Case Law Details
Ketan Kantilal Modi Vs Union of India & Ors (Supreme Court of India)
This article dissects the Supreme Court case, Ketan Kantilal Modi Vs Union of India & Others, a case revolving around the proper reward for the revelation of tax evasion. We explore the intricacies of the verdict, which has seen the Supreme Court order a reconsideration of the reward granted to the whistleblower.
Ketan Kantilal Modi, the appellant, had provided information leading to the discovery of a significant tax evasion amounting to Rs. 2.59 crores. As per the policy, he was entitled to a reward of up to 20% of the amount evaded, translating to Rs.51.87 lakhs. However, the appellant was given a significantly lower reward of Rs. 5.50 lakhs. The Supreme Court heard the case and directed the Reward Committee to revisit the reward allocation decision, especially considering no explicit reasons were recorded for awarding a lower reward.
The case opens up the critical discussion on the transparency of reward policies for whistleblowers. The court’s stance emphasizes the importance of due process and reasoning in decision-making, ensuring that rights are respected, and fair treatment is provided.
In conclusion, the Ketan Kantilal Modi Vs Union of India & Others case serves as a notable precedent emphasizing due process, and the necessity for transparent decision-making, especially in cases involving rewards for whistleblowers. The Supreme Court’s direction for reconsideration of the reward granted is a significant move that upholds the spirit of justice and fairness. With the committee given six months for reassessment, it remains to be seen whether Modi’s reward will be adjusted to reflect the full 20% he initially expected.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Heard the appellant-in-person and the learned counsel appearing for the Union of India.
The case of the appellant which is accepted by the respondents, is that the appellant was entitled to a reward under “the Reward to informers and Government Servants Review of Policy-Procedure and Guidelines”1 issued by the Ministry of Finance (Department of Revenue), Central Board of Excise and Customs, New Delhi (Annexure P-1).
According to the case of the appellant, he provided information to the authorities about the tax evasion of Rs. 2.59 crores by an assessee. The grievance of the appellant was that in terms of the Clause 4.1 of the said Policy, he was entitled to a reward upto 20% of the amount of duty evaded plus amount of fine and penalty imposed and recovered. His submission is that though he was entitled to the reward of Rs.51.87 lakhs, he was sanctioned only a sum of Rs.5.50 lakhs by way of reward.
The appellant filed a petition under Article 226 of the Constitution of India before the High Court. A Division Bench of the High Court held that the writ petition involved disputed questions of fact and therefore, appropriate remedy for the appellant was to file a civil suit.
Learned counsel appearing for the respondents does not dispute that the entitlement of the appellant was under Clause 4.1 of the said Policy. However, she relies upon the Minutes of the meeting of the Reward Committee. The meeting was held on 18th April, 2011. Her submission is that though the Minutes do not mention that the appellant will be entitled to only a sum of Rs. 5.50 lakhs, a note sheet was placed before the Committee which makes the recommendation to pay the sum of Rs.5.50 lakhs to the present appellant. Her submission is that she will be in a position to produce the file to show that the entitlement of the appellant was restricted to Rs.5.50 lakhs.
We carefully perused the Policy (Annexure P-1) which is admittedly applicable to the case of the applicant. Under Clause 4.1 of the Policy, the reward is upto 20% of the amount evaded plus the amount of fine and penalty levied. As per the policy, a committee comprising of three members is empowered to take a decision regarding the reward. We have perused the Minutes of the meeting dated 18.04.2011.
Though in the affidavit filed in response to the rejoinder, a reliance is placed in a note-sheet, we find that there is no mention in the Minutes that the decision of the Committee is based on any note sheet. The decision does not record the reasons why the appellant is not entitled to 20% as provided in the Policy and why the reward should be restricted to Rs.5.50 lakhs.
Reliance is also placed by the learned counsel appearing for the respondents on letter dated 12.10.2011. The letter simply records that reward amount of Rs.5.50 lakhs is being forwarded by a demand draft.
The minutes show complete non application of mind on the prayer made by the appellant. It is well settled that if the decision making authority does not record reasons for coming to a particular conclusion, the reasons cannot be supplied by filing affidavits.
We, therefore, direct the Committee constituted under the State Government Policy dated 20.06.2001 to reconsider the case of the appellant. The pleadings in this appeal and other documents which are on record shall be placed before the Committee.
We may also note here that the order dated 20.09.2018 records the statement of learned ASG that the amount of reward has been enhanced to Rs.9.45 lacs. This also supports the reasons recorded by us that there is no application of mind by the Committee.
The Committee will give opportunity of being heard to the appellant and then decide whether the appellant is entitled to any amount over and above Rs.9.45 lakhs already paid to him.
Needless to add that if the committee finds that appellant is entitled to additional amount, the Committee will recommend payment of reasonable interest to the appellant.
Appropriate decision shall be taken by the Committee within a period of six months from today and shall be communicated to the appellant.
The impugned judgement and order is modified to the above extent. The Appeal is partly allowed. No costs.
1 The Policy
