MOTILAL KISHANGOPAL THANVI Vs. UNION OF INDIA

JUDGEMENT

(1.) THE plaintiff has filed the present suit for a decree in an amount of Rs. 14,25, 000/- together with costs. It is the case of the plaintiff that on 10th May 1988 and 11th May 1988 he had submitted certain information to defendant No. 2, the Director of Inspection, Income-tax Department that there was evation of Income-tax and illegal transaction by four shop owners whose names are mentioned in paragraph 3 of the plaint. The plaintiff claims that pursuant to the information given by him raid was conducted by defendant No. 2. As a result of that raid material worth Rs. 3 crore were seized. According to the plaintiff, he is entitled to receive 10% of the amount of Income-tax charged by the Department pursuant to the information supplied by the plaintiff. According to the plaintiff, he is entitled to an amount of Rs. 15 lac as reward. The plaintiff submitted that he has been paid only an amount of Rs. 75,000/- and therefore, he is entitled to a decree in a sum of Rs. 14,25,000/ -.

(2.) THE suit is resisted by defendant Nos. 1, 2 and 3. According to the defendants, this suit is not maintainable because, grant of reward under the guidelines framed for that purpose by the Department is in the discretion of the authorities and getting a reward is not a matter of right which can be enforced by a Court of law. According to defendant Nos. 1, 2 and 3 an amount of Rs. 24,000/- was given as interim reward to the plaintiff. Thereafter, the amount of reward was worked out as Rs. 75,000/- and the balance amount was paid. The defendants have also claimed that the plaintiff had not given any specific information as required by the guidelines which can be said to have resulted in recovery of the Income-tax. On the basis of the rival pleadings, this Court framed following issues, which read as follows: 1. Whether the plaintiff proves that he is entitled under the Income-tax Act to receive 10% of amount collected on account of the information furnished by him? 2. Whether the plaintiff proves that he is entitled to recover Rs. 14,25,000/- from the Income-tax Department? 3. Whether the plaintiff having received Rs. 75,000/- as per the final reward is entitled to claim any amount under the present suit? 4. Whether the defendants No. 1 to 3 prove that the plaintiff has no locus standi to file the suit? 5. Whether the defendants prove that the amount held to be payable at the discretion of the competent authority under the Reward Guidelines 1987 has been paid to the plaintiff?"

(3.) PERUSAL of the issues shows that issue No. 4 is in the nature of a preliminary objection to the maintainability of the suit. It is the case of the defendants that the plaintiff has no locus to file this suit. In my opinion therefore it would be appropriate to take up issue No. 4 for consideration first. The defendants have produced on record the guidelines, which were framed by Income-tax Department governing grant of rewards to informants in 1987. The plaintiff had given the information in the year 1988. Guideline 1. 2 of the guidelines lays down that rewards to informants, who has given information after 1st December, 1987 would be governed by these guidelines. These guidelines are in the nature of executive instructions issued by the Income-tax Department. Guidelines No. 6 of these guidelines has been relied on by the defendants which reads as follows: 6. Nature of reward and prohibition for entertainment of representations.---Reward in accordance with these guidelines will be an ex-gratia payment which, subject to these guidelines will be granted in the absolute discretion of the authority competent to grant rewards. No representation or petition against any decision regarding grant of rewards will be entertained from either the informant or any person on his behalf. "