J.P. Juneja vs Uoi & Anr.
2011 Latest Caselaw 3995 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Date of decision: 17th August, 2011.

+                                W.P.(C) 2607/2010

%      J.P. JUNEJA                                           ...Petitioner
                          Through:      Ms Rekha Aggarwal, Adv.

                                     Versus

       UOI & ANR.                                            ..... Respondents
                          Through:      Mr. Saquib, Adv. with Ms. Vinitha
                                        Sekhar, Assistant Director, DRI.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.     Whether reporters of Local papers may        Not necessary
       be allowed to see the judgment?

2.     To be referred to the reporter or not?              Not necessary

3.     Whether the judgment should be reported             Not necessary
       in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petition has been filed seeking mandamus for payment of the

balance reward amount under the Grant of Rewards to Informers and

Government Servants Policy of the Ministry of Finance of the Government

of India.

2. The petitioner claims to have in the year 1994 given to Anti Evasion

Cell (Excise) information about the evasion of excise duty by one M/s

Digital World India Ltd., Bombay of almost `1.20 crores in the import of

printers against various bills of entry, by under-invoicing the goods. It is

further the case of the petitioner that the Anti Evasion Cell passed on this

information to the respondent no.2 Directorate of Revenue Intelligence

(DRI) and upon adjudication of the matter it was proved that the said M/s

Digital World India Ltd. had wrongly declared the correct value of the Dot

Matrix Printers and thereby evaded the custom duty of crores of rupees to

the prejudice of the Government Exchequer.

3. It is yet further the case of the petitioner that the respondent no.2 DRI

in the said proceedings collected `25 lacs from M/s Digital World India Ltd.

in the year 1994, `2,29,644/- in the year 1995 and a bond of ` 8,29,000/-

also in the year 1995.

4. The petitioner claims that under the Reward Policy aforesaid, the

petitioner received an advance reward of `2.50 lacs after the matter was

adjudicated in June 2000 and though was promised that the balance award

would be given to him after disposal of the appeal preferred by M/s Digital

World India Ltd. against the order of adjudication but the said award amount

has not been paid. The petitioner claims that owing to having given the

information aforesaid, he on the one hand lost his employment with M/s

Digital World India Ltd. and on the other hand had not been paid the award

amount also. The petitioner claims the balance award amount of

`21,90,000/- to be due to him.

5. The Award Policy of the year 1985 in force in the year 1994 when the

petitioner gave information of tax / duty evasion inter alia provided for:-

(i) The quantum of rewards to be upto 20% of duty evaded plus

20% of the fine and penalty levied/imposed and realized, provided the

amount does not exceed 20% of the market value of the goods

involved;

(ii) For the reward not being granted as a matter of routine and

being purely an ex-gratia payment not claimable by anyone as a

matter of right;

(iii) For the Authority competent to grant the reward to keep in

mind the specificity and accuracy of the information, the risk and

trouble undertaken, the extent and nature of the help rendered by the

informer, the difficulty in securing the information etc. as the factors

for determining the reward;

(iv) For the reward to be paid in stages, with 25% of the expected

final reward being paid after the issue of show cause notice provided

the authority competent to sanction the reward was satisfied that there

is reasonable chance of evasion being established in adjudication and

sustained in appeal/revisional proceedings, with another 25% being

payable after adjudication and the remaining 50% being payable only

after conclusion of the appeal/revision proceedings resulting in

upholding of the demand/penalties etc.

6. The Reward Policy of the year 1985 (supra) was superseded by the

Reward Policy of the year 2001. The Reward Policy of the year 2001

provided for reward upto 20% of recovery of evaded duty plus fine/penalty

imposed and recovered. The 2001 Policy also provided for "no advance /

interim reward" to be granted "normally" and for 25% of the voluntary

deposits made by the evader to be considered for payment as

advance/interim reward after the issuance of show cause notice provided the

authority competent to sanction reward is satisfied that there is reasonable

chance of recovery of the balance. The said Policy provides for payment of

the final reward only after recovery of the evaded duty.

7. This petition was preferred treating the petitioner to be entitled to the

reward in accordance with the 1985 Reward Policy (supra) whereunder

reward was not dependent upon recovery. It is not in dispute that the

adjudication proceedings/appeals etc. in the present case stand concluded in

the year 2007.

8. The petition came up before this Court on 20th April, 2010 when the

counsel for the respondents appearing on advance notice invited attention to

Union of India Vs. C. Krishna Reddy (2003) 12 SCC 627 laying down that

the guidelines/policy as in force on the date of consideration for grant of

reward would apply and not the guidelines/policy on the date of furnishing

information. It was further held that absolute discretion having been

conferred on the authority under the guidelines to grant reward having

regard to the various factors set out in the guidelines/policy, the reward

cannot be claimed by way of right and the High Court cannot issue writ of

mandamus compelling payment of the reward.

9. The petitioner after studying the aforesaid judgment filed an

additional affidavit stating that the petitioner was entitled to be paid at least

25% of the amount of `25 lacs plus `2.30 lacs deposited by the tax evader as

well as 25% of the bond for `8.29 lacs furnished by the tax evader. The

petitioner thus claimed to be entitled to approximately `8 lacs in accordance

with the 2001 Policy and the aforesaid judgment also and contended that he

had been deprived of the said amount for 16 years.

10. Notice of the petition was issued on 16th July, 2010 limited to the

aforesaid claim of the petitioner for `8 lacs only out of which `2.50 lacs

have been paid as aforesaid.

11. The respondents in their counter affidavit have further relied upon the

clarification dated 23rd August, 2002 to the effect that "25% of the voluntary

deposit" in the 2001 Policy aforesaid is to be read as "25% of the admissible

reward". The respondents in their counter affidavit have admitted voluntary

payment of `25 lacs plus `2,29,644/- by the tax evader M/s Digital World

India Ltd. and have further stated that though duty amount of `1,21,90,163/-

was demanded and the said demand confirmed and penalty of `30 lacs and

`10 lacs imposed but in appeal preferred, conditional stay subject to

payment of pre-deposit of `5 lacs was granted and which amount was

deposited; that the matter was remanded to the Adjudicating Authority and

though pursuant to remand the demand of `1,21,90,163/- and fine of

`67,97,000/- and `30 lacs imposed but the amount has not been recovered.

It is thus stated that till date only a sum of `32,29,444/- including pre-

deposit aforesaid has been recovered and the balance amount is outstanding

and the petitioner has already received more than due amount of 25% of the

admissible reward. It is stated that the final reward can be sanctioned only

after recovery of the entire amount and which has not been received as yet.

12. Though on a reading of the counter affidavit it appears that according

to the respondents reward due has already been paid but an additional

affidavit has been filed by the respondents stating that the total amount

recovered as on 18th July, 2011 from M/s Digital World India Ltd. is

`40,58,664/-; that though the rules prescribed a ceiling limit of 20% of the

actual recovery but the quantum of the reward due cannot be indicated at this

stage as it is the discretion of the Reward Committee to decide the quantum

of the reward; that the maximum permissible amount as per the prescribed

limit of 20% of `40,58,664/- is `8,11,729/- out of which `2.50 lacs has

already been paid; it is further stated that the claim of the petitioner is pre-

mature.

13. The counsels have been heard.

14. I am of the opinion that the petitioner in the present case cannot be

made to wait endlessly. The decision as to whether the reward to the

petitioner should be the maximum i.e. 20% of the recovery or anything less

than that so as to decide the amount to which the petitioner is entitled as of

today on the basis of the present recovery of `40,58,664/- ought to be taken

now. In the event of further recovery being made, decision on the basis

thereof can be taken subsequently. The Apex court in C. Krishna Reddy

(supra) was not concerned with the aspect of payment of reward amount

relatable to recovered amount.

15. The writ petition is therefore allowed to the extent of directing the

respondents to within eight weeks of today, take a decision and

communicate the same to the petitioner, as to the reward due to the

petitioner on the basis of the recoveries made till now and to pay the said

reward after adjustment of amount paid, to the petitioner within four weeks

thereafter, failing which the respondents shall be liable to pay interest for the

delay at the rate of 10% per annum from the expiry of twelve weeks from

today and till the date of payment. The respondents are further directed to,

from time to time, on the basis of the recoveries made, decide on the further

reward amount if any due to the petitioner and to pay the same to the

petitioner.

16. The respondents to also pay costs of `10,000/- of this petition to the

petitioner.

RAJIV SAHAI ENDLAW (JUDGE) AUGUST 17, 2011 bs (corrected and released on 29th August, 2011)