DELHI ADMINISTRATION versus S. N. KHOSLA

Citation: [1971] SUPP. 1 S.C.R. 315 · Decided: 02-04-1971 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Dismissed

Judgment (excerpt)

DELHI ADMINISTRATION 
v. 
S. N. KHOSLA 
April 2, 1971. 
315-
A 
IS. M Snau, c. J. AND P. JAGANMOHAN REDDY, J.J 
s 
Prevention of Corruption Act, 1947'-S. S(l)(b) .and (tf}-O(ficer ob-
taining goolh on credit without paying for tht same.-lf amounts to ob· 
1aining valuable thing without corisideration' or obtaining "pecuniary advan· 
tagt'. 
The respondent, an income tax officer, obtained goods on credit from 
C 
several shops without paying for the same. He was prosecuted and con-
victed under s. 5(2) of the Prevention of the Corruption Act, 1947. The 
Higll C<'11rt held that no offence under cl (b) or cl (d) of s. S(I) was 
proved. 
Dismissi~I the appeal to this Court, 
HELD: There was consideration for the obtaining of goods on credit 
and it cannot be said that an officer, if he obtains goods on credit, even 
if he does not intend to pay is o btainiiig a valuable thing without consi-
deration. The case may be different if it is proved thai there was •n 
agreement with the trader that the trader would not demand. the money 
and the officer would not pay. There is no evidence to sustain such an 
inference in· this case. [3170] 
The words 'pecuniary advantaae' are _Of wide amplitude; but even su 
in the context of s. S(l) (d) obtaining goods· on credit cannot be held to 
amount to obtaining pecuniary advantage.· If tbete is an qreement bet· 
ween the officer and the trader that the officer is not expected to pay for 
the goods this would amount to obtaining pecuniary. advantage. 
It does 
not appear that there was any suggestion that the respondent obtained 
the credit only because he was an income tax officer. 
[317E] 
CRIMINAL APPELLATE JURISDICTION : 
Criminal Appeal No. 
236 of 1966. 
Appeal by special leave from the judgment and order dated 
December 24, 1965 of the Punjab High Court, Circuit Bench at 
Delhi in Criminal Appeal No. 16-D .of. \964. 
· 
Debobrata Mukherjee, 0. P. Malhotra and R. N. Sachthey, 
for the appellant. 
c. K. Daphtary and H. K. Puri .. for the respondent. 
The Judgment of the Court was delivered by 
Slkri, C.'J.-The \!&sic facts _i~ t~ a.ppeal. by. special leave, 
are not in dispute and the on!}'. question .1nvolved 1s whether on 
D 
F. 
G 
H 
316 
B 
c 
D 
E 
G 
H 
SUPREME COURT REPORTS 
(1971] SUPP. s.c.R. 
the facts, as found, the respondent should be convicted under Sec-
tion (5) (2) of the Prevention of Corruption Act, 1947 (hereinafter 
referred to as the Act). 
The respondent has been acquitted by 
the High Court (Dulat, J.). 
The relevant facts are as follows : The respondent was an 
Income-tax Officer for about ten years from December, 1950 to 
September, 1960. 
While he was posted at Amritsar during the 
year 1954-55 he obtained on credit petrol from a petrol pump and 
the bill came to Rs. 151. 
It is stated that the respondent did not 
pay this bill. 
Later, he was posted at Delhi from 1955 to 1958 
and at Delhi he obtained goods on credit from Mis Empire Stores 
and during the period of about three years he purchased goods 
worth Rs. 2,876.20. These bills the respondent has also not paid. He 
also purchased goods on credit from Mis Sylco, who are cloth 
merchants as well as tailors. 
To them he owed Rs. i ,853: 10 and 
he also has not paid this bill. 
He owed Rs. 71·75 to Mis Elec-
tronics Limited. He purchased a refrigerator from Mis Oriental 
Radio Corporation at a concession of Rs. 150. 
The respondent 
admitted his liability. 
According to the prosecution all this 
amounted to obtaining valuable things without consideration or 
for consideration which the respondent knew to be inadequate. 
The learned Special Judge found that the respondent had 
means to pay during the relevant period and he did not delibera-
tely pay. 
From this he drew the inference that the respondent 
never intended to make the payment He relied on the fact that 
the period of limitation to recover these amounts had expired. 
According to the Special Judge these contracts were per se illegal 
and void under Section 23 of the Contract Act 
It was urged before the High Court that when a person obtain-
ed goods on credit he did not obtain them without consideration 
and assuming that he did not really intend to pay, even when he 
promised to pay. he might be cheating the creditor but the transac-
tion was not without consideration for there was a clear promise 
to pay. 
The High Court held that clause (b) of sub-section (!) of 
Section S of the Prevention of Corruption Act did not contemplate 
the case of 

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