**DELHI** **ADMINISTRATION**
_v._
315
**A**
S. N. **KHOSLA**
_April_ 2, 1971.
### 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 convicted 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 - btainiiig a valuable thing without consideration. 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**
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SUPREME COURT REPORTS (1971] SUPP. s.c.R.
the facts, as found, the respondent should be convicted under Section (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_ Electronics 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 obtained 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 transaction 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 a purchase on credit accepted as a valid promise by the
giver or the creditor. The High Court was accordingly unable to
agree with the learned Special Judge that the obtaining of these
goods was without consideration within the meaning of Section (5)
()) (bl of the Act.
The High Court next considered Clause (d) of Section 5(1) of
the Act. The High Court diJJered from the learned Special Judge
and held that the credit sales were not illegal transactions. _lt_ was
urged before the High Court that if the respondent never intended
DELHI ADMN. J. S. N. KHOILA _(Slkrl,_ C./.)
to pay for the goods he purchased from the various shops then the
respondent obviously cheated those shopkeepers, and since cheating was certainly illegal, it must be held that the respondent obtained goods by 'illegal means' and that would be an offence under
Section _SW_ (d) of the. Act. The High Court, however, felt convinced that Clause (d) pf Section S(l), al!hough it did literally seem
to cover the transactions, was not designed or intended to cover
such cases.
- In our opinion the High Court was quite right in holding that
no offence had been committed under Section _S_ ()) (b) of the Act.
It seems to us tha( 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 obtaining a
valuable thing without consideration. The case may be different
if it is proved that there was an agreement with the trader that the
trader would not demand the money and the officer would not pay,
and the bill and the reminders sent would be merely a formality.
There is no evidence to sustain such an inference in this particular
case.
Coming to Section _S_ ()) (d), the question arises whether the respondent had obtained any pecuniary advantage. There is no doubt
that th" words "pecuniary advantage" are of wide amplitude but
even so in the conte.itt of Section _S_ ()) (d) obtaining goods on credit
cannot be held to amount to obtaining pecuniary advantage. As
we have said, if there is an agreement between the officer and the
trader that the officer is not expected to pay for the goods then
there is no doubt that this would amount to obtaining pecuniary
advantage, but if there is no such agreement and the officer does
not pay it cannot be said that he has obtained any pecuniary
advantage. He does not act in any manner different from a non:
official who obtains things on credit and then refuses to pay. In
this case P. W. 13, Mukand Lal, partner of M/s. Empire Stores,
who appeared as a prosecution witness, stated that the firm allowed the respondent credit sales in his capacity as a known customer
and all their customers got credit facilities. He further said that
the firm. allowed customers fairly long terms of credit. They
usually avoided going to court for the recovery of their dues, and
they got payment from their customers of dues whose recovery
had become barred by time. He also added that the firm still
expected that the amounts standing against the respondent would
be paid ·by him. It does not appear that there was any suggestion
that the respondent obt~neJ this credit only because he was an
Income-tax Officer. Firms give credit to officers not because they
are officers but because they know that they are persons with fixed
salaries from which the bills could be realised. If we were to hold
otherwise it would be impossible for any officer to go to a shop and
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318 SUPJiBMB COURT REPORTS [1971] SUPP. s.c.11
A obtain credit foi:'if'l'le did not pay within a reasonable time a charge
could_ be leVied :asam&t him und~ ~tion _S._ (l) (dl of the Act. · In
our view the liigb Court ·was right m holdmg that offence under
# Section s m (d) l!ad ifot been proved. '
#### In the resalt the' appeal fails and ii dismissecl
B
K.B.N. _Appeal dismissed._
