Bombay High Court
Sanjay Dattattray MahimkarversusUnion of India
- Decided
- Disposal
- DISPOSED OFF
Holding
The Court directed the competent authority to reconsider and pay the advance/interim reward within four weeks, as the confiscation order has attained finality.
Summary
The petitioner, an informer, supplied information that led to the seizure of 10.95 kg of 24‑carat gold and foreign currency, for which an advance reward of Rs.6,00,000 was paid in 2018. The show‑cause notice was adjudicated in 2020, and the confiscation of the contraband has attained finality, though penalty proceedings are still pending. The petitioner sought the release of the final reward, invoking the 2015 Guidelines for Grant of Reward to Informers which allow advance/interim rewards of up to 50% for gold seizures and stipulate that final rewards are payable after adjudication concludes. The respondents argued that the petition was premature because the final reward can be paid only after all adjudication and appeal proceedings are closed. The Court held that, since the confiscation order is final and the guidelines permit an advance/interim reward in such circumstances, the petitioner should not be forced to wait for the pending penalty matters. Accordingly, the Court directed the competent reward‑sanctioning authority to reconsider and pay the advance/interim reward within four weeks, and allowed the petition.
Issues considered
- Whether the petitioner is entitled to the final/advance reward despite pending penalty proceedings.
- Whether the 2015 Guidelines permit payment of an advance/interim reward after the confiscation order has become final.
- Whether the petition is premature under the Guidelines.
Legislation cited
Subjects
- reward to informers
- customs seizure
- gold smuggling
- advance reward
- final reward
- ex‑gratia payment
- adjudication finality
- guidelines
Judgment
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ARJUN
MACHHINDRA IN THE HIGH COURT OF JUDICATURE AT BOMBAY
KADAM
ORDINARY ORIGINAL CIVIL JURISDICTION
Digitally signed by
ARJUN WRIT PETITION NO. 63 OF 2025
MACHHINDRA
KADAM
Date: 2026.08.18
19:23:29 +0530
Sanjay Dattattray Mahimkar … Petitioner
Versus
Union of India & Anr. ... Respondents
__________________________
Mr. Ashok Kumar Singh for the Petitioner.
Mr. Jitendra B. Mishra a/w. Ms. Sangeeta Yadav for the Respondents.
__________________________
CORAM : M. S. KARNIK AND
SANDESH D. PATIL, JJ.
DATED : 18th AUGUST, 2026.
ORAL ORDER (PER M. S. KARNIK, J.)
1. Heard learned counsel for the parties.
2. The petitioner by this petition prays for direction to the respondents
to release/disburse final reward to the petitioner.
3. The facts of the case are that the petitioner provided specific
information about import of gold weighing 25 kg by concealing the same
in an import cargo declared to be ‘Building Material’ imported in the name
of M/s. Shankar Enterprises, Devidham Nagar, Yadav Nagar, Airoli, Thane.
On 26th December, 2017, the said information was recorded in writing by
the Intelligence Officer of the respondent No.2 and after verifying the
genuineness and facts with regard to the said information, the cargo was
intercepted on 26th December, 2017 whereby a total 10950 Grams of
metallic washers to be gold of purity viz. 24 Carat valued at Rs.
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3,27,40,500/- was seized by respondent No. 2. During the investigation
Indian Currency of Rs. 25,00,000/- and UAE 2200 Dirham was seized from
one of the Noticee. The petitioner also provided information with regard
to other persons involved in the said act of smuggling. Pursuant to the
information and investigation, a Show Cause Notice bearing dated 22 nd
June, 2018 was issued.
4. On 28th November, 2018, the Additional Director General, DRI, MZU,
Mumbai disbursed an Advance Reward of Rs. 6,00,000/- to the
informant/petitioner after taking his thumb impression.
5. The Show Cause Notice was adjudicated by the Additional
Commissioner of Customs (Import), Mumbai vide Order-in-Original dated
31st March, 2020. The Petitioner vide letter dated 29th November, 2021 to
the Respondent No.2 requested to release the final/balance reward.
6. Our attention is invited by learned counsel for the petitioner to the
Guidelines For Grant of Reward to Informers and Government Servants,
2015. The principles governing grant of reward are spelt out in Part-I.
Clause 3.1 provides that, ‘Reward is purely an ex-gratia payment which,
subject to guidelines, may be granted based on the judgment of the
authority competent to grant rewards and taking into account facts and
circumstances of each case and cannot be claimed by anyone as a matter of
right’. Clause 3.2 provides that, ‘Reward should not be sanctioned for
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routine and normal nature of work. Clause 3.3 provides for ‘Criteria for
grant of reward. Several factors have to be kept in mind by the authority
competent to grant the reward. The quantum and ceiling of rewards is
provided in Clause 5. Clause 5.1.1 provides that, ‘Informers and
Government Servants will be eligible for reward upto 20% of the net sale-
proceeds of the contraband goods seized and/or amount of duty/Service
Tax evaded plus amount of fine and penalty levied/imposed and recovered.
The payment of Advance/Interim Reward is provided in Clause 6. Clauses
6.1 and 6.2 relevant in the present case read thus:-
“6.1 Advance/Interim reward may be paid to informers and
Government Servants upto 50% of the total admissible reward
immediately on seizure in respect of the following categories of
goods, namely:-
a) gold/silver bullion; and
b) arms and ammunition, explosives.
6.2 In other cases of outright smuggling, involving seizures of
contraband goods, including foreign currency, advance/interim
reward upto 25% of the total admissible reward may be paid to
the informers and Government Servants, 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 adjudication order is likely
to be sustained in appeal/revision proceedings. However, in
case of seizure of perishable goods including chemicals,
cigarettes etc. under the provisions of the Customs Act, 1962,
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advance reward maybe paid to the Government Servants only
after disposal/pre-trial disposal of the seized perishable goods
including chemicals, cigarettes etc.”
7. We also refer to Clause 6.5 which deals with cases in which
proceedings are closed without the issuance of show cause notice or within
30 days of service of show cause notice after recovery of duty, interest
and/or penalty. The payment of final reward is provided under Clause 7.
8. The petitioner submitted that the show cause notice has been
adjudicated and that an order in original has been passed. It is submitted
that so far confiscation of goods is concerned, the same is not under
challenge in any proceedings and has since attained finality. According to
learned counsel for the petitioner, what is under challenge by the noticee is
to the penalty imposed, and in one case it is the respondents who filed
proceedings against the release of residential property. It is further
submitted by learned counsel for the petitioner that an advance reward
was granted to the petitioner only to the tune of Rs.6,00,000/- and that to
as far back as on 28 th November, 2018. Now that the confiscation and
seizure has attained finality, considering the distance of time, a final
reward has to be released or at least the aspect of advance released needs
to be reconsidered.
9. Mr. Mishra, learned counsel for the respondents submitted that the
provisions of Clause 7 of the Guidelines are very clear. It is submitted that
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only after the conclusion of adjudication/appeal/revision proceedings, as
well as closure of proceedings mentioned at para 6.5 that the payment of
final reward is to be made. It is submitted that in any case that after the
conclusion of the proceedings, necessary orders would be passed by the
competent authority/committee for payment of final reward. It is
therefore submitted that the present petition is pre-mature in as much as
the petitioner is already in receipt of advance reward which was paid in
2018.
10. We have heard learned counsel. No doubt, the reward should not be
granted as a matter of routine and it is purely an ex-gratia payment which
is subject to the guidelines. The present is a case where the respondents
have acknowledged the information which was provided by the petitioner
and therefore the advance reward was paid. Once having paid the
advance reward and taken a stand that on closure of adjudication
proceedings, the necessary order would be passed for payment of final
reward, there is no manner of doubt that after the closure of the
adjudication proceedings, the respondents have to make the payment
towards the final reward which obviously will be subject to the criteria
which is laid down in the guidelines.
11. The question now is whether the petitioner should await the
payment of final reward till the adjudication of the proceedings when we
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find that what is under challenge by the noticee, pursuant to the
adjudication of the show cause notice and passing of the order in original,
is limited to the extent of payment of penalty. The position as it stands
today clearly indicates that the confiscation of the goods or the recovery of
the currency is not under challenge. To that extent, the
confiscation/recovery has attained finality. Therefore, considering the fact
that an interim reward was made as far back in 2018, consequent to which
there is a finality to the confiscation of the goods by virtue of the order in
original, in our view, it would be unfair if the petitioner is made to wait till
the proceedings are closed. To a large extent the proceedings have
attained a finality.
12. Clause 6.1 provides that advance/interim reward may be paid to the
informers and Government Servants upto 50% of the total admissible
reward immediately on seizure in respect of the following categories of
goods, namely, gold/silver bullion; and in other cases of outright
smuggling, involving seizures of contraband goods, including foreign
currency, advance/interim reward upto 25% of the total admissible reward
may be paid to the informers 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 adjudication
order is likely to be sustained in appeal/revision proceedings. Now that
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the confiscation order has become final, this is a fit case where the
advance/interim reward can be granted to the petitioner.
13. We do appreciate the submission of learned counsel for the
petitioner, that considerable risk is involved in supplying the information at
times. The scheme of interim/advance reward has been framed with a
view to encourage the informers and not to discourage them. This aspect
obviously will be kept in mind by the competent authority when the
interim/advance reward is made. The petitioner should not be made to
suffer for the delay in disposal of the proceedings. It is therefore, in these
facts we are inclined to take the aforesaid view, which in our opinion
serves the ends of justice as the guidelines provide that the final reward is
payable only in conclusion of the proceedings.
14. We therefore direct the jurisdictional reward sanctioning authority to
reconsider the aspect of paying advance/interim reward to the petitioner in
terms of Clause 6.1 considering the fact, that the confiscation order has
attained finality and the seizure of the foreign currency is confirmed. The
competent authority to determine and pay the advance/interim reward in
terms of the guidelines, to the petitioner within a period of four weeks
from the date of receipt of this Order.
15. The petition is allowed to the aforesaid extent. No costs.
(SANDESH D. PATIL, J.) (M. S. KARNIK, J.)
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