PLJ 2022 Lahore 616
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 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?
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.
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.
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.
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 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".
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.
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.
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.
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.
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 complainant let alone a dishonest intention and no evidence suggests that the complainant is creditor of the drawer either.
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.
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 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‟.
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