Court remits case to Reward Committee for review of rewards citing inconsistencies

The court remitted the case back to the Reward Committee to reconsider the rewards awarded, citing inconsistencies and arbitrariness in their decisions. The court clarified that the reward is an ex gratia payment, not a legal right, and directed the Committee to independently review the reward percentages. The petitioner was granted the opportunity to submit a written representation, emphasizing the need for a prompt resolution without expressing any opinion on an enhanced reward. The writ petition was disposed of without costs.

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Issues Involved:
1. Quantum of reward payable to the petitioner.
2. Entitlement to reward on penalty and fine amounts.
3. Consistency and arbitrariness in the decisions of the Reward Committee.
4. Legal right to claim reward and the nature of such reward.

Detailed Analysis:

Quantum of Reward Payable to the Petitioner:
The petitioner contested the quantum of the reward released to him, arguing that he was initially sanctioned a reward at 20% of the customs duty but later received reduced percentages on the penalty and fine amounts. The petitioner sought a directive for the respondents to pay the reward at 20% on the entire duty, including penalty and fine.

Entitlement to Reward on Penalty and Fine Amounts:
The respondents, including the Director General of Revenue Intelligence and Investigation, Chairman, Central Board of Excise and Customs, and Union of India, did not dispute the levied and recovered duty and penalty amounts. The Reward Committee's decisions varied on the reward percentages for penalty and fine amounts, ranging from 15% to 8.28%. The Reward Committee initially awarded rewards close to the maximum permissible rate on the principal amount of customs duty but awarded lower percentages on penalty and fine amounts.

Consistency and Arbitrariness in the Decisions of the Reward Committee:
The Reward Committee's decisions exhibited inconsistencies and arbitrariness, particularly in the minutes dated 26th March 2009 and 10th March 2010. The Committee initially decided to pay 15% on future realizations of the penalty amount but later reduced the reward percentages to 8.33% and 8.28%, citing the generic nature of the information provided by the petitioner. This inconsistency was noted as an error in the decision-making process.

Legal Right to Claim Reward and the Nature of Such Reward:
The court reiterated that the reward is an ex gratia payment and not a matter of right. The Reward Committee has the discretion to determine the reward based on various factors, including the specificity and accuracy of the information, the risk and trouble undertaken, and the extent of help rendered by the informer. The Supreme Court in earlier cases (Union of India vs. C. Krishna Reddy and Union of India vs. R. Padmanabhan) held that no vested right exists to claim a reward, and it is an ex gratia payment subject to the guidelines of the competent authority.

Court's Directives:
1. The court remitted the case back to the Reward Committee to reconsider the rewards awarded in the meetings dated 26th March 2009 and 10th March 2010.
2. The court clarified that the percentage and extent of reward for the principal amount (customs duty) and the penalty/fine amount could vary and need not be the same.
3. The Reward Committee was directed to independently apply their mind without being bound by the findings of the meeting dated 6th November 2007.
4. The petitioner was allowed to make a written representation to the Reward Committee within three weeks.
5. The court expressed hope for an expeditious resolution by the Reward Committee and did not express any opinion on the entitlement to an enhanced reward.

The writ petition was disposed of with no costs.

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