7-wp 63-25.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 63 OF 2025 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 : 18 th 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. Amk 1/7 ARJUN MACHHINDRA KADAM Digitally signed by ARJUN MACHHINDRA KADAM Date: 2026.08.18 19:23:29 +0530 7-wp 63-25.doc 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 22nd 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 Amk 2/7 7-wp 63-25.doc 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, Amk 3/7 7-wp 63-25.doc 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 28th 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 Amk 4/7 7-wp 63-25.doc 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 Amk 5/7 7-wp 63-25.doc 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 Amk 6/7 7-wp 63-25.doc 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.) Amk 7/7