JUDGMENT
T.S. Thakur, J.
Page 2511
1. In this petition, under Sections 11 & 12 of the Contempt of Courts Act, 1971, the petitioner alleges willful disobedience of the order passed by this Court in W.P(C). No. 7586/2003 and seeks directions to the respondents to re-quantify and pay to the petitioner with interest the amount of final reward due to him, in terms of the reward policy. The petition has been filed in the following circumstances:
2. The petitioner claims to have provided specific information in regard to evasion of duty by M/s. J.K. Synthetics Ltd. on certain imports made by the said company at Calcutta. It is not in dispute that the information furnished by the petitioner resulted in the discovery of evasion of duty by the company and a claim for payment of a reward to the former in terms of the reward rules/policy framed by the Government. Dissatisfied with the treatment given by the respondents to his claim for reward, the petitioner filed W.P(C). No. 7586/2003 in this Court for a mandamus, directing the respondents to grant a full and final reward of Rs. 68,27,522/-, claimed by him with interest. The writ petition was heard and disposed of by a Division Bench of this Court, comprising Hon’ble the Chief Justice and Badar Durrez Ahmed, J., in terms of a judgment, dated 20th April, 2004. The operative portion of the said order reads as under:
“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.
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.”
3. Aggrieved by the direction issued by this Court, the respondents preferred an appeal before the Supreme Court, which was partly allowed by their Lordships order dated 26th April, 2005. The Apex Court noted that the reward Committee had, in its meeting, held on 11th May, 2004, decided that the petitioner was entitled to a total reward of Rs. 9.5 Lacs. Their Lordships observed that to the extent the reward Committee had decided to pay a sum of Rs. 9.5 Lacs, the appellant could have no grievance. The Court however declined to go into the question whether payment of a sum of Rs. 9.5 Lacs was a sufficient compliance with the order passed by this Court. That issue was left open by their Lordships to be determined in the present contempt Page 2512 proceedings. The following passage from the order passed by the Supreme Court is, in this regard, apposite:
“We are not concerned with and do not go into the question whether the sum of Rs. 9.5 lakhs can be said to be in compliance of the impugned order. We are told that a Contempt Petition has been taken out in the High Court. It is for the High Court to decide whether there is any contempt. We clarify that dismissal of this appeal will, in on way, affect the contention of the parties in the Contempt Petition. This order will not mean that this Court has accepted that Rs. 9.5 lakhs was the compensation payable nor that this Court is accepting that a higher amount is payable.”
4. Having left the issue, regarding the total amount admissible to the petitioner open, their Lordships modified the order of this Court as regards the payment of interest on the amount of reward with the observation that any payment towards reward was, at the highest, an ex-gratia payment, in which the claimant had no vested right so as to justify award of interest on the same. The Court observed:
“However, considering the fact that it has been held by this Court in the cases of Union of India and Ors. v. C.Krishna Reddy, reported in 2003 (10) SCALE 1050 as well as in Union of India v. R. Padmanabhan and in the Reward Scheme that there is no vested right in the person to claim a reward and that the payment can, at the highest, be an ex-gratia payment, there is absolutely no justification to grant interest on such ex-gratia payment. We, therefore, set aside the portion of the High Court Order where the interest is directed to be paid as well as the portion awarding costs.”
5. In the above backdrop, when the present contempt petition came up before us for hearing on 16th August, 2005, it was argued by the petitioner that a representation made by him, pointing out certain flaws in the view taken by the reward Committee, was pending before the said Committee. Mr. Aggarwala, counsel for the respondents, acknowledged the receipt of the representation but submitted that the same could not be considered on account of pendency of the present contempt petition. It was, in that background that we adjourned the contempt petition for hearing with a direction that the Reward Committee shall consider and dispose of the representation of the petitioner, in the meantime.
6. The Reward Committee, in obedience to the above direction, considered the representation of the petitioner in its meeting on 13th September, 2005, and noted that a sum of Rs. 9.5 Lacs had already been sanctioned in favor of the petitioner which represented 20% of the recoveries made from the defaulting party. The Committee observed:
“The committee observed that as the maximum possible reward of Rs. 9.50 Lacs has been sanctioned and paid to the informer already on the basis of the recovery of Customs duty actually made, no further reward can be sanctioned to the informant.”
Page 2513
7. Appearing in person, the petitioner strenuously argued that the respondents were in contempt in as much as they had, contrary to the directions of this Court, denied to the petitioner the full amount of reward admissible to him under the policy/reward rules. He submitted that the respondents had, with a view to denying to the petitioner the benefit of an adequate reward admissible under the rules, adjusted the amounts payable by the assessed-M/s. J.K. Synthetics Ltd towards Central Excise dues instead of adjusting the same towards Customs duty. The extent of realisation of the outstanding dues towards Customs duty was thus artificially reduced by them only with the object of denying to the petitioner the payment legitimately due to him. It was urged that the petitioner had a recurring right to receive amounts towards reward from time to time depending upon the recoveries made by the respondents and that the reward amount had to be at the rate of 20% of such recoveries. Reliance was also placed by the petitioner upon a letter addressed by Minister of State for Finance (Revenue) to Sh. Lal Bihari Tiwari, Member of Parliament, pointing out that if any further recoveries are made further reward can be given to the petitioner. The petitioner urged that the respondents were estopped in law from contending that no further amount was payable to the petitioner. Reliance in support was placed upon the decisions of the Supreme Court in Surinder Nath Kapoor v. Union of India, 1989 Supp. (2) SCC 297 and Metroark Ltd. v. Commissioner of Central Excise, .
8. On behalf of the respondents, it was, per contra, argued by Mr. Aggarwala that the petitioner had no vested right to seek a reward and that an appropriate reward, keeping in view the nature of the information provided by the informant and other relevant factors could be sanctioned which would then be final as the informant had no statutory fundamental or legal right to demand any further amount.
9. The question whether the petitioner is entitled to any reward, on the basis of the information provided to him, stands concluded by the judgment of this Court in the writ petition filed by the petitioner as modified by their Lordships of the Supreme Court. That the information provided by the petitioner had resulted in detection of evasion of duty entitling the petitioner to claim a reward is evident from a plain reading of the order passed by this Court and that passed by the Supreme Court in appeal. It is also common ground that the respondents have examined the petitioner’s claim in terms of the rules/policy and already released a sum of Rs. 9.5 Lacs in his favor. The only question then is whether the said amount represents the full amount due to the petitioner or has to be followed by any further payment. This Court had, as noticed above, declined to quantify the amount of reward while directing the respondents to do the needful. Even the Supreme Court had declined to go into the question whether Rs. 9.50 Lacs represented the final amount payable to the petitioners in terms of the judgment of this Court and the reward rules. That issue was left to be determined in the present contempt proceedings. That is precisely the reason why this court will have to examine the scheme regarding the grant of reward though any such examination has to be limited to finding out whether the amount already paid to the petitioner can be treated as the final reward amount due to him.
Page 2514
10. The Reward Rules provide for rewards “up to 20%” of the amount of duty evaded. Rule 4.1 of the said Rules reads thus:
“4. QUANTUM AND CEILING OF REWARDS
4.1 Informers and Govt. servants will be eligible for reward up to 20% of the net sale-proceeds of the contraband goods seized and/or amount of duty evaded plus amount of fine and penalty levied/imposed and recovered. However, in respect of gold, silver, opium and other narcotic drugs etc. seized under the provisions of the Customs Act, 1962/Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, the overall ceiling of reward will be as per specific rates indicated in the Annexure. These ceilings would be subject to periodical revision in the light of the price fluctuations of these items, for which periodical intimations may be sent to the DGRI/DGNCB, who, in turn, will send suitable recommendations to the Ministry, for appropriate revision, as and when warranted.
11. The use of the term “up to 20%” clearly means that the reward need not in all cases be 20% of the duty evaded. It can be any amount subject to the outer limit of 20% of the duty evaded. Rule 5 of the Rules forbids grant of reward as a matter of routine. It reads:
“5. REWARD SHOULD NOT BE GRANTED AS A MATTER OF ROUTINE
5.1 Reward is purely an ex-gratia payment which, subject to guidelines, may be granted on the absolute discretion of the authority competent to grant rewards and cannot be claimed by anyone as a matter of right. In determining the reward which may be granted, the authority competent to grant reward will 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, whether information gives clues to persons involved in smuggling, or their associates etc., the risk involved for the Govt. servants in working out the case, the difficulty in securing the information, the extent to which the vigilance of the staff led to the seizure, special initiative, efforts and ingenuity displayed, etc. and whether, besides the seizure of contraband goods, the owners/organizers/financiers /racketeers as well as the carriers have been approached or not.
5.2. Reward should not be sanctioned for routine and normal nature of work.”
12. Rule 6 of the Rules provides for payment of Advance/Interim reward while Rule 7 provides for payment of final reward. Rule 7 may, at this stage, be extracted:
7. PAYMENT OF FINAL REWARD
7.1 Final rewards, both to officers as well as informers, should be sanctioned and disbursed only after conclusion of adjudication/appeal /revision proceedings. The final reward will be determined on the basis of the net sale proceeds of goods seized/confiscated (if any) and/or the amount of additional duty/fraudulently claimed Drawback recovered plus penalty/fine recovered, and the total reward admissible, i.e., advance and final reward put together, will not exceed the ceiling of 20% of the net Page 2515 sale proceeds (if any) plus amount of additional duty/fine/ penalty recovered or the amount of drawback fraudulently claimed recovered, as the case may be. This will be subject to instructions in para 4.3. above as regards rewards to Govt. Servants is concerned. The advance/interim reward sanctioned and disbursed, if any, shall be adjusted from the final reward to be paid to the officers/informers.”
13. We may at this stage refer to two decisions of the Supreme Court in which the Court has examined the scheme for payment of rewards and the nature of such payments. In Union of India v. R. Padmanabhan, , the High Court of Kerela had directed the respondents to consider the claim of the petitioner, who happened to be a police officer for grant of a reward in terms of the prevalent policy. In appeal preferred by the Union of India against the said direction, the Supreme Court held that reward under the Scheme was a purely ex gratia payment though the same could not be arbitrarily denied or refused. It was also held that being an ex gratia payment, no right accrues to any sum as such till it is determined and awarded. The Court observed:
“The rewards are also to be and can be “up to 20%” or as the case may be and not that invariably it must be as a rule 20% of the estimated market value. The reward is purely an ex gratia payment, subject to the Guidelines on the discretion of the competent authority though it cannot arbitrarily be denied or refused at whim or fancy and it should specifically conform to and must be shown to fall or be claimed within the four corners of the Scheme and not by any deviation or modulation of the Scheme, as the courts think, it should be and if it cannot come strictly within the four corners of it, such claim may have to be dealt with only under the residuary powers enabling the grant of reward. Moreover, being ex gratia, no right accrues 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 that regard in the Scheme itself. Therefore, the reward could not have been allowed in the present case completely ignoring the amendments, which came into force in April, 1989, merely because the seizure was in February, 1989.”
14. To the same effect is the decision of the Supreme Court in Union of India and Ors. v. C. Krishna Reddy, . That was a case where a single Judge of the Madras High Court had directed payment of reward to the respondent while determining his entitlement for further reward. The Division Bench has upheld that direction partly reducing the amount from Rs. 10 Lacs directed by the Single Judge to Rs. 5 Lacs. In a further appeal to the Supreme Court, their Lordships held that the authority competent to grant the reward had to take a decision regarding entitlement keeping many factors in mind. The High Court could not examine or weigh those factors which are exclusively Page 2516 within the domain of the Departmental authorities. The Court also declared that no one had a legal right to claim a reward particularly when the scheme itself showed that the payment was ex gratia and may be granted at the discretion of the competent authority. The Court further held that a mandamus could not be issued in the absence of a statutory duty, the performance of which the aggrieved party could enforce by a writ from the Court. The following passage summed-up the legal position in this regard:
“The scheme or the policy of the Government of India dated 30-3-1985 shows that the authority competent to grant the reward, while taking a decision regarding the entitlement of the person concerned has to keep many factors in his mind like specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues of the persons involved in smuggling or their associates, the difficulty in securing the information, the risk involved for the government servants in working out the case and whether apart from seizure of contraband goods, the owners/organisers/ financiers/racketeers have been apprehended. The scheme further mentions that reward is an ex gratia payment and subject to the guidelines and may be granted on the absolute discretion of the competent authority and further that no one can claim the reward as a matter of right. 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 reward. 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. 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. Though this specific plea was taken in paras 18 and 21 of the counter-affidavit, yet neither the learned Single Judge nor the Division Bench adverted to this aspect of the matter.
It is well settled by a catena of decisions of this Court that a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of the writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limit of their jurisdiction. Therefore, in order that a mandamus may issue to compel the authorities to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statue to enforce its performance. [See Bihar Eastern Gangetic Fishermen Coop. Society Ltd. v. Sipahi Singh, AIR para 15, Lekhraj Sathramdas Lalvani v. N.M. Shah, Dy. Custodian cum Managing Officer and Umakant Saran (Dr.) v. State of Bihar.]”
15. The direction issued by this Court in the writ petition filed by the petitioner has of necessity to be understood in the context of the above legal position. That is particularly so when the question is whether the amount of reward has or has not been properly quantified by the respondents. The respondents Page 2517 had a two-fold option available to them in that regard. The first was to determine a lump sum amount by way of reward taking into consideration the nature of the information and all other relevant facts and circumstances and either pay the same in lump or relate the payment to the realisation of duty from the defaulting party. The other option was to determine an appropriate percentage of the realisations which could not in terms of the policy be more than 20% and grant the same to the petitioner depending upon the recoveries made by them from time to time. No such decision appears to have been taken. What is mentioned is that a final reward representing 20% of the “amount realised” has been sanctioned in favor of the petitioner. That leaves the question, regarding future realisations and the petitioner’s entitlement on the basis of the same, open. It is not clear whether the respondents intend to sanction any further amounts in favor of the petitioner with further recoveries being made by them, nor is it clear whether the amount of Rs. 9.5 Lacs already sanctioned represents the total amount regardless of the percentage it makes vis-a-vis the realisations. That is an aspect which ought to have been addressed by the reward Committee to put an end to the confusion and avoid multiplicity of legal proceedings in the Court. If the reward Committee intends granting a reward on the basis of a percentage of the realisations made, it can say so in which event the petitioner may have to wait for realisations and seek redress as and when the amount due on that basis is withheld by the respondents. In case, however, the Committee determines in its wisdom a lump sum amount in full and final settlement of the claim for reward, it can do even that to give quietus to the controversy. In either case a decision that is clear as to the total quantum of the reward whether lump sump or by reference to percentage of realisations shall have to be taken. That decision is for the present not discernible from the record placed before us but the omission to take a decision does not appear to be either deliberate or contumacious so as to call for any action in contempt. The problem in our opinion lies more with the understanding of the purport of the orders passed by this Court than any willful neglect or defiance of the directions issued on the subject. It is therefore high time that the respondents take an appropriate decision on the subject to avoid any further procrastination of the matter.
16. In the result, we dispose of this petition with the following directions:
(i) The respondents shall quantify the amount payable to the petitioner in terms of the direction issued by this Court in W.P.(C). No. 7586/2003 and the observations made here-in-above within a period of six months from today;
(ii) In case, the respondents decide to grant any further amount to the petitioner by way of reward, the amount, so sanctioned, shall be released in his favor without undue delay not later than two months from the date of such determination; and
(iii) The final decision of the competent authority, taken in terms of the direction of this Court, issued in W.P.(C). No. 7586/2003 and those contained in this order, shall be communicated to the petitioner, who shall then have the liberty to seek appropriate redress in separate writ proceedings which the petitioner shall be free to file, if otherwise legally maintainable.
