Raj Kumar Khurana Vs.
State of (NCT of Delhi) & ANR.  INSC 901 (5 May 2009)
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 913 OF 2009
[Arising out of SLP (Crl.) No. 8059 of 2007] Raj Kumar Khurana ...Appellant
Versus State of (NCT of Delhi) and Anr. ...Respondents
S.B. SINHA, J :
return of a cheque by the bank on the ground that it was reported lost by the
drawer would attract the penal provisions contained in Section 138 of the
Negotiable Instruments Act, 1881 (for short "the Act") is the
question involved in this appeal. It arises out of a judgment and order dated
18.09.2007 passed by the High Court of Delhi in Criminal M.C. No. 2890 of 2007.
said question arises in the following factual matrix.
Appellant kept two
blank cheques in his office along with some stamp papers. They were said to
have been stolen from his office. Information as regards missing of the said
cheques was also given to the bank. He lodged a First Information Report with
regard thereto, stating:
"...On my return
to Digras, I found that the cheques and the stamp worth Rs. 50 bearing only my
signatures had been stolen, therefore, to prevent any misuse of my cheques, I
sent a written information to State Bank, Branch Digras and subsequently on
21-04-01 I filed a complaint in Police Station Digras...."
The blank cheques
were allegedly filled up on 24.06.2001. They were presented before the bank but
the same were returned dishonoured with the remarks "said cheque reported
lost by the drawer".
Respondent No. 2
thereafter upon issuance of notices in terms of the proviso appended to Section
138 of the Act filed a complaint petition in the Court of Chief Metropolitan
Magistrate, Delhi, inter alia, alleging:
"5. That the
above said cheque in question was presented by the complainant for encashment
through its bearers, namely State Bank of India, Azadpur Branch, Delhi - 33,
but the same was returned as dishonoured with the remarks "SAID CHEQUE
REPORTED LOST BY THE DRAWER". This intimation was received by the
complainant from the bankers on 27.7.2001 and accordingly a notice dt. 3.8.2001
was sent to the accused requesting the accused to make payment of the above
said cheque amount and on 17.8.2001 the accused sent reply through his Advocate
denying his liability falsely taking the plea that the cheque in question was
lost as stolen by the complainant...
6. That the accused
has taken the above said false pleas knowing it fully well that he does not
intend to make payment of the said cheque amount, and the complainant is thus
compelled to file this complaint.
7. That the issuance
of the cheque by the accused and informing wrongly his own bankers about the
loss/ theft of the cheque, with no intention to make payment thereof, rather
showing that right from the time he issued the cheque, he had intention to
cheat and defraud the complainant by making false representations and thus the
accused has willfully committed an offence punishable under Sections 138 and
142 of the Negotiable Instruments Act read with Section 420 IPC and is liable
to be punished accordingly."
is not in dispute that the Superintendent of Police, Digras has issued a
certificate showing that FIR No. 57 of 2003 arising out of the First 4
Information Report filed by the appellant before the Station House Officer,
Digras had been closed.
It is furthermore not
in dispute that the appellant in the meanwhile filed a complaint petition under
Section 380 read with Sections 34, 467, 468 and 471 as also Sections 420 and
120B of the Indian Penal Code in the Court of Judicial Magistrate First Class
and the same is pending adjudication.
appellant had lodged a First Information Report under Sections 369, 495, 498,
420 and 34 of the Indian Penal Code with the Police Station Digras against the
respondent No. 2 and his brother, wherein also a closer report has been
Appellant has filed
another criminal complaint against the respondent No. 2 under Section 409 of
the Indian Penal Code which has also been dismissed on the ground that the
dispute is of civil nature.
has moreover filed a suit for recovery of a sum of Rs.31, 40,131.43 in the
Court of Civil Judge, Sr. Division, Darwha, and Madhya Pradesh against the
respondent No. 2 and his brother. Several other applications were filed by the
appellant before the said court to which we need not advert to.
filed an application under Section 482 of the Code in the High Court of Delhi
praying for quashing of the proceedings under Section 138 of the Act on or
about 6.09.2007 on the premise that the same was not maintainable. By reason of
the impugned judgment, the said application has been dismissed.
M.N. Krishnamani, learned senior counsel appearing on behalf of the appellant,
would submit that the High Court committed a serious error in passing the
impugned judgment insofar as it failed to take into consideration that the
complaint petition even if given face value and taken to be correct in its
entirety does not disclose an offence under Section 138 of the Act.
Gulshan Rai Nagpal, learned counsel appearing on behalf of the respondent No.
2, on the other hand, would contend that the appellant had lodged a false First
Information Report with regard to the purported theft of the cheques which
having been found to be not true and, thus, it is evident that he had resorted
to various proceedings to pre-empt the drawee of the cheques to obtain lawful
payments due from him.
138 of the Act reads as under:
"138 - Dishonour
of cheque for insufficiency, etc., of funds in the account Where any cheque
drawn by a person on an account maintained by him with a banker for payment of
any amount of money to another person from out of that account for the
discharge, in whole or in part, of any debt or other liability, is returned by
the bank unpaid, either because of the amount of money standing to the credit
of that account is insufficient to honour the cheque or that it exceeds the
amount arranged to be paid from that account by an agreement made with that
bank, such person shall be deemed to have committed an offence and shall,
without prejudice to any other provisions of this Act, be punished with
imprisonment for a term which may be extended to two years, or with fine which
may extend to twice the amount of the cheque, or with both: Provided that
nothing contained in this section shall apply unless-- (a) the cheque has been
presented to the bank within a period of six months from the date on which it
is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the
holder in due course of the cheque, as the case may be, makes a demand for the
payment of the said amount of money by giving a notice in writing, to the
drawer of the cheque, within thirty days of the receipt of information by hi m
from the bank regarding the return of the cheque as unpaid; and (c) the drawer
of such cheque fails to make the payment of the said amount of money to the
payee or, as the case may be, to the holder in due course of the cheque, within
fifteen days of the receipt of the said notice.
the purposes of this section, "debt or other liability" means a
legally enforceable debt or other liability."
bare perusal of the aforementioned provision would clearly go to show that by
reason thereof a legal fiction has been created. A legal fiction, as is well
known, although is required to be given full effect, has its own limitations.
It cannot be taken recourse to for any purpose other than the one mentioned in
the statute itself.
In State of A.P. and
Anr. v. A.P. Pensioners Association and Ors.
[(2005) 13 SCC 161],
this Court held:
words, all the consequences ordinarily flowing from a rule would be given
effect to if the rule otherwise does not limit the operation thereof.
If the rule itself
provides a limitation on its operation, the consequences flowing from the legal
fiction have to be understood in the light of the limitations prescribed. Thus,
it is not possible to construe the legal fiction as simply as suggested by Mr.
138 of the Act moreover provides for a penal provision. A penal provision
created by reason of a legal fiction must receive strict construction. [See R.
Kalyani v. Janak C. Mehta and Ors. (2009) 1 SCC 516 and DCM Financial Services
Ltd. v. J.N. Sareen and Anr. (2008) 8 SCC 1].
Such a penal
provision, enacted in terms of the legal fiction drawn would be attracted when
a cheque is returned by the bank unpaid. Such non-payment may either be: (i)
because of the amount of money standing to the credit of that account is
insufficient to honour the cheque, or (ii) it exceeds the amount arranged to be
paid from that account by an agreement made with that bank.
Before a proceeding
there under is initiated, all the legal requirements there for must be complied
with. The court must be satisfied that all the ingredients of commission of an
offence under the said provision have been complied with.
The parameters for
invoking the provisions of Section 138 of the Act, thus, being limited, we are
of the opinion that refusal on the part of the bank to honour the cheque would
not bring the matter within the mischief of the provisions of Section 138 of
court while exercising its jurisdiction for taking cognizance of an offence
under Section 138 of the Act was required to consider only the allegations made
in the complaint petition and the evidence of the complainant and his
witnesses, if any. It could not have taken into consideration the result of the
complaint petition filed by the respondent No. 2 or the closer report filed by
the Superintendent of Police in the First Information Report lodged by the
appellant against him.
us a contention has been raised that the appellant did not have sufficient
funds in his bank account. Such an allegation has not been made in the
complaint petition. In any event, it was for the bank only to say so, as the
complainant is not supposed to have knowledge in regard to the amount available
in the account of the appellant.
in view the facts and circumstances of the case, we are of the opinion that the
complaint petition does not disclose an offence punishable under Section 138 of
the reasons aforementioned, the impugned judgment being unsustainable is set
aside. The appeal is allowed.
[Dr. Mukundakam Sharma]