realisation of the dues. So far as this actual realisation is concerned, if we accept the contention of the Revenue then the petitioner will not be in a position to get the benefit of the scheme. In para 32 the respondent has no. 1 stated as under:

"AAIFR has passed an order for depositing the dues of Rs 2.5 crores. In the year 2003-2004, three refund claims amounting to Rs 2.29 crores were sanctioned to M/s JKSL (namely the person against whom the information was conveyed by the petitioner) but were not paid in cash to them; they were adjusted towards recovery of dues. It is submitted that the process of launching prosecution against M/s JKSL was initiated in 1997 after the matter was decided in favor of revenue. By that time the unit had closed and the relevant information in respect of the then CMD, MD and Directors was not readily available with the Department. This information has now been collected and prosecution will be launched after obtaining legal opinion."

5. From this, it is very clear that the Revenue has, in fact, recovered the amount by way of adjustment of Rs. 2.29 crores. Thus, it is very clear that the Revenue has actually realised the amount. It is not necessary that the amount must be recovered in cash from a party against whom the information is given. In the instant case, on the basis of information, the proceedings commenced. If the information would not have been conveyed by the petitioner, there was no question of adjustment of the recovery of the amount or any recovery. It is in view of this, that it would not be correct to-say that they have not realised the amount and, therefore, they are not required to make the payment. As they have realised, it is their bounden duty to pay the amount according to the rules. By adjusting, JKSL is deprived of the amount adjusted and the amount is thus recovered towards the dues.

6. In the backdrop of admissions made in the affidavit filed by the Respondents, surprisingly, on behalf of the UOI, namely, DGRI, a submission is made that in view of the Supreme Court Judgment in the case of Union of India v C. Krishna Reddy (Civil Appeal No. 7127 of 1999 decided on 18.12.2003), this court cannot issue a writ in a matter like this. Learned counsel submitted that the Supreme Court has pointed out as under:

"The High Court in writ jurisdiction cannot examine or weigh the various factors which have to be taken into consideration while deciding a claim regarding grant of refund. These are matters exclusively within the domain of the authorities of the Department as they alone can weigh and examine the usefulness or otherwise of the information given by the informer."

However, it is interesting to note that the Supreme Court also pointed out as under ;

"In the writ petition filed by the respondent, no details had been given on the relevant issues. If the grant of reward cannot be claimed as a matter of right it is not understandable as to how a Writ of Mandamus can be issued commanding the Government to give a particular amount by way of reward."

7. It may be noted that in that matter the contention of Union of India is set out in para 7 wherein it is stated that no Writ of Mandamus can be issued by the court to direct payment of a quantified amount by way of reward.

8. The facts of the case before the Supreme Court are required to be considered at this stage. In para 4, the court pointed out that nowhere it was admitted by the department that on the basis of information conveyed by the informant, it conducted the investigation in the matter of import of machines and availing of exemption notification against whom the proceedings were initiated which resulted in recovery. Therefore, in that case, the department took action independently of the information submitted by the informer. The court pointed out in this context as under:

"Therefore the main ground for claiming the reward had not been admitted. The writ petitioner did not substantiate his claim in any manner that it was only on the basis of the information supplied by him that the proceedings had been commenced by the department which ultimately led to passing of an order of confiscation, fine and penalty."

9. However, in the instant case the admission is that on the specific information supplied by the petitioner action was taken, the amount has been recovered and part of the reward has also been paid to the petitioner. It is also required to be noted that the Supreme Court considered its earlier decision in the case of Union of India v. R. Padmanabhan, 2003 JT (7) SC 196 where exactly the same question was examined and it was held that being ex-gratia no right accrued to any sum as such till it is determined and awarded and, in such cases, normally it should not only be in terms of the guidelines and policy, in force, as on the date of consideration and actual grant but has to be necessarily with reference to any indications contained in this regard in the scheme itself.

10. Therefore, following the scheme, the benefit is required to be given to the person concerned. In the present case, in the affidavit on behalf of the Respondent No. 1, it is admitted that the information conveyed by the petitioner led the recovery of amount. Yet, the respondents contend that this court should not interfere and that as the amount has not been realised in cash from the party concerned, they are not liable to make any payment. We have already indicated that by way of adjustment the Revenue has recovered the amount which otherwise was required to be recovered from the. person against whom the information was lodged by the petitioner and thus having realised the amount, it is totally unfair on the part of the Union of India to state that they will make the payment only after the amount is received in cash from the person against whom the information was lodged by the informer, namely, the petitioner.

11. We are not quantifying any sum but, we are directing the respondent to make the payment of the final reward amount in terms of the policy. The amount shall be paid within a period of 15 days from the date on which a copy of this order is produced by the petitioner with interest at the rate of 15% per annum failing which the amount shall be paid at the rate of 18% per annum and the additional 3% per annum shall be borne by the responsible officer who is not taking immediate action in the matter.

12. The petition is allowed to the aforesaid extent with costs which are quantified at Rs. 10,000/- which shall be deposited within a period of two weeks.