RAJ KUMAR KHURANA versus STATE OF (NCT OF DELHI) & ANR.

Citation: [2009] 7 S.C.R. 434 · Decided: 05-05-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2009] 7 S. C.R. 434 
1 ---
A 
RAJ KUMAR KHURANA 
V. 
STATE OF (NCT OF DELHI) & ANR. 
Criminal Appeal No. 913 of 2009 
B 
MAY 5, 2009 
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
Negotiable Instruments Act, 1881: 
" 
s. 138 - Refusal of bank to honour the cheque on the 
c ground that it was reported lost by the drawer would not attract 
the penal provisions contained in section 138 of the Act -
lntprpretation of Statues - Legal fiction. 
The question which arose for consideration in the 
present appeal was whether the return of a cheque by 
D 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. 
Allowing the appeal, the Court 
E 
HELD:1.1. A bare perusal of section 138 of Negotiable 
Instruments Act, 1881 would clearly show that by reason 
thereof a legal fiction has been created. A legal fiction, 
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. [Para 
... 
F 
1 O] [440-B-C] 
State of A.P. and Anr. v. AP Pensioners Association and 
Ors. 2005 13 SCC 161; R Ka/yani v. Janak C Mehta and Ors. 
2009(1) SCC 516; DCM Financial Services Ltd. v. J.N. Sareen 
G and Anr. 2008 8 sec 1 - relied on. 
j ' 
1.2. Section 138 of the Act moreover provides for a 
penal provision. A penal provision created by reason of a 
--
legal fiction must receive strict construction. Such a penal 
H 
434 
RAJ KUMAR KHURANA V. STATE OF 
435 
_, .,,.....~ 
(NCT OF DELHI) & ANR 
~ 
·~ 
provision, en-acted in terms of the legal fiction drawn A 
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 B 
agreement made with that bank. Before a proceeding 
thereunder is initiated, all the legal requirements therefor 
"" 
y 
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 c 
for invoking the provisions of Section 138 of the Act, thus, 
being limited, 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 the Act. [Para 11] (440- · 
E-H; 441-A-B] 
D 
2. The 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 E 
consideration the result of the complaint petition filed by 
the respondent No. 2 or the closure report filed by the 
Superintendent of Police in the First Information Report 
lodged by the appellant against him. Keeping in view the 
facts and circumstances of the case, the complaint petition 
does not disclose an offence punishable under Section. F 
138 of the Act. (Para 12 & 14] [441-B-F] 
Case Law Reference 
2005 (13) sec 161 
relied on 
Para 10 
2oos (1) sec 516 
relied on 
Para 11 
G 
.; 
it 
2008 (8) sec 1 
relied on 
Para 11 
CRIMINALAPPELLATE JURISDICTION: Criminal Appeal 
No. 913 of 2009 
H 
436 
SUPREME COURT REPORTS 
. [2009] 7 S.C.R. 
A 
From the Judgement and Order dated 18.09.2007 of the 
B 
c 
Hon'ble High Court of Delhi at New Delhi in Criminal M.C. No. 
2890 of 2007. 
M.N. Krishamani, GP. Capt. Karan Singh Bhati,Aishwarya 
Bhati, Himanshu Singh, with him for the Appellant. 
Gulshan Rai Nagpal, Jai Prakash, for the Respondent. 
The Judgement of the Court was delivered by 
S.B. SINHA, J. 
1. Leave granted. 
2. Whether 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 
D 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. 
E 
F 
G 
3. The 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 als
Excerpt shown. Read the full judgment & AI analysis in Lexace.