RAJENDRA BABU, J. - (1.) THE appellant, Union of India, which lost before the learned single judge in O.P. no.12775 of 1991 and before the Division Bench of the Kerala High Court in W.A. no. 1077 of 1994, has filed this appeal.
(2.) THE respondent, an IPS officer, who, at the relevant point of time, was serving as the DIG of police, northern range, Kozhikode, which comprised in his area of operation revenue districts of Kasargode, Cannanore, Kozhikode, Palakkad, Wayanad and Malappuram. THE appellant-government not only authorized the State police authorities to effect seizure and investigation of cases under the Central Excise and Salt Act, Customs Act, Gold Control Order and Foreign Exchange Regulation Act, to prevent smuggling of gold and other articles through the coastal areas of Kerala, as well as in other parts of the country but with a view to create an incentive generally in the matter of detection of such violations, proposed to grant awards to those responsible to assist the government in the same by being informants as well as government servants and issued guidelines therefore in the notification dated 30.3.1985; this was said to have been followed by certain amendments in the matter of ceiling imposed, as to the quantum, by notification dated 13.4.1989. THE respondent, claimed to have an informant in the matter in question, worked out the information, supervised and executed an operation, which resulted in the seizure of 900 gold biscuits valued approximately at Rs.3.5 crores, which were concealed in a house. He also was said to have monitored the operation after seizure and on the basis of the action taken by the authorities of the customs department thereon it was possible for the said authorities to seize another 1600 gold biscuits from Irikkur in Cannanore district. A reward of Rs. 11.28 lacs was said to have been sanctioned to 163 officers of customs as well as police department. While so, though the claim of the respondent was also considered as one responsible for the subject seizure, no sanction was made in his favour for the reason that he was holding a rank considered higher than that of assistant collector/assistant director and consequently held not eligible for the reward in terms of clause 7.1 of the notification dated 30.3.1985. After finding not successful in his representation to the higher authorities, as well in the government of India, O.P. no.12775 of 1991 was filed in the High Court, under Article 226 of the Constitution of India, to quash the proceedings rejecting his claim and consequently direct the appellant to sanction and pay the reward to the respondent herein, in accordance with the scales mentioned and declare that he was entitled to the reward on the basis o.f the guidelines indicated. Overruling the objections of the appellant arraigned as respondent before the High Court, the learned single judge, by his order dated 19.7.1994, directed the department to consider the claims of the respondent herein on merits and fix the quantum of reward taking into account the role played in the operations. The learned judge was of the view that the exclusionary rule in clause 7.2 of the guidelines was intended to exclude, if at all, only the officers above the level mentioned in the departments specified, from being rewarded on the basis of the value of the seizure and not others. As for the amendment issued in April 1989, limiting the total reward to Rs. 1 lac per seizure and a total limit of Rs.10 lacs in one's career, the High Court was of the view that the seizure in the case having been made on 24.12.1989, cannot have retrospective effect and, therefore, not relevant. Aggrieved, the appellant pursued the matter on appeal in W.A. no. 1077 of 1994 and the Division Bench also confirmed the order of the learned single judge and directed the appellant to grant the reward to the respondent after fixing the quantum in accordance with exhibition P-1 within two months from the date of receipt of the copy of the order and that on failing to do so or paying the same within a month from the date of its order, the amount shall carry interest at 15% from the date of its due till payment. Hence, this appeal.
(3.) THE learned additional solicitor general appearing for the appellant contended that being a pure ex gratia payment, it should be strictly in accordance with the stipulations contained in the order itself and if the claimant, in any case, does not satisfy the stipulations therein, the department not only can, in appropriate cases, consider such claims for any lump sum reward but not at the rates specified to the eligible class or category of claimants, on the basis of the value of seized goods. It was also urged that departmental officers of other departments such as police, B.S.F. and coast guards etc. are envisaged under the guidelines for being granted such rewards subject to the restrictions in Clause 7-1 and the directions issued to the contrary cannot be justified in law and being a matter pertaining to the sphere of policy, it cannot be modulated, modified or restructured so as to affect the very basis of the orders of the government. THE provisions contained in the amendment made on 13.4.89 was also urged to apply to the case. THE learned senior counsel for the respondent, while adopting the reasoning of the High Court, reiterated that the construction placed by the High Court and the reasons assigned therefore are not only reasonable but constitute just and reasonable method of implementation keeping into account the avowed purpose and object underlying the very scheme and consequently, no interference is called for. We have carefully considered the submissions of the learned counsel appearing on either side. It is not only useful but necessary to advert to the relevant portions of the notification dated 30.3.1985 laying down the guidelines for the reward, since the High Court, learned single judge and the Division Bench, seem to have dealt with the claims of parties purely on the basis of Clause 7 without noticing the other relevant and essential provisions, apparently and may be on account of the fact that their attention was not properly drawn by the appellant-government, at that point of time. The relevant portions of the guidelines, necessary for appreciating the contentions on either side, are as hereunder:- "The government have reviewed the existing policy, procedure and orders in respect of grant of rewards to informers and government servants in case of seizures made, infringement or evasion on duty, etc., detected under the provisions of the following Acts:- i) The Customs Act, 1962 ii) The Central Excise and Salt Act, 1944 iii) The Gold Control Act, 1968 iv) The Foreign Exchange Regulation Act, 1973 2 As a result, the revised guidelines are laid down in the succeeding paras, All provisions/guidelines issued on the subject may be deemed to be modified to the extent indicated therein. 1.1 QUANTUM OF REWARDS Seizures of contraband under the Customs Act 3.1.1 Informers and government servants will be eligible for rewards upto 20% of the estimated market value of the contraband goods seized. In respect of gold silver, opium and other narcotic drugs etc., the overall ceilings for rewards (based on broadly 20% of the value of these items, as reckoned by the government for the present) are shown in the annex. These would be subject to periodically revision in the light of price fluctuations about which timely intimations should be sent to DGRI every quarter to enable him to recommend appropriate revision as and when warranted, to the ministry 3.2.................................................... 3.2.1 Informers and government servants will be eligible for reward upto 20% of the duty, if any, sought to be 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. 3.3 Seizures made, evasion of duty and other infringement detected under the Central Excise and Salt Act. 3.3.1................................................... 3.4 Seizures under the Gold Control Act and cases of other violations detected under the Gold Control Act. 3.4.1 In case of seizures of gold bullion, the over all ceiling for rewards to informers and government servants will be as indicated in serial no.1 of the annex. 3.4.2 In other cases, whether of seizure of articles of gold/ornaments, or of detection of "shortages", informers and government servants will be eligible for reward upto 20% of the redemption fined and/or penalty imposed and realized, provided the amount does not exceed 20% of the market price of the goods involved. 3.5 Cases of seizures/violations detected under FERA 3.5.1................................................... 4. REWARD SHOULD NOT BE GRANTED AS A MATTER OF ROUTINE. 4.1 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 rewards which may be granted, the authority competent to grant reward will keep 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 association, etc.; the risk involved for the government servants in working out the case, the difficulty in accruing the information, the extent to which the vigilance on the staff led to the seizures, 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 apprehended or not. 4.2 To government servants, rewards may ordinarily be paid upto 10% of the estimated market value of the goods involved (half of the maximum rewards indicated in respect of gold, opium and other narcotic drugs, etc. in the annex.). Rewards in excess of this limit, but not exceeding 20% (or as in annex., in respect of gold, silver narcotics, etc.) of the said value, maybe considered in cases where the government servant has exposed himself to a great per sonal hazard or displayed exemplary courage, commendable initiative, ingenuity or his personal efforts have been mainly responsible for the detection of the goods. 5. STAGE OF PAYMENT OF REWARD Payment of advance rewards 5.1 Advance reward may be paid to informers and government servants upto 50% of the expected final reward immediately on seizure in respect of the following categories of goods, namely:- a) gold/silver bullion and goods which are notified or specified under the Customs Act, 1962; b) arms and ammunition, explosives; c) opium and other narcotic drugs; d) goods not declared which are seized in the customs area or customs waters; and e) freely convertible foreign exchange in the form of currency notes. 5.2 In other ("smuggling") cases of seizures of contraband goods, advance reward upto 25% of the expected final reward may be paid immediately after seizure, if the authority competent to sanction reward is satisfied that the goods seized are reasonably expected to be confiscated on adjudication and the order is likely to be sustained in appeal/revision proceedings. 5.3 In all other cases, whether of seizure of evasion/infringement detected on the basis of documents, 25% of the expected final reward may be paid after the issue of a show cause notice provided the authority competent to sanction reward is satisfied that there is reasonable chance of confiscability/infringement/evasion, as the case may be, being established in adjudication and sustained in appeal/revisionary proceedings. 5.4 In exceptional cases, the heads of departments may, having regard to the value of the seizures effected and magnitude of the evasion or infringement detected and magnitude of the evasion or infringement detected and special efforts or ingenuity displayed by the officers concerned, sanction and announce the grant of suitable rewards on the spot to be adjusted against the advance reward that may be sanctioned. 6. Final rewards will be paid after adjusting the advance rewards, if any, paid in the mentioned/indicated in proceeding paras. 6.2 In respect of the goods described in para 5.1, the remaining 50% of the reward will be sanctioned both to the informers and government servants on adjudication of the case resulting in confiscation of the goods. If, however, the party concerned delays adjudication proceedings by contesting the imposition of penalty only but the confiscation of the goods, the final reward may be sanctioned even prior to the conclusion of the adjudication proceedings. 6.3 In all other cases, 25% of the expected final reward may be paid after adjudication resulting in confiscation and/or confirmation of the demand, infringement and the remaining 50% may be paid after the conclusion of the appeal/revision proceedings by the appropriate authorities (such as Tribunal, FERA Board, etc.) resulting in the upholding of confiscation, demand, fine penalties, etc. imposed under the respective Acts. 7. TO WHOM REWARD MAY BE PAID 7.1 Ordinarily, informers and government servants (upto the level of group 'A' superintendents/assistant collectors of customs and central excise/assistant directors will be eligible for reward depending on the contribution made by them as a team as well as individually with regard to the collection of intelligence, surveillance, effecting of seizure etc. Due credit should be given to the staff employed on investigation. 7.2 Group 'A' officers above the level of assistant collector/assistant director will not be eligible for reward on the basis of value of the seizures, etc. However, in appropriate cases, government may consider, in consultation with CCA/DGRI director, anti-evasion, the grant of lump-sum payment/advance increments and/or recognitions, in any other manner of the services rendered by them for which purpose the heads of department should forward their recommendation to the aforementioned officers with a copy to the ministry. 8....................................................... 8.1.1................................................... 8.1.2...................................................... 8.1.3 All case of grant of reward to government servants in excess of the limits specified above should be examined and approved by a Committee consisting of the following :- JUDGEMENT_196_JT7_2003Html1.htm ;