2024 C L D 30
AHMAD FARAN SABIR Versus The STATE and another-
Presumptions as to negotiable instrument--- Petitioner moved an application under S. 249-A, Cr.P.C., before the Trial Court for his acquittal claiming that the charge against him was groundless and there was no probability of him being convicted of any offence---Said application was dismissed---Decision of the Trial Court was upheld in revision by the Revisional Court---Validity---Petitioner had neither denied his signature on Cheque in question nor the fact that it was drawn on his account---Petitioner had challenged its validity on the premise that it did not conform to the requirements of S. 5 of the Negotiable Instruments Act, 1881---Cheque in question contained the expression "Pay cash or bearer"---In view of the said discourse, the contention was repelled---Allegedly, police had found defence plea of petitioner correct during investigation, which might help him during the trial but not at present stage---Investigating Officer had the mandate only to collect the evidence pertaining to the case he was investigating and to dig out the truth and then submit report in terms of S. 173, Cr.P.C.---Said report, however, (naeem)was not a piece of evidence itself---If the cheque said "pay cash" and the words "or bearer" were not scored off, the person in possession of the instrument would be presumed to be a holder in due course---In the instant case, respondent No. 2 (complainant) enjoyed the same presumption in respect of Cheque in question which could be rebutted at a regular trial where the parties have equal opportunity to adduce evidence to prove their respective claims and test the credibility of the witnesses of the other side through cross-examination---Sole opinion of the Investigating Officer could not negate that presumption---Section 249-A, Cr.P.C., reflected a compromise between the collective good of the society and the rights of an individual offender---Idea was to spare the offender the rigors of full trial if the Court at any stage found that the charge was groundless and the prosecution was not likely to succeed, however, present case was not a case in which the provisions of S. 249-A, Cr.P.C., could be invoked---Petition had no merit and was therefore dismissed.
----Ss. 249-A & 561-A--- Quashing of proceedings--- Inherent jurisdiction of High Court---Scope---In law, S. 561-A, Cr.P.C., did not confer an alternative or additional jurisdiction on the High Court---Said provisions of law merely preserve it's inherent jurisdiction to enable it to make such orders as might be necessary to give effect to an order under the Criminal Procedure Code, 1898 or to prevent the abuse of the process of any Court or otherwise to secure the ends of justice---Said section could not be (naeem)used to stifle prosecution---High Court should invoke S. 561-A, Cr.P.C., for quashing the proceedings pending before the Trial Court in exceptional circumstances.
JUDGMENT.---The Petitioner is facing trial in case FIR No. 170/2021 dated 8.4.2021 registered against him by Respondent No.2 at Police Station Khanqah Dogran for an offence under section 489-F, P.P.C. Respondent No.2 claims that the Petitioner purchased 11,250 kilograms of rice from him and gave Cheque No. CA55223496 for Rs.1,140,000/- to pay for it which was dishonoured on presentation. He alleges that the Petitioner dishonestly gave him a bad cheque. On 30.7.2021 the Petitioner moved an application under section 249-A, Cr.P.C. before the Judicial Magistrate for his acquittal claiming that the charge against him was groundless and there was no probability of his being convicted of any offence. The Judicial Magistrate dismissed that application on 3.12.2021 and his decision was upheld in revision by the Additional Sessions Judge, Sheikhupura, vide Order dated 15.1.2022. The Petitioner has now assailed the said orders before this Court through this petition under section 561-A, Cr.P.C.
2. The counsel for the Petitioner contends that Cheque No. CA55223496 is a "cash cheque" and not payable to any specific person. It is not a cheque within the meaning of section 6 of the Negotiable Instruments Act, 1881, so the Petitioner cannot be prosecuted under section 489-F, P.P.C. On merits the counsel submits that FIR No. 170/2021 is based on a false and a concocted story. The Petitioner neither purchased any rice from Respondent No.2 nor issued Cheque No. CA55223496 to him in consideration thereof. According to him, he gave that cheque to Husnain Mohsin as security in connection with a business project which they had conceived together. However, the proposal was abandoned half way and Husnain dishonestly passed over the cheque to Respondent No.2, his father, who misused it. The counsel adds that these facts were fully established during investigation.
3. The Deputy Prosecutor General has vehemently opposed this petition. He contends that Cheque No. CA55223496 is payable to bearer and the Petitioner's contention that section 489-F, P.P.C. is not applicable to such instruments is misconceived. On facts he states that the Petitioner handed over the aforementioned cheque to Respondent No.2 in the presence of PWs Muhammad Maalik and Muhammad Tahir who joined the investigation and got their statements recorded under section 161, Cr.P.C. in support of the prosecution case. The question as to whether they are truthful can only be determined at the trial after recording evidence. The learned Law Officer further contends that criminal cases are not decided on the basis of the opinion of the police. The court evaluates the evidence adduced before it and renders it's own decision. Hence, the Petitioner cannot plead for acquittal under section 249-A, Cr.P.C. on the basis of any finding of the Investigating Officer.
4. The counsel for Respondent No.2 has adopted the arguments of the Deputy Prosecutor General.
5. Arguments heard. Record perused.
6. The Petitioner is indicted under section 489-F, P.P.C. which reads as under:
489-F. Dishonestly issuing a cheque.---Whoever dishonestly issues a cheque towards repayment of a loan or fulfilment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to three years or with fine, or with both, (naeem)unless he 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.
7. It is important to point out that section 489-F, P.P.C. is not attracted to every dishonour of cheque. The following are the foundational elements to constitute the offence: (i) the cheque was duly issued; (ii) it was issued with dishonest intent; (iii) it was issued towards repayment of a loan or fulfilment of an obligation; and (iv) it was dishonoured on presentation. In Muhammad Sultan v. The State (2010 SCMR 806) the Hon'ble Supreme Court of Pakistan held that "fulfilment of an obligation" is a wide term and is inter alia applicable to all lawful agreements and contracts.
8. In the present case, Cheque No. CA 55223496 reads "Pay cash or bearer". The word "cash" has been written by hand. The first question that requires consideration is whether a "cash cheque", as the Petitioner calls it, is covered by section 489-F, P.P.C. and its dishonour would entail criminal liability. In order to answer this question we have to first see what is a cheque.
9. Section 6 of the Negotiable Instruments Act, 1881 (the "NIA"), defines "cheque" as follows:
6. "Cheque".--- A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
"Bill of exchange" is defined in section 5 of the Act so it is necessary to refer to it in order to understand the complete meaning of the "cheque". Relevant portion thereof reads as under:
5. "Bill of exchange".---A "bill of exchange" is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
Where the person intended can reasonably be ascertained from the promissory note or the bill of exchange, he is a 'certain person' within the meaning of this section and section 4, although he is misnamed or designated by description only.
…
Where the payee is a fictitious or non-existing person the bill of exchange may be treated as payable to bearer.
10. The above provisions show that cheque is a kind of bill of exchange though it has certain peculiarities. Our law is quite similar to the provisions of the Britain's Bills of Exchange Act, 1882.1 Since we have little jurisprudence on "cash cheque", we may benefit from the cases decided in U.K.
11. In North and South Insurance Corporation Limited v. National Provincial Bank Limited, [1936] 1 K.B. 328, the directors of the plaintiff company drew a cheque in the form "Pay cash or order"2 and delivered it to another company which obtained payment from the defendant bank without indorsing it. The plaintiff company went into liquidation and the liquidator claimed return of the money on the ground that the defendant bank had no authority to pay as it was never indorsed. The question before the Court was whether the said instrument was a cheque and, if so, whether it could be treated as having been drawn in favour of a fictitious or non-existent person (which did not require indorsement) and reckoned as a cheque payable to bearer. Branson J. held:
"I think that the words 'or to the order of a specified person' [in section 3(2) of the U.K.'s Bills of Exchange Act, 1882] mean that in order to constitute a document a bill of exchange it must contain an order directing the person on whom it is drawn to pay to a specified person. The present document, in the material part, reads, 'Pay cash or order.' 'Cash' cannot be described as a 'specified person.' If any authority is wanted for that it is to be found in Grant v. Vaughan,3 where a draft on a banker was worded 'Pay to ship Fortune, or Bearer,' and Lord Mansfield said:4 'There was no person originally named as the payee.' Wilmot J. said:5 'No person at all is named: it is 'pay to Ship Fortune, or Bearer'.' That case differs from the present, in that the words 'or bearer' were on the document in that case, and not 'or order' as in the present case. Mr. Tucker has contended, on the authority of Chamberlain v. Young,6 that the language of the document in this case ought to be construed as meaning 'Pay cash to my order,' or 'to me or my order,' but in my opinion, that case does not assist the plaintiffs, because there the bill was drawn payable 'to ___ order', without the word 'or.' In answer to an argument put forward that was not a bill of exchange it was pointed out by the Court of Appeal that the word 'or' did not appear in the document under consideration, and Lord Esher said7 that the bill 'is a perfect bill in every respect because it says 'Pay to ____ order,' not 'Pay to ____ or order.' In other words, it says: 'Pay to order,' and by the most common rules of construction that must mean 'Pay to my order'.' In the document here in question, there is the word 'or', the absence of which enabled the Court of Appeal in Chamberlain v. Young8 to decide that the document under consideration in that case was a bill of exchange."
The Court further said:
"It [The instrument] says: 'Pay cash or order.' It cannot have been intended that 'cash,' which is a purely impersonal collection of letters, should endorse this draft. That being so, I think the four words 'Pay cash or order' cannot be read so as to give any sensible meaning to the whole four, and the result is that the printed words 'or order' must be disregarded and we have a direction to pay cash - by necessary implication, to pay it to the bearer of the document."
12. In Cole v. Milsome, [1951] All ER 311, also the instrument read "Pay cash or order, the words "pay" and "or order" being printed and the word "cash" having been inserted in ink. The Court was asked to determine as to whether on its fair construction the expression "pay cash or order" is a payment to "the order of a specified person or to the bearer" within the meaning of section 3(1) of the Bills of Exchange Act, 1882. After pointing out that the case of North and South Insurance Corporation Limited, supra, had not dealt with the alternative requirement of the definition in section 3, that is, where the sum is payable to bearer, Lloyd-Jacob J. said:
"I have come to the conclusion, with some reluctance, that the language used in this document, namely, 'pay cash or order,' cannot fairly be construed as constituting a bill of exchange within section 3(1) of the Bills of Exchange Act, 1882."
13. In Orbit Mining and Trading Co. Ltd. v. Westminster Bank Ltd., [1963] 1 QB 794, the three instruments that were the subject of the dispute read "Pay cash or order." The Court of Appeal approved the above-mentioned two authorities and held that they were not cheques. Sellers L.J. wrote:
"In the light of these provisions, in my judgment, the three instruments in this case where the order is 'Pay cash or order' cannot be held to be cheques because they are not bills of exchange. They are not to or to the order of a specified person and they are not 'to bearer.' A subtle argument was addressed to us submitting that the effect of the instruction 'Pay cash or order' was to make payment to bearer and that is the meaning to be derived from the words and therefore the cheques were 'expressed to be so payable.' It is so easy, and indeed has for so long been customary, to make a clear payment to 'bearer' that I think the Act requires 'bearer' to be stated and that it does not apply to a possible implied or derived interpretation of the words used. 'Or order' in itself is in contrast to 'bearer,' although as 'cash' can give no order the effect is no doubt that it is equivalent to a payment to bearer.
"Section 7(3) expressly provides that 'where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer.' 'Cash' cannot be said to be a fictitious or non-existing person and it would be enlarging the provisions of the Act to read the bill as expressed to be payable to bearer where the payee is 'cash'."
(emphasis added)
14. Halsbury's Laws of India sums up the legal position as follows: "A negotiable instrument drawn in favour of 'cash or order' is not a bill of exchange. Where the payee's name is not filled in, it is open to any holder for value to write his own name in and sue on the instrument; but if his right to do so is contested, he must be prepared to prove that he was not acting outside the scope of his authority. In the hands of any subsequent holder in due course the instrument is valid and effectual for all purposes. Where a bill is in the form 'Pay to ___ order', and is indorsed in that form by the drawer, the bill is equivalent to one drawn 'pay to my order', and is a good bill. Where a bill is in the form 'Pay to ___ or order', and is accepted or indorsed while in that state, the effect is doubtful."
15. It may be noted that under the English law the payee must be a "specified person" while Pakistan's NIA of 1881 mandates that he must be a "certain person". This difference has no legal consequence as both the phrases have the same meaning.
16. Let's now turn to the case at hand. Here, it is observed, the instrument (Cheque No. CA55223496) is expressed thus: "Pay cash or bearer". Pakistani law - like the English law - expressly extends the definition of the term "bill of exchange" to the bearer of the instrument. The authorities discussed above are distinguishable because they deal with the instances where the instruments instructed the drawee bank to "pay cash or order". Importantly, in North and South Insurance Corporation Limited the learned Judge noted that the said case was distinguishable from Grant v. Vaughen decided earlier because "the words 'or bearer' were on the document in that case, and not 'or order' as in the present case."
17. The Petitioner has neither denied his signature on Cheque No. CA55223496 nor the fact that it is drawn on his account. He has challenged its validity on the premise that it does not conform to the requirements of section 5 of the NIA of 1881. In view of the above discourse, that contention is repelled.
18. The next ground which the Petitioner has urged in support of his application under section 249-A, Cr.P.C. is that the police have found his defence plea correct during investigation. This might help him during the trial but not at this stage. In Col. Shah Sadiq v. Muhammad Ashiq and others (2006 SCMR 276) the Hon'ble Supreme Court of Pakistan held that under the Code of Criminal Procedure, 1898 (the "Code"), the Investigating Officer has the mandate only to collect the evidence pertaining to the case he is investigating and to dig out the truth and then submit report in terms of section 173, Cr.P.C. The said report, however, is not a piece of evidence itself. In Muhammad Bashir v. Station House Officer Okara Cantt. and others (PLD 2007 SC 539) the apex Court held that the Investigating Officer has no authority to pronounce upon the guilt or innocence of a person. That power is vested in the courts which they exercise in accordance with law and the jurisprudence developed over time. If an Investigating Officer expresses any opinion as aforesaid, it is inadmissible in evidence.
19. Under section 118 of the NIA of 1881 there is statutory presumption that every cheque was made, drawn, indorsed and negotiated for consideration and that it's holder is a holder in due course - an expression which has been defined in section 9 as a person who for consideration becomes the possessor of a promisory note, or bill of exchange or cheque if payable to bearer, or the payee or the indorsee thereof, if payable to order, before it became due, without knowing that any defect existed in the title of the person from whom he derives his own title. In view of this provision, if the cheque says "pay cash" and the words "or bearer" are not scored off, the person in possession of the instrument would be presumed to be a holder in due course. In the instant case, Respondent No.2 enjoys the same presumption in respect of Cheque No. CA55223496 which can be rebutted at a regular trial where the parties have equal opportunity to adduce evidence to prove their respective claims and test the credibility of the witnesses of the other side through cross-examination. The sole opinion of the Investigating Officer cannot negate that presumption.
20. The parameters for exercise of jurisdiction by the magistrate under section 249-A, Cr.P.C. are now well settled. In Muhammad Muslim and another v. Muhammad Iqbal and 2 others (PLJ 2004 SC 2) the Hon'ble Supreme Court held that "section 249-A, Cr.P.C. is an exception to the normal rule that acquittal takes place after full trial. This provision reflects a compromise between the collective good of the society and the rights of an individual offender. The idea is to spare the offender the rigors of full trial if the court at any stage finds that the charge is groundless and the prosecution is not likely to succeed." I am afraid, this is not a case in which the provisions of section 249-A, Cr.P.C. can be invoked.
21. In law, section 561-A, Cr.P.C. does not confer an alternative or additional jurisdiction on the High Court.9 It merely preserves its inherent jurisdiction to enable it to make such orders as may be necessary to give effect to an order under the Code or to prevent the abuse of the process of any court or otherwise to secure the ends of justice.10 It cannot be used to stifle prosecution.11 The High Court should invoke section 561-A Cr.P.C. for quashing the proceedings pending before the trial court in exceptional circumstances.12 The Petitioner has failed to persuade this Court that it needs to exercise its inherent jurisdiction in the present case.
22. This petition has no merit and is, therefore, dismissed.
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