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CHEQUE BOUNS

when the cheque was stopped from honoring as there is a complaint of missing, what is the fate of the case -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 Instruments Act, 1881 (for short “the Act”) is the question involved in this appeal.

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 REPORTABLE

 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

 JUDGMENT

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 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.
 2

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 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:
 3

 "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."

4. It 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.

 Admittedly, the 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 submitted.

 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.

5. Appellant 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, Madhya

Pradesh against the respondent No. 2 and his brother. Several other
 5

applications were filed by the appellant before the said court to which we

need not advert to.

6. Appellant 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.

7. Mr. 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.

8. Mr. 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.
 6

9. Section 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
 7

 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.
 Explanation.-- For the purposes of this section,
 "debt or other liability" means a legally
 enforceable debt or other liability."

10. A 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:

 "...In other 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. Lalit."

11. Section 138 of the Act moreover provides for a penal provision. A

penal provision created by reason of a legal fiction must receive strict
 8

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 thereunder is initiated, all the legal requirements

therefor 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 the Act.

12. 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
 9

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.

13. Before 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.

14. Keeping 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 Act.

15. For the reasons aforementioned, the impugned judgment being

unsustainable is set aside. The appeal is allowed.

 ...............................J.
 [S.B. Sinha]
 10

 ................................J.
 [Dr. Mukundakam Sharma]
New Delhi;
May 5, 2009
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