Published on: 28 January 2023 at 17:58 IST
Without mincing any words while fully acknowledging the tremendous risks that informers undertake in order to give secret information to authorities, the Bombay High Court has in a remarkable, rational, robust and recent oral judgment titled Jayashree Chandrakant Dhavre vs Union of India in Writ Petition No. 1529 of 2021 in exercise of ordinary original civil jurisdiction pronounced just recently on January 5, 2023 acknowledged candidly that informers take huge risks to furnish important information to the authorities and that the authorities should reward them accordingly as per government policy.
It must be noted that in the case at hand, a Division Bench comprising of Hon’ble Mr Justice Nitin Jamdar and Hon’ble Mr Justice Abhay Ahuja ordered the custom authorities to pay the reward payable under a 2015 policy to the widow of an informer who had given a tip about the smuggling of diamonds worth Rs 90 lakhs by a jeweller in Mumbai, way back in 1991.
It must be mentioned here that the Judges were seized of a plea that had been filed by the widow of the informer who had sought the final reward as per the Guidelines for grant of reward to Informers and Government Servants, 2015, that had been framed by the Central Board of Excise and Customs (Anti-Smuggling Unit) issued on July 30, 2015.
Needless to say, the Division Bench concluded that the women’s claim is meritorious. The Division Bench in its order held that, “We find that this is a fit case where the interference of the Court is necessary. In the facts of this case, non-intervention by us in the writ jurisdiction would amount to a failure of justice.” So it was but natural that the Court proceeded to direct the authorities to decide on the final reward to be paid as per the 2015 policy.
Most commendably, the Bench was unequivocal in maintaining that, “Though there is no legal right to demand a reward, as stated in the policy, the rejection must not be arbitrary, and the approach should not be such that it discourages the Informers from coming forward. Ultimately, the objective of offering a reward to the Informer is to aid the department in taking measures to safeguard the public exchequer. The Informers take enormous risks in providing information.”
Quite forcefully, the woman while seeking relief contended that prior to his death in 2010, her husband had been following up with the authorities for the final reward that was payable for his 1992 tip to the customs authorities.
The Court was apprised that the informer had received an interim policy of Rs 3 lakh as per the policy. It was also apprised that the informer had lost his eye sight in an accident in 1992.
Lamentably, the authorities disputed the identity of her husband as the informer who had given the secret information which led to the seizure of the diamonds imported from abroad!
While terming this stance as being arbitrary, the petitioner-widow was at pains to point out that the authorities had already paid interim rewards to her husband without disputing his identity.
While expressing concurrence with her contentions, the Court was unequivocal in holding that, “Once the authorities have accepted that reward at the interim stage was paid to Chandrakant and that the Petitioner has established that she is the legal heir of Chandrakant, then withholding the final reward is entirely arbitrary.” Very rightly so!
At the very outset, this brief, brilliant, bold and balanced judgment authored by Hon’ble Mr Justice Nitin Jamdar for a Division Bench of the Bombay High Court comprising of himself and Hon’ble Mr Justice Abhay Ahuja sets the ball rolling by first and foremost putting forth in para 2 that, “The Petitioner is the wife of deceased Informer who provided specific information to the office of the Marine and Preventive Wing of the Mumbai Commissionerate of Customs which led to seizure of smuggled goods,”.
“The Petitioner is before us with a grievance that the reward which is given to the Informers as per the policy is unjustifiably withheld.”
Notably, the Bench then aptly observes in para 3 that, “The Central Board of Excise and Customs (Anti-Smuggling Unit) issued Circular No. 20/2015 on 31 July 2015 titled “Guidelines for grant of reward to Informers and Government Servants, 2015”. At the title suggests these guidelines are applicable to the grant of reward to Informers and Government Servants in respect of cases of seizure made out/or infringements/evasion of duty/service tax etc., detected under the Customs Act, 1962 and others,”.
“Part-I of the Circular deals with the principles governing the grant of reward. The reward to be given under this policy is an ex-gratia payment, subject to conditions and it is not to be claimed as a matter of right. We will refer to the clauses as applicable to the Informers.”
It would be quite instructive to note that the Bench then reveals succinctly in para 4 that, “Clause 3.3 of the Circular of 2015 lays down criteria for the grant of reward. Under clause 3.3.1, it is stated that in cases of collection of information/intelligence in respect of seizure made out/or infringements/evasion of duty/service tax etc., various factors have to be considered, such as the specificity and accuracy of the information, the risk and trouble undertaken by the Informer, and the extent and nature of the help rendered by the Informer. Clause 5 deals with the quantum and ceiling of rewards,”.
“As per clause 5.1.1, the Informers are eligible to reward up to 20% of the net sale proceeds of the contraband seized. Clause 6 contemplates payment of advance/interim reward. Under clause 6.1, advance/interim reward may be paid to the Informers up to 50% of the total admissible reward immediately on seizure in respect of the gold/silver bullion, arms and ammunition, and explosives,”.
“The payment of the final reward is referred to under clause 7 of the Circular. The final reward is to be sanctioned and disbursed after the conclusion of adjudication/appeal/revision proceedings and closure of proceedings,”.
“Clause 7.2 incorporates the time limit to sanction the final reward, stating that as an incentive to improve compliance, it is desirable that the procedure should be followed to release the final reward immediately after the conclusion of the proceedings,”.
“As regards the identity of the Informer, additional information is to be kept as per clause 11.2 with a left thumb impression to reduce delay in disbursal of reward. Additional information is not considered mandatory for the grant of reward to the Informer, and no reward shall be withheld for non-furnishing of additional information,”.
“As per clause 3.4, in the event of the death of the Informer, the authority competent may grant a reward to legal heirs or nominees of an Informer of an amount not exceeding the amount that would have been paid to the Informer if he was alive. These in short are the relevant clauses of the Circular No. 20/2015 governing the grant of rewards to the Informers.”
To put things in perspective, the Division Bench then envisages in para 5 that, “It is the Petitioner’s case that her husband – Chandrakant, furnished a specific information in writing regarding the import and storage of the smuggled diamonds in respect of Business entity (referred to as the Jewellers) in 1991,”.
“Though generally name of the Informer is not disclosed, we have referred to the Petitioner’s husband by name as he is now no more and the information was given almost 32 years ago, and the dispute raised is about the identity.”
While elaborating more, the Division Bench lays bare in para 6 that, “An information was delivered in writing to Mr.Daya Shankar, the then Assistant Commissioner of Customs (P), Marine and Preventive Wing of the Custom Commissionerate, on 21 March 1991,”.
“The information was kept in a sealed cover with the Additional Commissioner of Customs. Based on information supplied regarding the storage of the smuggled goods, the premises of the Jewellers were searched in March 1991 and rough diamonds worth Rs. 3.21 lakhs and polished diamonds worth Rs. 84.47 lakhs were recovered,”.
“The Jewellers could not offer a satisfactory explanation regarding the legality of the import and storage of the diamonds. Statements of the witnesses were recorded and a show cause notice was issued to the Jewellers and the others proposing confiscation of the diamonds under section 111 (d) of the Act of 1962 and for the imposition of duty, penalty and redemption fine.”
It cannot be just glossed over that the Division Bench most emphatically concedes in para 17 that, “It is not in dispute that the information was received which led to the successful seizure of the smuggled goods,”.
“The Informer for this seizure was therefore entitled to final reward. It is not the case of the Respondents that there is some other person entitled to final reward. Most importantly, two interim rewards have been released. They are obviously released after establishing the identity of the Informer,”.
“No explanation is being offered on this count. Except for disputing the Informer’s identity, the Respondents have not positively stated that the interim reward was released to some other person and not the Petitioner’s husband- Chandrakant,”.
“The Petitioner has given a reasonable explanation for variances in the signature of her husband on the receipt and subsequent signature that her husband had lost his eyesight due to an accident,”.
“These facts mentioned in the representation of the Petitioner’s husband as far back as 2006, and it is not story created now. As stated earlier, from 2006 onwards, no doubt has ever been raised that the Petitioner’s husband was never an Informer. There was either no response or a categorical assertion regarding Chandrakant’s identity as the Informer.”
Most forthrightly, the Division Bench then notes in para 18 that, “Pertinently, in the affidavit in reply, Mr. Rajesh Sanan, Principal Commissioner of Customs (Preventive) in para 9 and 10 of the same while referring para 5 and 6, has stated as under:
“9. With reference to paragraph No. 5, I state that an advance reward of Rs. 1,00,000/- was given on 23.02.1993 by the Collector of Customs (P) and the same was disbursed to Chandrakant Dhavre on 09.04.1993.
10. With reference to paragraph No.6, I state that an additional amount of Rs. 2 Lakhs was sanctioned by the Commissioner of Customs (P) as the second stage reward on 16.08.1999 and paid to Chandrakant Dhavre on 20.08.1999”.
Once the deponent has accepted that reward at the interim stage was paid to Chandrakant and that the Petitioner has established that she is the legal heir of Chandrakant, then withholding the final reward is entirely arbitrary.
Even keeping aside the above two statements made in the affidavit, considering the totality of the circumstances and that nothing is placed before us that there was some other Informer and not Chandrakant who received the interim reward in respect of the concerned case, we find that the claim of the Petitioner could not have been rejected on the ground of identity. We have noted that the signature on the receipt of interim reward tallies with the name- Chandrakant. The handwriting expert has expressed no opinion.”
Most significantly, the Division Bench then holds in para 19 that, “The policy under the Circular of 2015, postulates rewards for information. Clause 7.2, which postulates the time limit to sanction the final reward, emphasizes that it is desirable that immediately upon conclusion of the adjudication, the final reward be released as an intensive to improve compliance,”.
“Though there is no legal right to demand a reward, as stated in the policy, the rejection must not be arbitrary, and the approach should not be such that it discourages the Informers from coming forward,”.
“Ultimately, the objective of offering a reward to the Informer is to aid the department in taking measures to safeguard the public exchequer. The Informers take enormous risks in providing information,”.
“Unfortunately, in this case the Respondents have taken a rigid stand, when the correct approach would have been to go by broad probabilities of the case, the peculiar circumstances of the case and the hardship of the Petitioner and should have handled this case with sensitivity,”.
“Having concluded that the Petitioner’s claim is meritorious, we find that this is a fit case where the interference of the Court is necessary. In the facts of this case, non-intervention by us in the writ jurisdiction would amount to a failure of justice.”
As a corollary, the Division Bench then directs in para 20 that, “Accordingly, we direct that the Respondents will treat the claim of the Petitioner’s husband – Chandrakant as eligible for the grant of final reward in respect of the concerned case and process the Petitioner’s claim as his legal heir,”.
“As regards the exact amount to be paid, we leave the quantification to the Respondents-Authorities to be made as per the Policy. This exercise be carried out within ten weeks from today and the amount so determined be paid to the Petitioner within twelve weeks from today.”
Finally, the Division Bench then concludes by holding in para 21 that, “Rule is made absolute in the above terms. No order as to costs.”
All told, we thus see that the Bombay High Court has made it indubitably clear in conceding that informers take enormous risks to give secret information to authorities. The Division Bench also made it crystal clear that the informers should be rewarded as per policy as discussed hereinabove. There can be just no denying it!
Sanjeev Sirohi, Advocate