UNION OF INDIA versus R. PADMANABHAN

Citation: [2003] SUPP. 2 S.C.R. 432 · Decided: 13-08-2003 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Case Partly allowed

Judgment (excerpt)

A 
UNION OF INDIA 
v. 
R. PADMANABHAN 
AUGUST 13, 2003 
B 
[S. RAJENDRA BABU AND DORAISWAMY RAJU, JJ.] 
Customs Act, 1962, Centra/..· Excise and Salt Act, 1944, Gold Control 
Act, 1968 and Foreign Exchange Regulation Act, 1973/Notification dated 
C 30th March, 1985 and amendments thereunder; Clauses 4, 6 and 8: Scheme/ 
Guidelines for Reward for seizure of goods-:-Payment of Rewards thereof to 
Government Servant/informer-Amendment. limiting the amount of Reward-
Effective date-Held: Government Servant could not be placed on par with 
other Informant-Since Reward is an ex-gratia payment, it must conform to 
the guidelines-No right accrues till reward is determined and awarded-
D Since a Reward becomes final only on adjudication, date of adjudication is 
relevant date-High Court did not act properly by not considering the 
amendment since amendment was made before adjudication of the case-
Hence the order of the High Court cannot be sustained-However, in the 
facts and circumstances of the case, payment of Reward of Rs.2.5 lakhs, as 
E a special case, directed 
Clause 7-Jnterpretation of-Reward to Departmental Officers vis-a-vis 
officers in other Departments-Equivalent rank in other Departments-Held: 
As per provisions of the Scheme certain categories of eligible tjepartmental 
officers have been specified only to illustrate-Jn other Departments equivalent 
F rank could be determined for application of the Scheme. 
Appellant, Union of India issued a Reward Scheme vide its Notification 
dated 30-3-1985 authorising the State Police to effect seizure of the 
contraband goods and to make investigation under the Central Excise and Salt 
Act, Customs Act, Gold Control Act and Foreign Exchange and Regulation 
G Act. Respondent-informant, an JPS Officer, seized gold biscuits in two 
operations supervised by him. A sum of Rs. 11.28 lakhs was sanctioned by 
the Union of India towards disbursement of reward to 163 officers of the 
. Customs as well as Police Department. However, claim of the respondent for 
reward was not allowed since he was holding a rank higher to the eligible 
categories of officers. His representations were rejected by the concerned 
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U.0.I. v. R. PADMANABHAN 
433 
authorities. He had filed Writ Petitions before the High Court Single Judge A 
directed the Department to consider his claim on merit holding that the 
exclusion of the specified categories of officers from being rewarded should 
be on the basis of value of seizure and not otherwise and amendments in the 
guidelines limiting the value of Reward cannot have retrospective effect. On 
appeal, the order was affirmed by the Division Bench of the High Court Hence B 
the present appeal. 
· It was contended for the appellant that since the payment of Reward beirr·g 
a pure ex-gratia payment, it should strictly satisfy the stipulations contained 
in the Order of the Government; that grant of reward to the officers of other 
Departments was subject to the restrictions contained in Clause 7.1 of the C 
Scheme; that any directions issued contrary to the provisions of Clause 7.1 
could not be held justified; and that the amendment made in the Scheme would 
be applicable to the present case. 
Partly allowing the appeal, the Court 
HELD: 1.1. The" decision of the Division Bench of the High Court D 
rendered in affirmance of the one rendered by the Single Bench suffer from 
a serious infirmity in not adverting properly to the basics and fundamentals 
of the Scheme for Rewards and in assuming to the contra that when an 
informer could be rewarded liberally, the Government servant also, must be 
shown the same consideration, whereas a careful scanning may go to show E 
that an informant is placed on a different pedestal than a Government servant 
[442-B, C] 
1.2. 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 F 
shown to fall or claimed within the four corners of the Scheme and not by any 
deviation or modulation of the Schen1e, as the Courts think it should be and ifit 
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. That 
apart, 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

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