Stereo H.C.J.D.

A 38

JUDGMENT SHEET
IN THE LAHORE HIGH COURT LAHORE
MULTAN BENCH, MULTAN
JUDICIAL DEPARTMENT

Writ Petition No. 4190 of 2021

Naveed Ishaq Versus Ex-Officio Justice of

Peace, etc.

JUDGMENT

Petitioner by: Mehr Fakhar Raza Ajmal Malana,

Advocate.

Respondents by: Rao Raheel Nadeem, Advocate.

Malik Shoukat Mahmood Mahra, Assistant
Advocate General.

Date of hearing: 21.12.2021

MUHAMMAD SHAN GUL, J:- The fact that the

proposition before this Court has not received a lot of judicial

attention is perhaps owed to the fact that the matter in issue is

so obvious and logically so settled that it has never been

considered moot so as to be written about or deliberated.

2. Can a dishonoured ‘self’ cheque i.e. a cheque

issued by an account holder i.e. drawer to ‘himself’

(payee) ever result in attracting criminal liability i.e.

three years of hard treatment in addition to

stigmatization and moral blameworthiness, contained in

Section 489-F PPC? Can a person dupe himself? Can a

W.P. No.4190 of 2021 2

person lend money to himself and thereby assume an

obligation to repay himself? Can a person defraud

himself? Can a person bind himself to an obligation that

he owes himself? These questions may sound very basic

and in fact naïve but since a Justice of Peace i.e. an Addl.

District & Sessions Judge has ordered for the registration

of a criminal case against the petitioner in the present

petition on the basis of a dishonoured ‘self’ cheque

without demur, the proposition at hand gains importance

and may be worthy of being looked at, both, for the

purpose of gaining judicial clarity as also in ensuring

respect and sanctity for the age old principle of penal

liability being strictly construed.

3. Despite best efforts all that this Court has been able

to lay its hands on are two reported precedents (both bail

applications) and which only contain observations on the

proposition in issue in passing.

4. In “Muhammad Sarfraz v. The State and others”

(2014 SCMR 1032), it has been held as follows:-

“Moreover, the said cheque, was not issued in

favour of the complainant; besides there is no
amount mentioned in words. The complainant
however alleges that this was a „self cheque‟ and
therefore, it was issued to him and accordingly
the dishonouring of the cheque would attract the
provisions of section 489-F, P.P.C. He has also
mentioned that the amount covered by the cheque
was paid by the complainant to the petitioner
from time to time for the purposes of the business
and it is for the return of such amount. Contrarily,
on further query, there is no evidence available
with the complainant as to how, when and by
W.P. No.4190 of 2021 3

what process various amounts were paid to the

petitioner for business purposes. To that end,
these aspects of the matter have not been taken
into consideration by the learned High Court
while declining bail to the petitioner. We find
these contours of the case to be quite conspicuous
and relevant entitling the petitioner to bail.”

5. In “Johar v. The State and another” (2014 YLR

640), it has been held as follows:-

“The question whether a cheque issued to „Self‟

can be said to be issued with dishonest intention or
towards repayment of a loan or fulfillment of an
obligation, which is dishonored on presentation
would seriously need consideration at trial.”

6. The above cases, therefore, only attach a prima

facie recognition and acknowledgement to the otherwise

basic principle that a dishonoured „self‟ cheque cannot

possibly attract criminal liability. The issue before this

Court, therefore, comes across as arguably a case of first

impression.

7. Petitioner has laid a challenge to an order dated

15.3.2021 whereby a Justice of Peace has ordered for the

registration of a criminal case against the petitioner on the

basis of a „self‟ dishonoured cheque on which no

endorsement whatsoever in favour of the eventual bearer has

been recorded.

8. Facts in brief as canvassed by the counsel for the

petitioner are that the petitioner never issued the cheque to

anyone or in anyone‟s name and which is why no name of a

recipient is mentioned as „payee‟ and it is the drawer himself

W.P. No.4190 of 2021 4

who is mentioned as „payee‟ i.e. „self‟. Learned counsel for

the petitioner submits that the cheque in issue was kept by

way of security by his employer, Muhammad Sohail, who

manages and runs a poultry shop and who handed it over to

the complainant without sensitizing the petitioner and

without taking the consent of the petitioner. Learned counsel

for the petitioner adds that even the police report summoned

by the Justice of Peace supports his stance that he was an

employee many years back at „Umar Traders‟ where the

complainant/respondent No.3, Mushtaq Ahmad, was also a

regular visitor and where a „committee system‟ was in vogue

which was managed by the proprietor of Umar Traders along

with the petitioner. That this „committee system‟ was brought

to an end six years back and whereafter the petitioner also

left that shop and started working for one Muhammad Sohail,

who runs a poultry shop in the same vicinity and where too

the complainant was a regular visitor. That there was a

dispute about payment of dues between his new employer,

Muhammad Sohail, and the complainant and to reconcile

which his new employer obtained a security cheque from him

only to be kept and shown as security and not to be handed

over and which is why it carries no endorsement with

reference to anyone else but the petitioner himself and that,

therefore, no one could have even become a holder in due

course of the cheque in question.

W.P. No.4190 of 2021 5

9. Learned counsel for the respondent, on the other

hand, supports the impugned order passed by the Justice of

Peace dated 15.3.2021 and submits that the well-reasoned

order passed by the Justice of Peace should be upheld.

10. The order passed by the Justice of Peace is being

reproduced hereunder:-

“3. The police report was summoned, which

supports stance of the petitioner. Learned counsel
for the petitioner produced the cheque as well as
the dishonouring memo, in original, which were
returned after perusal. Hence, from the very
contents of the petition, commission of cognizable
offence u/s 489-F PPC is made out, so the
respondent No.2 i.e. SHO Police Station Tulamba,
Mianchannu, is directed to register the case u/s
489-F PPC and submit his report before the office
of undersigned at earliest. File be consigned to
the record room after its due completion.

11. What is strange about the order passed by the

Justice of Peace is the additional direction for a compliance

report generally not found in orders by Justices of Peace

while ordering registration of criminal cases. What is also

conspicuous is the order being absolutely silent about the

fact of the cheque in issue being a ‘self’ cheque.

12. According to the Hon‟ble Supreme Court of

Pakistan in “Mian Muhammad Akram v. The State and

others” (2014 SCMR 1369) and “Mian Allah Ditta v. The

State and others” (2013 SCMR 51), Section 489-F PPC is

relevant and attracted only to cases where the dishonoured

cheque had been issued for repayment of a loan or towards

W.P. No.4190 of 2021 6

discharge of an obligation. It has been clarified by the

Hon‟ble Supreme Court of Pakistan that the obligation to be

discharged had to be an existing obligation and not a

futuristic obligation arising out of a possible default in future.

This is why a cheque issued by way of surety or guarantee to

cater for a possible default in future cannot be accepted as a

cheque issued towards discharge of an obligation. According

to the Hon‟ble Supreme Court of Pakistan the obligation in

the context of Section 489-F PPC has to be an existing

obligation, existing at the time of issuance of the cheque and

not a futuristic obligation. A provision constituting a criminal

offence and entailing punitive consequences has to be strictly

and narrowly construed and interpreted, it may be added with

advantage.

13. Section 489-F of the Pakistan Penal Code of 1860

criminalizes and resultantly penalizes the act of dishonestly

issuing a cheque towards repayment of a loan or fulfilment

of an obligation, which is dishonoured on presentation by

punishment with imprisonment which may extend to three

years or with fine, or with both, unless the drawer can

establish, for which the burden of proof shall rest on him, that

he had made arrangements with his bank to ensure that the

cheque would be honoured and that the bank was at fault in

not honouring the cheque.

W.P. No.4190 of 2021 7

14. The term „dishonestly‟ has been defined by the

Pakistan Penal Code, 1860 in Section 24 to mean doing

anything with the intention of causing wrongful gain to one

person or wrongful loss to another person.

15. In order for the act of issuance of a cheque to

constitute a cognizable offence under Section 489-F of the

PPC, 1860 not only must the cheque be issued with the

intention of causing wrongful gain to one person or wrongful

loss to another but the cheque must also be issued towards

the repayment of a loan or fulfillment of an obligation.

16. Keeping in view the above two provisions it was

held by the Honorable Supreme Court of Pakistan in “Mian

Allah Ditta v. The State and others” (2013 SCMR 51) at

Paragraph 6 that “every transaction where a cheque is

dishonored may not constitute an offence. The foundational

elements to constitute an offence under this provision are

issuance of a cheque with dishonest intent, the cheque should

be towards repayment of a loan or fulfillment of an

obligation and lastly that the cheque is dishonored.”

17. A “self-cheque” has neither been defined by the

Penal Code nor the Negotiable Instruments Act, 1881, but it

is obviously a cheque wherein the drawer himself is the

payee. The word “issues” in terms of a cheque has been

expounded by virtue of Section 3 (e) of the Act of 1881 to

mean “the first delivery of a… cheque complete in form to a

W.P. No.4190 of 2021 8

person who takes it as holder” while the term “holder” of a

cheque has been defined by Section 8 of the Act of 1881 to

mean “the payee or endorsee who is in possession of it or

the bearer thereof”. The term “payee” has been explained by

Section 7 to mean “The person named in the instrument, to

whom or to whose order the money is by the instrument

directed to be paid".

18. Quite obviously, if the payee is “self” it can be

reasonably and correctly presumed that the money for which

the cheque was issued was to be paid to the drawer himself

and it is also reasonable to presume that a person would not

dishonestly issue a cheque to pay money to himself and that

the cheque was not issued towards the repayment of a loan or

towards the fulfillment of some legal obligation one has

towards oneself.

19. In a recent case cited as “Muzaffar Ahmad v. The

State and 2 others” (2021 P.Cr.LJ 1393), the Lahore High

Court has acknowledged some similarity between the offence

relating to the dishonor of a cheque in India, which is

governed by Section 138 of the Indian Negotiable

Instruments Act, 1881 and the one relating to the dishonor of

a cheque in Pakistan, which is governed by Section 489-F of

the PPC, 1860 in the following words contained at Paragraph

24 of the judgment:
W.P. No.4190 of 2021 9

“No doubt section 138 of the Indian Negotiable

Instruments Act is different from section 489-F PPC
but the phrase “discharge of debt or liability” in the
former somewhat carries the same meaning as
“repayment of a loan or fulfilment of an obligation”
in the latter.”

20. Needless to state that the ambit of the offence in

Pakistan is further constrained by the words “whoever

dishonestly issues a cheque…”, which are absent in Section

138 of the Negotiable Instruments Act, 1881 presently in

field in India. Not only this but Section 139 of the Negotiable

Instruments Act, 1881 in India further presumes that the

holder of a cheque received the cheque of the nature referred

to in section 138 for the discharge, in whole or in part, of any

debt or other liability, unless the contrary is proved. There is

no such presumption under 489-F of the PPC, 1860, which

only makes another unrelated presumption: that the drawer

had made arrangements with his bank to ensure that the

cheque would be honored and that the bank was at fault in

not honoring the cheque. In relation to the issuance of a

cheque, the Pakistan Penal Code does not presume that the

holder of a cheque received it for the discharge of any debt or

other liability meaning thereby that the onus shall be on the

holder to prove in the first instance that he received it for

such purpose.

21. In neighboring Indian jurisdiction, where the ambit

of the offence relating to the dishonor of a cheque is

relatively wider, it was held in a judgment reported as “V.

W.P. No.4190 of 2021 10

Rama Shetty v. N. Sasidaran Nayar” and cited as (2008 Cri.

L. J. 4297) at Paragraph 3 that a self-cheque, which is not

drawn in favor of another person, would not attract the

provisions of Section 138 of the Negotiable Instruments Act,

1881.

22. In another judgment reported as Dr. Jiten

Barkakoti vs Subrata Patangia and cited as 2005 CriLJ

3598 it was again held at Paragraph 8 as follows:

“Reverting 'to the facts of the present case, we

find that Ext. I is a self-drawn cheque, it was not
issued in favour of the complaint. It was also not
endorsed in favour of the complainant. Hence,
the provisions of Sections 118 and 139 of the Act
are not applicable as the complainant is neither a
payee nor a holder in due course and the
dishonour of such self-drawn cheque does not
amount to penal offence under Section 138 of the
N. I. Act. We, therefore, hold that the trial Court,
as well as, the appellate Court failed to correctly
appreciate the provisions of the Act in holding the
petitioner-accused Dr. Jiten Barkakoti guilty of
the offence under Section 138 of the Act for
dishonour of a self-drawn cheque, which was
never endorsed in favour of any one.”

23. Also, in another recent case reported as J. Hari Kishan

v. The State of Telangana Criminal Petition 7657/17

deciding a similar issue it was held “….. non-replying to a

legal notice will not give status to the self-cheque as the

person in possession of it as a Holder in due course within the

meaning of Section 138 (b) of the Act, in the absence of any

document to say what was mentioned in the legal notice

without foundation of any endorsement of any document

independently cheque was given to claim as Holder in due

W.P. No.4190 of 2021 11

course.” Therefore, some documentation would be required to

prove that a self cheque was endorsed in favour of the holder

so as to make him a holder in due course, otherwise, it shall be

presumed that it was a self cheque in its true essence and not

one that was endorsed in favour of the holder.

24. In Anil Kuman v. Ramakrishna Kartha 2009(2)

CCC 535 (Kerala High Court), it was held as follows:-

“1. Can a person who is not the payee and not an

endorsee is entitled to file a complaint under Section
138 of Negotiable Instruments Act. This is the question
to be settled in the revision.

9…..Delivery alone is not sufficient to make him a

holder in due course, endorsement is mandatory. Ext.
P1 shows that it is payable to Krishnadas. There is no
endorsement by Krishnadas in favour of first
respondent. Even if, there was delivery of Ext. P1
cheque by the brother of the payee in favour of first
respondent as alleged in the complaint and that too
for consideration as claimed by first respondent as
PW 1 at the time of his examination, he cannot be the
holder in due course as defined under Section 9 of
Negotiable Instruments Act so long as there is no
endorsement in his favour. Hence first respondent is
not a holder in due course. When he is not the holder
in due course Magistrate cannot take cognizance of
the offence punishable under Section 138 of
Negotiable Instruments Act, except upon a complaint
in writing by the payee or the holder in due course of
the cheque. The Magistrate could not have taken
cognizance of the offence as first respondent is not
the holder in due course. If so, the conviction is bad
in law. Hence it can only be found that conviction of
revision petitioner for the offence under Section 138
of Negotiable Instruments Act is not legal.

10. Revision is allowed. Conviction of revision

petitioner for the offence under Section 138 of
Negotiable Instruments Act by the Judicial First Class
Magistrate-I, Cherthala as confirmed by Additional
Sessions Judge, Alappuzha is set aside. Revision
petitioner is acquitted. The complaint stands
dismissed.”
W.P. No.4190 of 2021 12

25. Therefore, when the question pertains to issuance of a

“self-cheque”, whereby the drawer is himself the payee, the

offence created by Section 489-F is not attracted.

26. Section 154 of the Criminal Procedure Code, 1898

mandates the registration or recording of information relating

to the commission of a cognizable offence, and the

information provided by the informant must allege the

commission of a cognizable offence. In case a cheque is made

out to self only, and there is no supporting evidence that the

bearer was in fact a holder in due course of such a cheque, the

commission of a cognizable offence cannot be established.

27. If the cheque is issued to “Self” only, there will be no

question of any offence. The problem arises when a Cheque is

issued to “Self” but the same also allows the (unidentified)

bearer to collect the proceeds and is presented by some person

(since any bearer can present and get the cheque encashed)

and upon its dishonour such person approaches the police for

registration of FIR under Section 489-F. In the case before this

Court the bearer of the Cheque is the Complainant and asserts

the commission of offence without there being anything on

record to show that he himself is the creditor of the drawer of

the cheque. Therefore, it cannot be ascertained without more

that the drawer of the cheque intended that the complainant

could present the cheque and hence there is nothing to indicate

that the drawer had any intention to issue the cheque to the
W.P. No.4190 of 2021 13

complainant let alone a dishonest intention and no evidence

suggests that the complainant is creditor of the drawer either.

28. The above clearly means that none of the tests alluded

to by the Hon‟ble Supreme Court of Pakistan in “Mian

Muhammad Akram v. The State and others” (2014 SCMR

1369) and “Mian Allah Ditta v. The State and others” (2013

SCMR 51) are met.

29. However since an offence under Section 489-F requires

the cheque to have been issued with dishonest intention as

well as for the purpose of payment against a loan or liability,

being a mere „payee‟ or a „bearer‟ would arguably not fulfill

the requirements of Section 489-F for which the complainant

must show (i) a clear intention of the drawer allowing the

complainant to present and encash the cheque (through a

specific endorsement) and also (ii) a liability owed by the

drawer of the cheque towards the complainant. Otherwise, it

will simply be a bearer cheque open for encashment by

anyone to whom the drawer does not owe or might not intend

to pay anything.

30. In view of what has been observed and noted above,

order dated 15.3.2021 is set aside and declared to be of no

legal effect. It is also declared that a „self‟ dishonoured cheque

(even if the reference on the cheque to a bearer is not crossed)

does not entitle a bearer to request for registration of a

criminal case unless and until there is a positive endorsement

W.P. No.4190 of 2021 14

in favour of the bearer either on the back of the cheque in

question or by means of a separate document which would

make the bearer a „holder in due course‟.

31. Allowed in the above terms.

(MUHAMMAD SHAN GUL)

JUDGE

Approved for reporting.

Judge

*Waseem*