Cheque

Citation Name : 2007 SCMR 178 SUPREME-COURT
Side Appellant : Malik ATTA MUHAMMAD and another
Side Opponent : GOVERNMENT OF PUNJAB through Secretary, Local Government and Rural Development, Lahore
---S. 54(1)(1) & Second Sched. Part II, Cl. (5)---Cattle market---Auction of lease rights for collection fee---Holding of such auction by
Municipal Administration in a surreptitious and restricted manner---Nothing to show transparency or fairness in auction proceedings so as to
ensure participation of all intending bidders---Offer of higher bid by intending bidder---Validity---Duty of Municipal Administration was to
conduct such auction in a just, fair and transparent manner so as to ensure that such lease would fetch maximum public revenue---Supreme
Court, in order to safeguard public interest and excheque r, ordered re-auction of lease rights in an open, just and fair manner.
Side Appellant : PAKISTAN TOBACCO BOARD and another
Side Opponent : TAHIR RAZA
---Art. 199(1)(b)(ii)---Writ of quo warranto---Object and scope---Such writ is to inquire from a person, the authority of law under which he
purports to hold public office and it is primarily inquisitorial and not adversarial for the reason that a relator need not be a person aggrieved
but also that while a person is holding a public office without any legal warrant, he is taxing public excheque r besides causing injury to
others who may be entitled to that office---High Court, keeping in view the nature of such proceedings, can undertake such an inquiry as it
may deem necessary in the facts and circumstances of a particular case including examination of the entire relevant record---Such exercise
can be done suo motu, even if attention of High Court is not drawn by the parties concerned.
Citation Name : 2007 PLD 25 QUETTA-HIGH-COURT-BALOCHISTAN
Side Appellant : AGHA SHAHID HASSAN BUGTI
Side Opponent : FEDERATION OF PAKISTAN through Ministry of Interior, Government of Pakistan, Islamabad
--S. 11-B, E, H, O & Q---Constitution of Pakistan (1973), Art.199---Constitutional petition---Freezing of Bank accounts---Petitioner had
challenged validity of office memorandum issued by Ministry of Interior, whereby his Bank Accounts were freezed---Allegations against
petitioner was that he allegedly was member of a proscribed organization---Validity---Federal Government or competent Authority had been
authorized under S.11-E of Anti-Terrorism Act, 1997 to freeze accounts of proscribed organizations and not of individuals who were suspected
to be affiliated or associated with such proscribed organization---For individuals separate procedure had been laid down in Ss.11-0 & 11-Q of
Anti-Terrorism Act, 1997, wherein only Anti-Terrorism Court had been authorized to forfeit the money or other property of individuals upon
their conviction under S.11-H of Anti-Terrorism Act, 1997---Bank accounts of the petitioner, in the present case were not forfeited by Anti-
Terrorism Court nor he was tried or convicted by the Court, but under impugned notification issued by Ministry of Finance on the request of
Interior Ministry of exercising the powers purportedly under S.11-E of Anti-Terrorism Act, 1997 which did not confer powers on Federal
Government or any other Authority to freeze account of an individual---Allowing petition, it was declared by the High Court that directions to
freeze Accounts of petitioner were without lawful authority and of no legal effect---Banks were directed to honour the cheque s of petitioner
and make payment.
Citation Name : 2007 PCRLJ 41 QUETTA-HIGH-COURT-BALOCHISTAN
Side Appellant : MUHAMMAD RIAZ
Side Opponent : State

---Ss. 9(a)(iii)(iv), 10, 18(g) & 24(b)---Criminal Procedure Code (V of 1898), S.173---Appreciation of evidence---Sentence, reduction in--
Column No.2 of challan---Object---Person placed in Column No.2---Effect---Allegation against accused/appellant, a bank employee, was that
account-holders used to hand over their cheque s and cash to accused for the purpose of depositing the same in their respective accounts
but accused, instead of depositing cheque s/cash in respective accounts embezzled the same---National Accountability Court/Trial Court
convicted accused to suffer imprisonment for five years and to pay fine---Accused contended that Trial Court failed to appreciate the fact that
Branch Manager of the Bank was involved in commission of offence but his name was placed in Column No.2 of challan though sufficient
evidence was available on record against him and this act had caused great injustice and prejudice to accused; that investigation was not
carried out honestly and real culprits who were found guilty in Bank inquiry and consequently dismissed from service, were let off without any
reason; that affected account-holders had no valid deposit receipt slips of misappropriated amount---Validity---Report of hand-writing expert
confirmed that most of cheque s deposited by account-holders, which were encashed, bore signatures of accused---Bank Manager had been
placed in Column No.2 of challan, but it was not ascertainable as to why he was placed in Column No.2 when it had been specifically stated in
challan that both Bank Manager and the accused had embezzled the amount---Under law only those accused were to be placed in Column
No.2 against whom no sufficient evidence had come on record and it was left to Court to see whether he was to be summoned for trial or
not---Evidence on record showed that Bank Manager was prima facie involved in commission of offence---Audit report showed that instead of
cashier, Bank Manager used to receive cash on his table---Trial Court observed that Bank Manager was main culprit who allegedly used to
sign counterfoils of pay-in-slips and hand-over to customers, duly affixing bank round stamp by him, sending cash to cashier with fresh pay-
in-slip for credit of amount other than actual depositor's account---Prosecution submitted reference only against accused which meant that he
was made victim of selective prosecution---Accused being heart patient, it was appropriate to reduce sentence of imprisonment from five
years to that of 2-1/2 years---Amount of fine was to remain the same---Appeal dismissed on merits.
Citation Name : 2007 CLD 667 LAHORE-HIGH-COURT-LAHORE
Side Appellant : GHULAM NAZAK
Side Opponent : ZARAI TARAQIATI BANK OF PAKISTAN through Manager
---S.9-Bankers' Books Evidence Act (XVIII of 1891), S.4---Suit for declaration by plaintiff disclaiming to have obtained loan from Bank-Proof-
Onus was on Bank to prove that disputed loan was advanced to plaintiff----Bank did not produce original application of plaintiff for obtaining
of finance, sanction letter, finance agreement, cheque showing withdrawal of loan or any document securing finance-Even photocopies of
such documents were not placed on record---Un-attested documents produced by Bank relating to another loan account would have no
evidentiary value---Mutation allegedly securing finance by mortgaging land was not produced in evidence---Bank had not pleaded that
cheque through which disputed amount was allegedly withdrawn by plaintiff had been lost---Plaintiff could not be burdened with disputed
loan in absence of its record-- Bank had failed to prove that original record was lost---Mere oral assertion of Bank's witnesses would not be
enough to prove loss of record---Bank regarding loss of record had neither made report to its Regional Manager nor lodged F.I.R.--"Bank had
not obtained permission from Court to produce secondary evidence---Loss of record had not been proved, thus, secondary evidence, if led
any, would become valueless---Bank did not prove that plaintiff had obtained alleged loan from Bank---Suit was decreed against Bank in
circumstances.
Side Appellant : CRYSTAL SEEDS (PVT.) LTD. LAHROE through Chief Executive
Side Opponent : CRESCENT COMMERCIAL BANK LIMITED LAHORE through Branch Manager
---S. 10(3)(4)---Suit for recovery of bank loans---Application for leave to defend the suit---Defence established its case to the extent of part
of claim---Effect---Bank filed suit for recovery of amount along with compensation and cost of funds against defendants---Defendants filed
application for leave to defend the suit which was dismissed by Trial Court and suit filed by plaintiff was decreed--Defendants contended that
Trial Court had incorrectly invoked subsections (3)(4) of S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 as the same
had been complied with and there were triable issues requiring the recording of evidence, therefore, leave ought to have been granted in the
case-Validity-Record revealed that defendants had failed to make out a plausible defence with regard to certain unpaid overdue rental
amount---Balance claim of plaint g pertained to late payment charges and cheque return charges---Unpaid overdue rental amount was prima
facie a penalty---Balance claim of plaintiff pertaining to late payment charges and cheque return charges needed to be proved in evidence by
plaintiff---Plaintiff, in the facts and circumstances of the case, was entitled to an interim decree as to unpaid overdue rental amount along
with cost of funds and defendants were entitled to unconditional leave to defend the suit as, to balance claim of plaintiff---Appeal was
accepted accordingly.
Side Appellant : ABDUL RAUF
Side Opponent : FAROOQ AHMED
----Ss.6 & 29-C---Promissory note and cheque were negotiable instruments which could not be attested by witnesses and in case any
signature by stranger were appended thereupon the signing was to be presumed to have been made as indorser.
----Ss.6, 29-C & 35---Civil Procedure Code (V of 1908), O.XXXVII---Qanun-e-Shahadat (10 of 1984), Art.17(2)(a)---Evidence Act (I of
1872)---Stamp Act (II of 1899), S.2(5)(b)---Suit for recovery of money on basis of pro note---Promissory note not attested by marginal
witnesses--Article 17(2)(a) of Qanun-e-Shahadat, 1984, applicability to promissory note---Expression "any special law" mentioned in
Art.17(2)(a) of Qanun-e-Shahadat, 1984---Scope---Plaintiffs filed suit for recovery of money on the basis of pro note against defendant,
asserting therein that defendant had executed pro note along with receipt and an agreement in favour of plaintiffs---Defendant though denied
his liability to pay amount but admitted his signature/thumb-impression on pro note and receipt which according to him were obtained by
plaintiffs on blank papers---Defendant contended that pro note had not been witnessed by two marginal witnesses as required under Art.17 of
Qanun-e-Shahadat, 1984 and, therefore, no right to recover "any amount was to be based on the same---Trial Court decreed the suit and
appeal filed thereagainst by defendant was dismissed by Appellate Court---Validity---Receipt and agreement had been proved by marginal
witnesses---Defendant having admitted his signature and thumb-impression on pro note, burden of proof had shifted upon him to prove that
he had signed and thumb-marked on blank papers---Statements of marginal witnesses had not been shattered in cross-examination, nor any
motive was attributed to them that they were making false statements---Qanun-e-Shahadat, 1984, was a general law and expression "any
special law" appearing in Art.17(2)(a) of Qanun-e-Shahadat, 1984, meant special law dealing with special subjects which were existing at the
time of enforcement of the Qanun-e-Shahadat, 1984---Negotiable Instruments Act, 1881, was also a special law within meanings of Art.17(2)
(a) of Qanun-e-Shahadat, 1984-Under Ss.6 & 29-C of Negotiable Instruments Act, 1881, promissory note and cheque were negotiable
instruments which could not be attested by witnesses and in case any signature by stranger were appended thereupon, the signing was to be
presumed to have been made as indorser---Under S.35 of Negotiable Instruments Act, 1881, attestation of pro note by witnesses was
impermissible and could only be made by a stranger in capacity and status of an indorser---Under S.2(5)(b) of Stamp Act, 1899, if an
instrument, which otherwise might be a promissory note, but if attested by witnesses, it attained legal status of a bond and no more
remained a negotiable instrument---One of the important tests to determine whether an instrument was bond or promissory note, was
attestation of witnesses---Promissory note in question was not required to be attested by any witness and, moreover, when the same was
tendered in evidence by plaintiffs, no objection was raised by defendant---Promissory note had been proved by two marginal witnesses of
receipt---Appeal was- dismissed.
Citation Name : 2007 PLD 385 LAHORE-HIGH-COURT-LAHORE
Side Appellant : Messrs AKBAR BROTHERS through Managing Partner---Appellant
Side Opponent : M. KHALIL DAR through Legal Heirs
---Ss. 2(c)(d), 13 & 15---Default in payment of rent---Denial of relationship of landlord and tenant-'Landlord'-Meaning-Power of attorney
given by principal (owner of property) to agent/attorney---Death of principal---Effect---Second appeal in rent matter---Scope---Landlord filed
ejectment petition against tenant on ground of default in payment of rent---Tenant denied relationship of tenancy and stated that property in
question was owned by a lady not by applicant/landlord who had only rented out property to tenant as an agent/attorney for the lady and
that relationship of landlord and tenant only existed between tenant and the lady and not with the agent---Rent Controller accepted
ejectment petition and appeal filed thereagainst was dismissed by lower Appellate Court---Legal heirs/representatives of deceased landlord
(principal), after his death, moved an application to be impleaded as party which was objected to by tenant contending that they were not
legal representatives because property was owned by the landlady and legal heirs of attorney could not be so arrayed---Tenants argued that
the present appeal was incompetent because property in question was residential bungalow and second appeal under law had only been
provided for non-residential property---Validity---Property in question was rented out by attorney of the lady to tenant and physical
possession was also handed over to the latter by the former---Tenant had been making payment of rent to attorney of the lady---No
document had been produced by tenant to show that tenancy was in the name of the lady and it was she who was entitled to receive rent
from him---Even cheque was issued in the name of son of deceased (attorney) which was dishonoured and a letter was also addressed by
tenant to the attorney (son of deceased applicant)---Statements of applicant's witnesses as to factum of tenancy were not crossed by tenant
in spite of availing opportunities to that effect---Deposition made in examination-in-chief, if not subjected to cross-examination, were to be
deemed to have been admitted---Such statements once admitted by tenant, no stance could be maintained by him about lack of tenancy with
attorney of the lady---Evidence of tenant was stereotype in nature and affidavits seemed to have been prepared by someone else and
contained the same language---Affidavits were even beyond the scope of pleadings set out in written reply---Affidavits when read in
conjunction with cross-examination, the plea of tenant stood defeated because in cross-examination it was admitted by tenant himself and his
witnesses that property was procured on rent from attorney of the lady and rent was being paid to him---Facts were quite adequate to
establish tenancy and its denial seemed to be contumacious and was propounded to take advantage of absence of actual owner of property
from Pakistan---To be a landlord of property, it was not necessary that person should also be the owner, rather he should be entitled to
receive rent for the time being---Word "landlord" was not limited to true owner but included an agent, trustee, guardian, receiver, executor
and administrator receiving rent on behalf of owner and any person who might be entitled to receive rent for the time being on his own
account---Contention of the tenant that on account of death of the lady, the general power of attorney formerly executed in favour of her son
and special power of attorney in favour of applicant landlord stood revoked and therefore applicant landlord ceased to be agent of owner and
could not sustain and pursue ejectment application, had no relevance because it was applicant who was landlord of property and irrespective
of the question whether power of attorney given to him had lost its efficacy or stood annulled on account of death of principal, he continued
to be landlord of property as far as present tenancy was concerned---Applicant when had been held to be landlord of tenant obviously his
legal representatives would be legally entitled to be substituted after his death---Objection of landlord that present appeal was incompetent
because property in question was a residential bungalow and second appeal under law had only been provided for non-residential property
had no force because property was rented out to tenant for commercial purpose and in terms of S.2(d) of the West Pakistan Urban Rent
Restriction Ordinance, 1959, it was non-residential building regarding which second appeal could be competently filed---Appeal was
dismissed.
Citation Name : 2007 YLR 1277 LAHORE-HIGH-COURT-LAHORE
Side Appellant : MEHTAB ALI
---S. 497---Penal Code (XLV of 1860), S.489-F---Bail, grant of---Amount of cheque in question had not been mentioned in the F.I.R. at all---
cheque in question was issued about three months prior to reporting of matter to the police---Neither the cheque issued by accused nor its
attested copy was available on record of the case and no Bank Officer had been cited as witness---Accused was admitted to bail, in
circumstances.
Side Appellant : MUHAMMAD AKMAL KHAN
---S. 497---Penal Code (XLV of 1860), Ss.468, 471, 420 & 489-F---Bail, grant of---F.I.R. lodged with delay of four years---Litigation existed
between parties---Allegation against accused/petitioner was that he along with co-accused told complainant that on payment of certain
amount government land would be allotted in his favour---Complainant alleged in F.I.R. that despite payment of amount to accused, no land
was got allotted to him, and when matter was reported to Punchayat accused gave to complainant cheque s which were later on'
dishonoured---Complainant further alleged that accused also issued forged receipt of bank to him about depositing of money regarding
allotment of land in his favour---Post-arrest bail of accused was dismissed by Trial Court---Accused contended that there was delay of four
years in lodging of F.I.R.; that there was no signature on cheque s and allotment letter allegedly issued in favour of complainant and also on
receipt of bank; that complainant himself was involved in case registered under S. 489-F, P.P.C.---Validity---F.I.R. had been lodged against
accused and co-accused after delay of four years and offence under Ss.468, 471 & 420, P.P.C. had been added later on---Offence under
Ss.468 & 471, P.P.C. were non-cognizable---Receipts allegedly issued by bank did not bear signature of accused---Offences alleged against
accused under Ss.468, 471 & 420, P.P.C. did not fall within prohibitory clause of S.497, Cr. P. C. ---Complainant himself was involved in case
registered under S.489-F, P.P.C. which showed that there was litigation between parties---Sufficient reasons were available to believe false
involvement of accused in commission of offence which brought his case within ambit of further inquiry---Pre-arrest bail of co-accused had
been confirmed by High Court, hence, rule of consistency was attracted to case of accused as his case was at par with the co-accused---
Detention of accused for indefinite period was not to serve any useful purpose---Accused/petitioner was admitted to post-arrest bail.
Side Appellant : MUHAMMAD ILYAS
---S. 498---Penal Code (XLV of 1860), Ss.161, 409 & 420---Prevention of Corruption Act (II of 1947), S.5(2)---Pre-arrest bail, confirmation
of---Offence against accused under Ss.161 & 420, P.P.C. were bailable---Accused being not a public servant, his alleged connection with the
offences under S.409, P.P.C. and S.5(2), Prevention of Corruption Act, 1947 was indirect at the best---Accused according to prosecution, had
received 269 gunny bags which he had allegedly misappropriated and in order to compensate for the same he had issued a cheque which
was subsequently dishonoured, but prosecution remained unable to refer any particular document to prove alleged misappropriation of said
gunny bags---Said cheque had not been issued in favour of relevant department or in favour of any official of relevant .department, but had
been issued in favour of `self'---Issuance of said cheque by accused and its connection with allegation levelled against him was a matter
which called for further probe---Accused was not named in the main narrative of the F.I.R. and no allegation whatsoever had been levelled
against him. therein---Accused had been implicated in the case during inquiry proceedings and in that inquiry the role allegedly played by
accused in the entire transaction had, prima facie, failed to travel beyond mere sketchy allegations---Plea regarding mala fide implication of
accused in the case, was not without any foundation or substance---Investigation of the case had already been finalized and challan had also
been submitted before the Trial Court---Physical custody of accused, in circumstances, was not required by Investigating agency---Ad interim
pre-arrest bail already allowed to accused, was confirmed, in circumstances.

Side Appellant : TAHIR RASHID
---S. 489-F---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Quashing of orders---Investigation in the case had prima
facie been conducted mala fide and cancellation report of F.I.R. was prepared merely relying upon the version of respondents/accused party
that cheque in question was issued only as a guarantee for a person who had dealing with complainant/petitioner---cheque in dispute had
been issued by respondent in favour of petitioner, which was presented before the Bank, twice, but same was dishonoured each time due to
insufficiency of funds and prima facie offence under S.489-F, P.P.C. was made out---Whether cheque in dispute had been issued as a
guarantor or towards repayment of a loan or fulfilment of an obligation required recording of evidence and it was the function of the Court to
decide whether there was some element of dishonesty on the part of executant of the cheque ---Magistrate had agreed with the police report
through impugned order in a mechanical manner and he appeared to have not applied judicial mind to consider the facts of the case---
Impugned order though was an executive order, but Magistrate was to pass speaking order and he, in no way, was bound by the police
opinion to agree with the same---Police opinion was not binding on the Court---Magistrate did not properly exercise jurisdiction vested in him,
which had rendered impugned order illegal and without jurisdiction---High Court being competent to interfere therewith, constitutional
petition was accepted and impugned order was set aside, with direction to remand case to Magistrate, who would pass fresh orders on
cancellation report, submitted by the police within specified period.
Side Appellant : SHABBIR AHMAD ALVI
Side Opponent : Haji ABDUL MAJEED
--O.XXXVII, Rr.2,3---Suit for recovery of amount on basis of cheque ---Application for leave to appear and defend suit---Application to
appear and defend suit was dismissed by the Trial Court and suit was decreed---Validity---No plausible defence at all having been disclosed
by appellant in his application to appear and defend suit, his application was rightly dismissed---Ground taken by appellant during arguments
in appeal, was neither taken by appellant in his application for leave to appear and defend nor same was incorporated in the memorandum of
appeal---Same could only he termed to be an afterthought---Appeal, was dismissed, in circumstances.
Side Appellant : Ch. JAVED MAHMOOD
----Ss. 497 & 87--Penal Code (XLV of 1860), Ss.406 & 489-F---Bail after arrest, grant of-Dishonoured cheque ---Pendency of civil suit
between the parties---Civil and criminal proceedings to continue side by side---Scope---Allegation against accused/petitioner was that he
allegedly issued a cheque of certain sum in favour of complainant which on presentation to bank was dishonoured---Accused contended that
he was involved in the case on account of an F.I.R. which he had lodged against complainant; that matter was of civil nature and a suit in this
regard had been filed by complainant against accused and that offence mentioned in F.I.R. did not fall in prohibitory clause of S.497, Cr.P.C.-
Validity-Accused was named in F.I.R. and specific role of issuing cheque in favour of complainant had been assigned to him which on
presentation to bank was dishonoured---During police investigation accused was found fully involved in crime alleged against him---Challan
had been submitted before Court and prosecution evidence had been summoned---Proceedings under S.87, Cr.P.C. had been initiated by Trial
Court---Accused, moreover, was habitual offender as six cases of similar nature stood registered against him---Civil and criminal proceedings
could continue side by side---Contention of accused that cheque from cheque book of accused was procured by third person on behalf of
accused in connivance with complainant was baseless as no complaint or F.I.R. was lodged by him in this regard---Petition was dismissed.
Side Appellant : MUHAMMAD JAVED

--S. 498---Penal Code (XLV of 1860), S.489-F---Pre-arrest bail, refusal of---Scope of pre-arrest bail was limited---Court had to see, if there
was prima facie, no ground to implicate accused or accused had been involved mala fide---Accused, in the present case, lodged a report with
the police, but failed to inform Manager of the Bank regarding theft of the cheque book---Story of accused, in circumstances seemingly was
not palpable---Rapt of theft of cheque book was lodged on 23-8-2004, but occurrence took place after two years thereafter---1f somebody
had stolen the cheque book in August, 2004, he would have used same much earlier than in case of present occurrence---Bail application
was dismissed, in circumstances.
Side Appellant : MUHAMMAD ILYAS
Side Opponent : MUHAMMAD SHAFIQUE RAMAY
----O.XXXVII, R.2---Suit upon negotiable instrument i.e. cheque ---Counsel for the parties had no objection, if the suit for cancellation of the
cheque s, filed by the petitioner pending before Civil Court, was withdrawn from that Court and was entrusted to the Court of Add: District
Judge; where suit under O.XXXVII, R.2, C.P.C. filed by respondent for recovery of amount on the basis of same cheque was pending---
District Judge concerned, was directed to consolidate both the suits and proceedings would be conducted in the suit filed by respondent---
Petitioner would have full opportunity to produce his evidence according to law.
Side Appellant : ASIF JAVED
Side Opponent : GHULAM SHABBIR
----O.XXXVII, Rr.2 & 3---Suit for recovery of amount on basis of cheque s---. Leave to appear and defend suit---Application filed by
defendants seeking leave to appear and defend suit had been dismissed by the Trial Court---Validity---Leave to appear and defend suit
ordinarily was to be granted unless defence set up was a sham---In the present case, it was not possible to hold that defence set up by
defendants was frivolous and incapable of proof---Leave to defend suit, in circumstances should have been allowed to defendants however,
considering that business dealings with plaintiffs were admitted by defendants and they also did not deny execution of cheque s in question,
grant of leave should be subject to conditions which would ensure that plaintiffs were properly secured and they would get adequate value of
money, if at the end of the day they would succeed in their suit---Appeal was allowed, impugned decree was set aside subject to the terms
that defendants would be allowed leave to defend suit subject to deposit of the suit amount in cash with the Trial Court within specified
period.
Side Appellant : HARAPPA TEXTILE MILLS LIMITED
Side Opponent : Messrs B.A.S.F. PAKISTAN (PVT.) LIMITED
---O.XXXVII, Rr.2 & 3---Contract Act (IX of 1872), Ss. 73 & 74---Suit for recovery of amount on basis of cheque ---Non-filing of application
for leave to appear and defend suit by defendant---Claim for mark-up/ compensation and legal and other expenses---Suit filed by plaintiff for
recovery of amount plus 20% mark-up/ compensation on amount of cheque and 5% legal and other expenses, was decreed ex parte against
defendant; however, on filing application of defendant, ex parte decree was set aside, but defendant did not file application for leave to
appear and defend suit after setting aside of ex parte decree---Decree as prayed for by plaintiff was passed . by the Trial Court---Defendant
claimed that a composite application was filed for setting aside ex parte decree and for grant of leave to appear and defend the suit, but said
application was not available on record---Copy of alleged application produced by counsel of defendant did not mention the grounds for grant
of leave to appear and defend suit---All the grounds taken by defendant in said application were regarding setting aside the ex parte
decree---In the absence of any application for grant of leave to appear and defend the suit contents of the plaint were deemed to be admitted
and plaintiff was entitled to a decree---Nothing was available on record that plaintiff suffered any loss due to the breach of contract and no
agreement between the parties had been placed on record, for recovery of reasonable compensation under S.74 of Contract Act, 1872---
Alleged compensation claimed by plaintiff, appearing to be in the nature of liquidated damages, same could not be awarded without any proof
of loss---Judgment and decree to the extent of compensation/mark-up 20% and legal expenses 5% was set aside and decree for recovery of
original amount of cheque was upheld.
Citation Name : 2007 PCRLJ 388 LAHORE-HIGH-COURT-LAHORE
Side Appellant : Dr. MUHAMMAD RAMZAN AZAM
Side Opponent : ARIF ALI
---Ss. 497(5) & 498---Penal Code (XLV of 1860), Ss.419, 420, 467, 468, 471 & 489-F---Bail, cancellation of---No role whatsoever was
attributed to co-accused in whole of the F.I.R. and investigation---Application for cancellation of bail filed by petitioner/complainant to the
extent of co-accused, was dismissed---Prosecution evidence revolved around accused who was main culprit in the case---Accused went to
petitioner/complainant and asked him to purchase plot in question by introducing another co-accused as actual owner of plot in question---
Accused was the person who had issued cheque to complainant, but when complainant went to get said cheque encashed, he was told by
the Bank that account of accused had been closed---Accused was granted bail before arrest---Validity---Consideration for grant of bail before
arrest was totally different from bail after arrest---Trial Court had granted bail to said accused on surmises and conjectures---No case for
grant of bail before arrest having been made out to the extent of accused, application for cancellation of bail to his extent was accepted and
bail granting order was recalled accordingly.
Citation Name : 2007 PCRLJ 100 LAHORE-HIGH-COURT-LAHORE
Side Appellant : FARRUKH HAMEED
---S. 497---Penal Code (XLV of 1860), S.489-F---Bail, grant of---Accused issued a cheque as earnest money to complainant, which prima
facie was not an obligation---Real intention of the parties with regard to the agreement would be determined by the Trial Court after
recording evidence---Offence for which accused was charged, did not fall under prohibited clause of S.497, Cr.P.C.---Accused was behind the
bars and no more required for further investigation---To keep accused behind the bars for an indefinite period would not serve any useful
purpose---Accused was admitted to bail, in circumstances.
Citation Name : 2007 MLD 542 LAHORE-HIGH-COURT-LAHORE
Side Appellant : Major (R) IJAZ AZIZI
Side Opponent : MUHAMMAD SHAHZAD HANIF
---S. 17(8)---Tentative rent order, non-compliance of---Ejectment---Tenant who failed to comply with tentative rent order contended that
factum of the rate of rent of Rs.8,000 per month was evident from admitted lease agreement hence order for deposit of Rs.35,000 per month
was perverse and arbitrary, and no order of ejectment could be passed for non-compliance thereof---Validity---Held, although initial rate of
rent as agreed upon by both the parties was Rs.8,000 per month but subsequent lease deed and bank record proved that rent of premises
was enhanced to Rs.40,000 per month---Prima facie the said amount of Rs.40,000 was paid through cheque s by tenant---Fixation of
tentative rent under section 17(8) of the Cantonments Rent Restriction Act, 1963 did not appear to be arbitrary or perverse---Tenant was
legally bound to comply with said order and in case of non-compliance Rent Controller had no other option but to order tenant's ejectment---
No illegality or jurisdictional defect was pointed out in the order in question---Appeal was dismissed.
Side Appellant : Haji FAIZ MUHAMMAD
Side Opponent : MINES LABOUR WELFARE COMMISSIONER
---Art. 199----Constitutional petition---Auction---Grant of contract for collection of excise duty on minerals to highest bidder---Offer made
after conclusion of auction---Procedure prescribed for awarding of contract was followed---Petitioner sought cancellation of grant of contract
for collection of excise duty on minerals for a period of one year made in favour of respondent for total sum of Rs.35,00,000 as according to
him the said contract had been made in surreptitious and clandestine mam1er---Petitioner made an offer to the tune of Rs.70,00,000---
Respondent contended that contract had been awarded to him in a transparent manner through open auction and allegation of underhand
deal was incorrect; that petitioner had filed constitutional petition with mala fide intention and ulterior motive and that though contract was
awarded to petitioner for Rs.35,00,000 but he was ready to enhance the amount of contract to Rs.60,00,000---Validity---Admittedly,
petitioner had never participated in proceedings conducted by Department for auction of contract and only had come to the court with claim
to obtain contract for Rs.70,00,000 after completion of proceedings in favour of respondent---Earlier bidders who stood highest with Rs.50
lac, 51 lac and 55.25 lac respectively in previous year, had not deposited 10% security with fall of hammer as per requirement of Rules and
defaulted themselves and earnest money of each bidder was forfeited by Government---Contract had been granted to respondent being the
highest bidder through open auction conducted for consideration of Rs.35 lac after completion of all codal formalities regarding deposit of
10% of bid money with fall of hammer and deposit of 50% after approval/confirmation by Government and execution of agreement---
Petitioner had failed to give any reasonable explanation that how he was aggrieved by action of the officials for awarding contract to
respondent or the proceedings were tainted with mala fides except that it was auctioned at low rate and that petitioner was ready to offer
Rs.70 lac for the same contract---Respondent had enhanced bid amount to reasonable extent as Rs.60 lac which was more than earlier
offered by other bidders who had not come forward for finalisation of contract--Offer made by outsider after conclusion of auction was quite
attractive, yet its acceptance would have not only made a mockery of procedure prescribed for awarding contracts but opened floodgate of
litigation being a blatant abuse of discretion---Respondent had enhanced bid amount and it could not be said that any substantial loss was
likely to be caused to public excheque r by awarding of contract to respondent as compared with previous rates---Authorities having
explained that rate of said contract for previous year was Rs.15.33 lac only and respondent (bidder) had enhanced bid amount to Rs.60 lac,
hence, there was no reason to proceed further with constitutional petition---Constitutional petition was dismissed.
Citation Name : 2007 CLC 200 LAHORE-HIGH-COURT-LAHORE
Side Appellant : MUHAMMAD AMIN
Side Opponent : NASIR MEHMOOD
---O. XXXVII & Rr.2, 3 & O.IX, R,13---Suit for recovery of amount on basis of cheque ---Leave to appear and defend suit---Ex parte decree,
setting aside of---Defendant did not appear before the Trial Court, despite case was repeatedly called and finally ex parte order was passed
against defendant and case was adjourned for ex parte evidence of plaintiff---After recording ex parte evidence of plaintiff and witnesses
produced by him in proof of his claim, case was adjourned for next date of hearing---Application filed by defendant for setting aside ex parte
proceedings, was dismissed by the trial Court and impugned judgment and decree were passed---Defendant had failed to furnish sufficient
ground for setting aside ex parte order---Parties were duty bound and obliged to be vigilant of their rights, but defendant himself was not
vigilant---Defendant, in circumstances was not entitled to get the benefit of his own misdeed and negligence--Leave to appear and defend
suit having not been granted to defendant, impugned judgment-and decree were in accordance with provisions of law---Proceedings initiated
under O.XXXVII, C.P.C., which contained entire mechanism and procedure, had to be looked into within four corners of O.XXXVII, C.P.C.---
Defendant having failed to bring on record special circumstances for setting aside ex parte order, application for setting aside same was
dismissed by the Trial Court on the basis of which impugned ex parte judgment and decree had been passed by the Trial Court---In absence
of any infirmity or illegality in the impugned judgment and decree of the Trial Court, appeal against impugned order and decree, was
dismissed.
Side Appellant : SHAH AHMAD KHAN
Side Opponent : GOVERNMENT OF PUNJAB through Chief Secretary, Punjab
--Art. 199--Constitutional petition---Illegal appointments of Advisors---Termination of---Appointments of Advisors to Government of Punjab

were held to be illegal and unconstitutional and their appointments from very inception were without jurisdiction---Advisors had no right to
receive salary and enjoy perks from Government excheque r and out of public money---High Court, however, refrained from passing any
order for reimbursement of 'amounts so received by Advisors to the Government of Punjab.
Side Appellant : Sardar SHAFIQ HYDER KHAN LAGHARI
Side Opponent : Syed TASNEEM NAWAZ GARDEZI
---O. XXXVII, R.2(1)---Qanun-e-Shahadat (10 of 1984), Art.79---Negotiable Instruments Act (XXVI of 1881), S.13---Suit for recovery of loan
based upon a negotiable instrument, the original of which was lost---Maintainability---Words "all suits upon" in O.XXXVII, R.2(1), C.F.C. did
not indicate that a recovery suit based on any photocopy of admissible pro note was not entertainable---Rule did not say that where pro
note/cheque /Hundi or any other kind of negotiable instrument in original form is not available, or has been destroyed, misplaced, damaged
or lost, it would not be called suit having not been instituted on basis of negotiable instrument---Loss of an original pro note or inadmissibility
of negotiable instrument was a matter of evidence hence could not be made a ground for rejection of plaint before recording evidence in the
suit---If a negotiable instrument was lost, destroyed and misplaced suit shall retain its nature to have been based upon negotiable instrument
but the procedure for proof of such a document would be different and was to be determined in accordance with Qanun-e-Shahadat, 1984
through the secondary evidence---Suit would remain founded on a pro note even if negotiable instrument invalid according to law, was
inadmissible in evidence or has been executed or not according to law of the land or required proof through primary and secondary
evidence---Where a negotiable instrument became inadmissible in evidence due to some reasons, the party could turn to its original
consideration if that course was permitted by law in a given case.
----O. XXXVII---Qanun-e-Shahadat (10 of 1984), Art.17(2)(a)---Negotiable Instruments Act (XXVI of 1881), Ss.6, 29-C & 35---Evidence Act
(I of 1872)---Stamp Act (II of 1899), S.2(5)(b)---Suit for recovery of money on basis of pro note---Promissory note not attested by marginal
witnesses---Article 17(2)(a) of Qanun-e-Shahadat, 1984, applicability to promissory note---Expression "any special law" mentioned in
Art.17(2)(a) of Qanun-e-Shahadat, 1984---Scope---Plaintiffs filed suit for recovery of money on the basis of pro note against defendant,
asserting therein that defendant had executed pro note along with receipt and an agreement in favour of plaintiffs---Defendant though denied
his liability to pay amount but admitted his signature/thumb impression on pro note and receipt which according to him were obtained by
plaintiffs on blank papers---Defendant contended that pro note had not been witnessed by two marginal witnesses as required under Art.17 of
Qanun-e-Shahadat, 1984 and, therefore, no right to recover any amount was to be based on the same---Trial Court decreed the suit and
appeal filed thereagainst by defendant was dismissed by Appellate Court---Validity---Receipt and agreement had been proved by marginal
witnesses---Defendant having admitted his signature and thumb impression on pro note, burden of proof had shifted upon him to prove that
he had signed and thumb-marked on blank papers---Statements of marginal witnesses had not been shattered in cross-examination, nor any
motive was attributed to them that they were making a false statements---Qanun-e-Shahadat, 1984, was a general law and expression "any
special law" appearing in Art.17(2)(a) of Qanun-e-Shahadat, 1984, meant special law dealing with special subjects which were existing at the
time of enforcement of the Qanun-e-Shahadat, 1984---Negotiable Instruments Act, 1881, was also a special law within meanings of Art.17(2)
(a) of Qanun-e-Shahadat, 1984---Under Ss.6 & 29-C of Negotiable Instruments Act, 1881, promissory note and cheque were negotiable
instruments which could not be attested by witnesses and in case any signature by stranger were appended thereupon, the signing was to be
presumed to have been made as indorser---Under S.35 of Negotiable Instruments Act, 1881, attestation of pro note by witnesses was
impermissible and could only be made by a stranger in capacity and status of an indorser---Under S.2(5)(b) of Stamp Act, 1899, if an
instrument, which otherwise might be a promissory note, but if attested by witnesses, it attained legal status of a bond and no more
remained a negotiable instrument---One of the important tests to determine whether an instrument was bond or promissory note, was
attestation of witnesses---Promissory note in question was not required to be attested by any witness and, moreover, when the same was
tendered in evidence by plaintiffs, no objection was raised by defendant---Promissory note had been proved by two marginal witnesses of
receipt---Appeal was dismissed.
--Ss.6 & 29-C---Promissory note and cheque were negotiable instruments which could not be attested by witnesses and in case any
signature by stranger were appended thereupon the signing was to be presumed to have been made as indorser.
Citation Name : 2007 CLD 262 KARACHI-HIGH-COURT-SINDH
Side Appellant : MUHAMMAD UMER
Side Opponent : COLLECTOR OF COUSTOMS, KARACHI
---Art. 199---Constitutional petition---Auction of public goods---Acceptance of respondent bid of Rs.15,150 by members of Auction Committee
as against petitioner's offer of Rs.18,000---Validity---Such bid could not be accepted as transparent and honest process of auction resulting in
loss of public revenue--Intervention of High Court would be required in such case to save loss to public excheque r---High Court accepted
constitutional petition and allowed petitioner to take delivery of goods at such offered price.
Side Appellant : Messrs SHAMS AND BROTHERS
Side Opponent : GOVERNMENT OF PAKISTAN
---Ss. 10 & 37---Constitution of Pakistan (1973), Art.199---Constitutional jurisdiction of High Court---Scope---Invitation of bids/offers---
Highest offer not accepted---New conditions having no nexus with purpose and nature of contract---Ulterior motive and mala fide of tendering
authority---Petitioner, a registered partnership firm, filed constitutional petition against respondents to the effect that one respondent being a
corporate body under administrative control of Government of Pakistan, invited bids/offers to run and maintain Marriage Lawns on built,
operate and transfer basis at a certain plot---Petitioner's offer being the highest was accepted by respondent who verbally asked petitioner to
start development work at the site---Respondent then cancelled petitioner's offer on ground that on assessment and verification of business
profile and experience of petitioner, it was found unsatisfactory---Fresh offers, thereafter, were invited by the corporate body with addition of
new set of conditions and qualifications---Petitioner again stood as the highest bidder but respondent with ulterior motive did not accept
petitioner's bid, but contemplated to award contract to another party with meagre offer---Petitioner contended; that due to nepotism,
favouritism and underhand dealing between respondents and the party and in order to harm interest of petitioner and also to cause huge loss
to public excheque r, his highest offer was rejected by respondent; that first highest bid of petitioner had been accepted by respondent who
even encashed pay order deposited by petitioner; that in second invitation of tenders certain uncalled for and unreasonable conditions were
incorporated to ensure that petitioner was kept out of process due to non fulfilment of flimsy conditions and qualifications---Respondents
argued that petitioner had no resources available with it, therefore due to non-meeting of minimum requirement of bid, respondent was fully
justified in rejecting its highest bid; that mere highest bid of a party was not to give it locus standi to challenge rejection of its bid and that
petitioner firm was not member of Chamber of Commerce and Industry---Validity---Transparency in process where doubted and mala fides or
ulterior motive to oblige any particular party to cause financial loss to public excheque r was alleged, the powers of High Court under Art.199
of the Constitution could be invoked and exercised to examine such aspects and to undo such wrongs to avoid financial loss to excheque r
due to acts of misdeed, collusion or favouritism by individuals involved in such process--Court was not to sit as silent spectator to approve
underhand devices, aimed to eliminate one party and to accommodate another, causing heavy financial loss to the excheque r---Terms and
conditions imposed by respondent for awarding contract were to have nexus with nature of contract and its objectives---Security deposit paid
by petitioner and encashed by respondent gave strong presumption in favour of petitioner that his highest bid was accepted, being in
accordance with specified terms and conditions and to the satisfaction of respondents---Petitioner was vigorously pursuing its case for
execution of final agreement in its favour but respondent was putting up new conditions beyond scope of terms and conditions provided in
advertisement just to frustrate claim of petitioner---Substantial difference existed between petitioner's offer and second highest offer of other
party which aspect put heavy burden on respondent to justify his action of non-acceptance of petitioner's highest offer---Ulterior motive and
mala fide of respondents was clear from comparison of contents of their two advertisements for invitation of offers as a number of additional
conditions and qualifications were incorporated in second advertisement which had no nexus with purpose and objective of respondent which
were solely to get maximum financial benefits for public excheque r---For establishing and managing a marriage hall on built, operate and
transfer basis, an experience of minimum five years in relevant field was not much relevant from point of view of respondent who after award
of contract were to be concerned only with receipt of maximum monthly income---Petitioner though was member of Chamber of Commerce
and Industry but such registration was not that much material as the same could have been obtained by petitioner later on---Respondents
could not give a satisfactory reply to query that why several additional technical terms and conditions were incorporated in second tender
notice which did not find place in the first advertisement--Acceptance by respondent of offer of other party and awarding contract to the latter
was illegal, without lawful authority and of no legal effect---Respondent was directed by High Court to invite fresh bids/offers for granting
lease of plot for purpose of marriage lawn by incorporation of only such conditions which were available in first advertisement and were
necessary to safeguard their interest properly---Constitutional petition was accepted.
Citation Name : 2007 YLR 541 KARACHI-HIGH-COURT-SINDH
Side Appellant : GHULAM HAIDER JAMRO
Side Opponent : CHAIRMAN, NAB
---Ss.497, 498 & 561-A---National Accountability Ordinance (XVIII of 1999), S.9(b)---Constitution of Pakistan (1973), Art.199---
Constitutional petition---Maintainability---Bail, refusal of---Petitioners had been assigned the pivotal role in commission of crime and had been
recently sent up for trial before Accountability Court through reference---Prima facie prosecution had shown involvement of accused in the
commission of crime causing huge financial loss to the national excheque r---Jurisdiction of High Court under Art.199 of the Constitution to
grant bail to accused involved in NAB cases, though was not barred by virtue of S.9(b) of National Accountability Ordinance, 1999, but before
exercising said jurisdiction the High Court had to see; whether such powers should be exercised so liberally as to totally nullify and make
provisions of S.9(b) of the Ordinance, redundant; which on one hand made all the offences triable by the Accountability Courts non-bailable;
and on the other hand barred applicability of Ss.497, 498 & 561-A, Cr. P. C. by the courts for grant of bail to accused involved in such
cases---Relief of bail could not be granted to petitioners in circumstances.
Citation Name : 2007 YLR 161 KARACHI-HIGH-COURT-SINDH
Side Appellant : Messrs SHAMS
Side Opponent : GOVERNMENT OF PAKISTAN

---Ss. 10 & 37---Constitution of Pakistan (1973), Art.199---Constitutional jurisdiction of High Court---Scope---Invitation of bids/offers---
Highest offer not accepted---New conditions having no nexus with purpose and nature of contract---Ulterior motive and mala fide of tendering
authority---Petitioner, a registered partnership firm, filed constitutional petition against respondents to the effect that one respondent being a
corporate body under administrative control of Government of Pakistan, invited bids/offers to run and maintain Marriage Lawns on built,
operate and transfer basis at a certain plot---Petitioner's offer being the highest was accepted by respondent who verbally asked petitioner to
start development work at the site---Respondent then cancelled petitioner's offer on ground that on assessment and verification of business
profile and experience of petitioner, it was found unsatisfactory---Fresh offers, thereafter, were invited by the corporate body with addition of
new set of conditions and qualifications---Petitioner again stood as the highest bidder but respondent with ulterior motive did not accept
petitioner's bid, but contemplated to award contract to another party with meagre offer---Petitioner contended; that due to nepotism,
favouritism and underhand dealing between respondents and the party and in order to harm interest of petitioner and also to cause huge loss
to public excheque r, his highest offer was rejected by respondent; that first highest bid of petitioner .had been accepted by respondent who
even encashed pay order deposited by petitioner; that in second invitation of tenders certain uncalled for and unreasonable conditions were
incorporated to ensure that petitioner was kept out of process due to non fulfilment of flimsy conditions and qualifications--Respondents
argued that petitioner had no resources available with it, therefore due to non-meeting of minimum requirement of bid, respondent was fully
justified in rejecting its highest bid; that mere highest bid of a party was not to give it locus standi to challenge rejection of its bid and that
petitioner firm was not member of Chamber of Commerce and Industry---Validity---Transparency in process where doubted and mala fides or
ulterior motive to oblige any particular party to cause financial loss to public excheque r was alleged, the powers of High Court under Art.199
of the Constitution could be invoked and exercised to examine such aspects and to undo such wrongs to avoid financial loss to excheque r
due to acts of misdeed, collusion or favouritism by individuals involved in such process---Court was not to sit as silent spectator to approve
underhand devices, aimed to eliminate one party and to accommodate another, causing heavy financial loss to the excheque r---Terms and
conditions imposed by respondent for awarding contract were to have nexus with nature of contract and its objectives---Security deposit paid
by petitioner and encashed by respondent gave strong presumption in favour of petitioner that his highest bid was accepted, being in
accordance with specified terms and conditions and to the satisfaction of respondents---Petitioner was vigorously pursuing its case for
execution of final agreement in its favour but respondent was putting up new conditions beyond scope of terms and conditions provided in
advertisement just to frustrate claim of petitioner---Substantial difference existed between petitioner's offer and second highest offer of other
party which aspect put heavy burden on respondent to justify his action of non-acceptance of petitioner's highest offer---Ulterior motive and
mala fide of respondents was clear from comparison of contents of their two advertisements for invitation of offers as a number of additional
conditions and qualifications were incorporated in second advertisement which had no nexus with purpose and objective of respondent which
were solely to get maximum financial benefits for public excheque r---For establishing and managing a marts hall on built, operate and
transfer basis, an experience of minimum five years in relevant field was not much relevant from point of view of respondent who after award
of contract were to be concerned only with receipt of maximum monthly income---Petitioner though was member of Chamber of Commerce
and Industry but such registration was not that much material as the same could have been obtained by petitioner later on---Respondents
could not give a satisfactory reply to query that why several additional technical terms and conditions were incorporated in second tender
notice which did not find place in the first advertisement---Acceptance by respondent of offer of other party and awarding contract to the
latter was illegal, without lawful authority and of no legal effect---Respondent was directed by High Court to invite fresh bids/offers for
granting lease of plot for purpose of marriage lawn by incorporation of only such conditions which were available in first advertisement and
were necessary to safeguard their interest properly---Constitutional petition was accepted.
Citation Name : 2007 PLD 27 KARACHI-HIGH-COURT-SINDH
Side Appellant : Raja MUHAMMAD ZARAT KHAN

----S. 497---Customs Act (IV of 1969), Ss.2-B, 3-A, 3-E, 16, 19, 25, 32(A)(B)(C), 156(1), (10=A), (14), (14-A), (77), (82), 168, 178, 171 &
195-C---S.R.O. 450(I)/2001, dated 18-6-2001---S.R.O. 509(I)/97, dated 8-7-1997---S.R.O. 698(I)/02, dated 9-10-2002---National
Accountability Ordinance (XVIII of 1999), S.25---Bail, grant of---Criminal liability under Customs Act, 1969---Misuse of DTRE Scheme---Claim
to inadmissible customs rebate---Plea bargain---Applicability---Four F.I.Rs. were lodged against accused/petitioner by Customs Authority,
alleging therein that he being involved in claiming inadmissible customs rebate, and misuse of DTRE by way of phony and fraudulent export,
caused loss to State excheque r; and that consignments/containers intended for export when examined by Authority did not contain those
export articles which accused had declared--Bail petition of accused was dismissed by Trial Court on ground that accused was prima facie
connected with offence alleged by prosecution and further investigation was still in progress---Accused contended; that he was ready to pay
alleged evasion of customs duty; that allegation as to claiming rebate after export was imaginary; that under S.32(A)(B) of Customs Act,
1969, offence allegedly committed by accused was to be compounded if he paid amount of duty or tax evaded along with penalty; that under
S.195-C of Customs Act, 1969, accused was to apply to Central Board of Revenue for appointment of Alternative Dispute Resolution (ADR)
Committee for resolution of dispute as to matter pertaining to customs duty, liability, rebate, waiver, penalty or fine; that case of accused
being of civil nature in view of Ss.32-(A)(B) & 195-C of Customs Act, 1969, no criminal proceedings were to be initiated against him; that
offence allegedly committed by accused did not fall in prohibitory clause of S.497, Cr.P.C. and that resort was to be made to resolution of
dispute through negotiated settlement with reference to law pertaining to plea bargain contained in National Accountability Ordinance,
1999---Validity---Application of accused under 5.195-C of Customs Act, 1969 for recourse to Alternative Dispute Resolution had already been
rejected by Central Board of Revenue---Provisions of Ss.32 & 195 of Customs Act, 1969, pertained to discharge of civil liability and even if
matter was settled under these provisions, accused was not to be absolved automatically of criminal liability especially when prosecution had
already been launched before Trial Court---Plea bargain contained in National Accountability Ordinance 1999, was not attracted to criminal
proceedings under Customs Act, 1969---Contention of accused that as officials of Directorate-General of Intelligence and Investigation
(Customs & Central Excise) were not conferred authority under Ss.2-B & 3-A of Customs Act, 1969, and they did not exercise jurisdiction
properly, required deeper appreciation which was not to be considered at bail stage--Offence allegedly committed by accused was punishable
with imprisonment for 10 years and fell within prohibitory clause of S.497, Cr.P.C.---Bail petition was dismissed.
Citation Name : 2007 PTD 776 INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN
Side Appellant : M.As. (AG) Nos.600/LB to 602/LB of 2006 and I.T.As. Nos.7393/LB to 7395/LB of 2005, decided on 6th October, 2006.
Side Opponent : M.As. (AG) Nos.600/LB to 602/LB of 2006 and I.T.As. Nos.7393/LB to 7395/LB of 2005, decided on 6th October, 2006.
---S. 24(fff)---Deductions---Salary---Assessee contended that nowhere it has been said as in S.24(fff) of the Income Tax Ordinance, 1979
that if salary exceeding was paid otherwise than through a crossed cheque the same shall be disallowed rather provision of law says that if
the payment of salary exceeding Rs.5,000 was made through a crossed cheque , the same shall be disallowed---Validity---Contention of the
assessee was repelled as 24(fff) of the Income Tax Ordinance, 1979 was the continuity of subsection (ff) of S.24 of the Income Tax
Ordinance, 1979, which was regarding payments on account of expenditure under a single head of account, which in aggregate exceeds
Rs.50,000 made otherwise than through a crossed cheque ---Intention of the legislator was the documentation of the economy---Wording of
the statute may not be properly drafted, but the intention in this regard was clear---Assessee having not paid salary through cross cheque s,
the provisions of S.24(fff) of the Income Tax Ordinance, 1979 were applicable and expense was rightly disallowed being inadmissible---
Contention that "proper tax regarding salary had been deducted and deposited in accordance with law, the addition should not be made" was
repelled, as the salaries had not been paid through banking channels---Assessee's appeal was dismissed by the Appellate Tribunal on this
ground.
Side Appellant : I.T.A. No.684/KB of 2003, decided on 29th April, 2006.
Side Opponent : I.T.A. No.684/KB of 2003, decided on 29th April, 2006.
---Ss. 13(1)(c) & 4-A---Unexplained investment etc., deemed to be income---Addition on the ground that cash on the closing day as per bank
statements and the books of accounts did not tally by rejecting assessee's affirmation that "difference was existing because of factum that
cheque s were issued but not presented" same being the afterthought had remained unsubstantiated---Validity,--Issuance of cheque s and
not having been presented and corresponding reconciliation could not be diverted to falsifying declared version of assessee---Books of
accounts and vouchers were in possession of the Department from which Assessing Officer could have verified the plea taken by the
assessee---Addition was deleted as retention of assessee's books of accounts were not in favour of upholding the Departmental treatment---
Legal course shall follow in case of proven falsification of any of itemized reconciliation statements filed by the assessee.

Side Appellant : I.T.As. Nos. 1093/LB and 150/LB of 2004, decided on 29th May, 2006.
Side Opponent : I.T.As. Nos. 1093/LB and 150/LB of 2004, decided on 29th May, 2006.
---Ss.62(1) & 24(fff)---Assessment on production of accounts, evidence etc.---Rejection of accounts on the basis of difference of amounts
between Director's remuneration claimed in the final audited account and shown in the books of accounts being' unexplained---Addition under
S.24(fff) of the Income Tax Ordinance, 1979---Validity---By making such addition Assessing Officer accepted the claimed amount and
addition was made on the basis that payments made otherwise than through crossed cheque s---Such treatment was not only contradictory
in 'itself, but was a conclusive proof that explanation of the assessee regarding difference was accepted---Since no adverse inference on the
basis of earlier observation had been drawn, link of the said observation with the rejection of accounts automatically vanished---Rejection of
account on this basis was not valid.
Side Appellant : I.T.As. Nos.5138/LB to 5149 of 2004; decided on 30th November, 2005.
Side Opponent : I.T.As. Nos.5138/LB to 5149 of 2004; decided on 30th November, 2005.
----S. 12(18)---C.B.R. Circular No.3 of 1992, dated 27-1-1992---Deemed income---Advances---Business advances---Addition was made "on
the ground that advances received from the parties were not through cross cheque s---Validity---Advances were 'the business advances and
the expression "advance" used in S.12(18) of the Income Tax Ordinance, 1979 means non-business advance---Expression "advance" as used
by the legislature' in S.12(18) of the Income Tax Ordinance, 1979 should not be taken in an isolated or detached manner disassociated from
the text, but was to be read together and construed in the light of the purpose and object of the provisions of law---Expressions "loan" and
"gift" were related to non-business transaction, therefore, the expression "advance" being connected to other was also in the nature of non-
business financial transaction---Advances were business advances and were not hit by the mischief of S.12(18) of the Income Tax Ordinance,
1979---Purpose of section 12(18) of the Ordinance was to check fictitious transactions' but the Taxation Officer had not observed that the
advances were fictitious---Trading advance will become income as per accounting process for computation of income in the subsequently year
and will tantamount to double jeopardy---Additions made were deleted by the Appellate Tribunal being without justification.
Side Appellant : I.T.A. No. 8/LB of 2006, decided on 3rd May, 2006.
Side Opponent : I.T.A. No. 8/LB of 2006, decided on 3rd May, 2006.
----S. 12(18)---Income deemed to accrue or arise in Pakistan---Addition---Gift amount from mother was received through cross cheque
which was deposited in the account of Association of Persons---Addition was made on the ground that individual gift was not received through
cross cheque as the gift should have been received in the bank account of the person to whom the gift was made---Assessee contended that
provisions of law were not applicable where some loan, gift or advance was received by a cross cheque drawn on a bank and the law did not
further lay down the requirement of receipt in the personal account---Validity---Only requirement for avoiding the mischief of S.12(18) of the
Income Tax Ordinance, 1979 was to receive the loan or gift or advance through a crossed cheque drawn on bank---Gift was received through
a cross cheque drawn on hank---Authorities below clearly erred not only in adding the expression "in his account" in the provision of law,
which was not there, but also by invoking these provisions as the case was of invocation of deeming provisions which were to be invoked
'strictly on the basis of express language used by the Legislature---No scope was available in such like cases for going beyond the wording
used in the provisions of law---Bank account of the Association of Persons was in fact the bank account of the members---Action of the
Assessing Officer was not maintainable, particularly in the background of admitted position on gift payment through a crossed cheque
---Provisions of S.12(18) were also not attracted in the case of genuine, identifiable and traceable transactions and the transaction in this
case was fully traceable---Authorities below grossly misdirected themselves in invoking and upholding these provisions of law---Orders passed
by the authorities were not maintainable either factually or legally---Assessee's appeal was allowed, the orders of authorities below were
vacated and addition made was annulled/cancelled by the Appellate Tribunal.
Citation Name : 2007 PTD 910 CUSTOMS,CENTRAL-EXCISE-AND-SALES-TAX-APPELLATE-TRIBUNAL
Side Appellant : Appeal No.231/STAB of 2005, decided on 5th January, 2006.
Side Opponent : Appeal No.231/STAB of 2005, decided on 5th January, 2006.

---S.7---Determination of tax liability---Provisions regarding "input" as well as "output tax" as defined in the definition clause of the Sales Tax
Act, 1990 read with Ss.7 and 8 of the Sales Tax Act, 1990 were only modalities prescribed to protect the interest of the excheque r against
any pilferage, evasion or fraud.
Citation Name : 2007 PTD 473 CUSTOMS,CENTRAL-EXCISE-AND-SALES-TAX-APPELLATE-TRIBUNAL
Side Appellant : Sales Tax Appeal No.239/ST/IB of 2005., decided on 28th January, 2006.
Side Opponent : Sales Tax Appeal No.239/ST/IB of 2005., decided on 28th January, 2006.
---Ss. 2(35), 7, 8, 36, 45 & 46---Adjustment of input tax---Appeal to Appellate Tribunal---Appellant claimed that input tax against electricity
consumed in residential colony, could be adjusted as per provisions of S.7(1) of Sales Tax Act, 1990---Section 7(1) of Sales Tax Act, 1990 in
juxtaposition to S. 8(1)(a) of said Act provided that a registered person would be entitled to deduct input tax in the manner specified in said
S.7(1) of the Act, paid on goods to be used for any purpose for the manufacture or production of "taxable goods" or for "taxable supplies"
made or to be made by him---Once a registered person established that the goods in question of which input tax had been paid were used for
taxable supplies made or to be made by him, then subject to terms of S.7 of Sales Tax Act, 1990 he would become entitled to the deduction
of said input tax paid by him for the said purpose from the output tax that was due from him in respect of particular tax period---Section 7 of
Sales Tax Act, 1990 was a beneficial provision of law in nature providing a facility to a registered person to adjust input tax at the time of
making payment of output sales tax---Manufacturer of finished goods at the time of' their sale, had been given the right to adjust against the
Sales Tax payable on such goods which had been described as output tax, the input tax already paid---Relevant provisions of Sales Tax Act,
1990 were enacted with the object of providing safeguard against double tax and provisions regarding "input" as well as "output tax" as
defined in definition clauses of the Act read with Ss.7 & 8 thereof, were only modalities prescribed to protect the interest of excheque r
against any pilferage, evasion or fraud---Input adjustment of Sales Tax paid on electricity bills consumed in the labour colony of appellant's
factory, was allowed, in circumstances.
Citation Name : 2006 PSC 928 SERVICE-TRIBUNAL-SINDH
Side Appellant : Mrs. NAJMA SAEED
Side Opponent : CHIEF SECRETARY

--R. 4(1)(b)(i), 5 & 6---Sindh Service Tribunals Act (XV of 1973), S.4---Reduction in rank---Major penalty of reduction in rank for two years
was awarded to appellant after serving her with final show-cause notice, but without holding inquiry against her on allegation of mis-
appropriation of Government money by making forgery---Co-accused, who was awarded major penalty of removal from service and recovery
of losses by a separate order, had not filed any appeal before Service Tribunal whereas appellant had challenged impugned order passed
against her---Charge of misappropriation of Government money in collaboration with other person levelled against appellant was serious one,
which she had denied and explained her position, but despite that no regular inquiry was either ordered or conducted against her---For
awarding major penalty to a civil servant, there must be ample, convincing and reliable evidence, which could be collected only through
regular departmental inquiry, but no such inquiry was either ordered or conducted against appellant---From the inquiry report against co-
accused, it was revealed that co-accused, without the knowledge of appellant, had changed, rather manipulated the figures in the passed bills
and the cheque s presented before the Bank---Appellant, in circumstances could not be penalized for the fault and default of other---In
absence of any regular inquiry as also in absence of any tangible, convincing and concrete evidence of alleged inefficiency, negligence of
duties and lack of supervision on the part of appellant, major penalty awarded to her, was not maintainable---Impugned order was set aside,
in circumstances.
Side Appellant : DAUD SHAH and another
Side Opponent : PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY
----Rr. 4 & 5---Negligence---Direct responsibility of loss----Proof---Employees were officers in Water and Power Development Authority and
were proceeded against on the allegation of loss caused to the Authority in payment of wages to labour at site--After departmental
proceedings, employees were awarded major penalty of two steps down in their time scale for a period of two years coupled with recovery of
loss---Penalty imposed in departmental proceedings was maintained by Service Tribunal---Validity---No evidence was available on record to
suggest that the employees were directly responsible for causing loss to excheque r but since they were found careless in the matter of
payment of wages, therefore, Supreme Court declined to take any exception to the finding of Service Tribunal to the extent of charge of
negligence against them---Order relating to penalty of reduction to two steps in time scale for a period of two years was justified but to
burden the employees with recovery of loss was not proper---Supreme Court set aside order of departmental authority regarding recovery of
loss of Government money from the employees and maintained judgment of Service Tribunal to the extent of penalty of reduction to two
steps in time scale for a period of two years---Judgment of Service Tribunal was modified accordingly---Appeal was partly allowed.I.G.HQ.
Side Appellant : Mian ASGHAR ALI
Side Opponent : PROVINCE OF PUNJAB through District Collector
---S. 30(2)---West Pakistan Board of Revenue Act (XI of 1957), S.8(2)---Constitution of Pakistan (1973), Arts.185(3) & 199---Constitutional
petition---Securing land of Municipal Committee at nominal price by exertion of political influence---Recall of sanction order by Board of
Revenue---Purchaser's application to the Governor and its onward reference to Board of Revenue---Review of recall order by Board of
Revenue on such application beyond statutory period of 90 days without notice to Municipal Committee and contemporary contender---
Validity---Respondent had not moved such application before proper forum---Application referred by the Governor had been illegally treated
as review petition by Board of Revenue and without application and affidavit of purchaser to condone delay---Board of Revenue had accepted
review petition at belated stage without giving reason for condoning delay---Review petition being barred by time was not maintainable and
order passed thereon was not sustainable in eye of law---Interference with impugned order would tantamount to encouraging perpetuation of
patent illegal devices to protect illegitimate gains reaped by political vultures for unjust enrichment at the cost of public excheque r, which
had eroded the very moral fabric of society--Supreme Court dismissed petition and refused leave to appeal.
Side Appellant : IFTIKHAR MUBEEN ARSHEE
Side Opponent : DEPUTY COMMISSIONER/CHAIRMAN, BOARD OF GOVERNORS, KASUR PUBLIC SCHOOL, KASUR
---S. 20--Constitution of Pakistan (1973), Art.185(3)---Employee of a school registered under Societies Registration Act, 1860---Termination
of services of employee by Deputy Commissioner as an Ex-Officio Chairman of Board of Governors of such school---High Court dismissed
Constitutional petition on the ground that such school was a non-statutory body and there were no statutory rules of service of its
employees---Validity---Employees of such school were not governed by any statutory rules of service---Income derived or expenditure
incurred by such school did not form part of Provincial Consolidated Fund or public excheque r-Merely because Deputy Commissioner of the
District was an Ex-Officio Chairman of Board of Governors of such school could not be a basis for treating same to be a Government
institution---High Court had rightly refused to interfere in the matter---Supreme Court dismissed petition in circumstances.
Side Appellant : ABDUL SATTAR
--Rr. 3(b), 4(1)(b)(v), 5 & 6---Constitution of Pakistan (1973), Art.212(3)---Dismissal from service---Causing loss to excheque r, charge
of---Dismissal of appeal by Service Tribunal---Non-holding of regular enquiry and absence of grounds for dispensing therewith before taking
such action by authority resulting in violation of principles of natural justice---Enquiry report supporting civil servant's case not considered by
authority or Service Tribunal---Supreme Court granted leave to appeal to consider, inter alia, such contentions of civil servant.
Side Appellant : ABDUL SATTAR
--Rr. 3(b), 4(1)(b)(v), 5 & 6---Constitution of Pakistan (1973), Art.212(3)---Dismissal from service---Causing loss to excheque r, charge
of---Non-holding of regular enquiry before imposition of penalty by competent authority---Dismissal of appeal by Service Tribunal---Validity---
Correctness of such charge could not possibly be determined without a regular inquiry with participation of civil servant and detailed scrutiny
of record to ascertain that in what manner, civil servant was responsible for causing loss to excheque r---Supreme Court accepted appeal,
set aside impugned judgment and reinstated civil servant in service with back benefits subject to result of inquiry to be held afresh into such
allegations.
Side Appellant : YASIR KHAN
Side Opponent : MUHAMMAD MASOOD-UR-RAUF
---O. XXXVII, R.3 & O.XLI, R.5---Constitution of Pakistan (1973), Art.185(3)---Appeal against decree passed in suit for recovery of amount of
dishonoured cheque s---High Court suspended operation of decree subject to furnishing by appellant-Bank guarantee equal to decretal
amount---Validity---Appellant had not denied issuance of cheque s of different amounts on different dates---High Court had not committed
illegality in passing impugned order---Supreme Court dismissed petition and refused leave to appeal.
Side Appellant : AUDITOR-GENERAL OF PAKISTAN
Side Opponent : MUHAMMAD ALI
---Ss. 4 & 5---Government Servants (Efficiency and Discipline) Rules, 1973, Rr.2 & 3---Compulsory retirement from service---Carelessness,
an act of misconduct---Deterrent and reformative punishment---Import, object and scope---Converting major penalty into minor penalty---
Senior officers who equally shared the responsibility of negligence in transaction of over payment, were awarded minor penalty of recovery of
nominal amount of Rs.5,000 each, whereas civil servants being subordinate officials, on the basis of same set of facts, had been dealt with
severely in the matter of punishment---Service Tribunal allowed the appeal filed by civil servants and penalty of compulsory retirement from
service was converted into reduction in time scale by three stages for two years---Plea raised by authorities was that civil servants were
negligent and inefficient and were responsible for causing loss to Government excheque r---Validity---Carelessness was an act of negligence
which might not strictly fall within the ambit of misconduct as defined in R.2 of Government Servants (Efficiency and Discipline) Rules, 1973
but it was definitely a valid ground on the basis of which a Government servant could be awarded penalty as provided in R.3 of Government
Servants(Efficiency and Discipline) Rules, 1973---Element of bad faith and wilfulness might bring an act of negligence within the purview of
misconduct but lack of proper care and vigilance might not always be wilful to make the same a case of grave negligence inviting severe
punishment---Philosophy of punishment was based on the concept of retribution, which might be either through the method of deterrence or
reformation---Purpose of deterrent punishment was not only to maintain balance with the gravity of wrong done by a person but also to make
an example for others as a preventive measure for reformation of society---Concept of minor penalty in law was to make an attempt to
reform the individual wrong doer---In service matters, extreme penalty for mirror acts depriving a person from right of earning would defeat
the reformatory concept of punishment in administration of justice---Supreme Court declined to take any exception to the view of the matter
taken by Service Tribunal---Appeal was dismissed.
Citation Name : 2006 PLD 226 SUPREME-COURT
Side Appellant : HAPPY FAMILY ASSOCIATE through CHIEF EXECUTIVE
Side Opponent : Messrs PAKISTAN INTERNATIONAL TRADING COMPANY
--O. XXXVII, R.1---Decree for dishonoured cheque ---Awarding of damages in such decree---Validity---No amount on any other account
including damages can be awarded by Court, except interest in such decree.
Citation Name : 2006 PSC 1278 SUPREME-COURT
Side Appellant : CHIEF SECRETARY PUNJAB and others
Side Opponent : ABDUL RAOOF DASTI
----Appointment---Principles---Choosing persons for public service is not just providing a job and the consequent livelihood to the one in need
but is a sacred trust to be discharged by those charged with it, honestly, fairly, in a just and transparent manner and in the best interest of
public---Individuals so selected are to be paid not out of the private pocket of the persons appointing them but by the people through the
public excheque r---Not selecting the best as public 'servants is a gross breach of public trust and is an offence against public, who has a
right to be served by the best; it is also a blatant violation of the rights of those who may be available and whose rights to the posts are
denied to them by appointing unqualified or even less qualified persons to such posts---Such practice and conduct is highly unjust and
spreads a message from those in authority that might is right and not vice versa, which message gets gradually permeated to grass-root level
leading ultimately to a society having no respect for law, justice and fairplay---Evil norms ultimately lead to anarchic and chaotic situations in
a society---Such likes evil tendencies should be suppressed and eliminated before the same eliminate us all.
Citation Name : 2006 PSC 14 SUPREME-COURT
Side Appellant : AUDITOR-GENERAL OF PAKISTAN
Side Opponent : MUHAMMAD ALI

-.-Ss. 4 & 5---Government Servants (Efficiency and Discipline) Rules, 1973, Rr.2 & 3---Compulsory retirement from service---Carelessness,
an act of misconduct---Deterrent and reformative punishment---Import, object and scope---Converting major penalty into minor penalty---
Senior officers who equally shared the responsibility of negligence in transaction of over payment, were awarded minor penalty of recovery of
nominal amount of Rs.5,000 each, whereas civil servants being subordinate officials, on the basis of same set of facts, had been dealt with
severely in the matter of punishment---Service Tribunal allowed the appeal filed by civil servants and penalty of compulsory retirement from
service was converted into reduction in time scale by three stages for two years---Plea raised by authorities was that civil servants were
negligent and inefficient and were responsible for causing loss to Government excheque r- Validity---Carelessness was an act of negligence
which might not strictly fall within the ambit of misconduct as defined in R.2 of Government Servants (Efficiency and Discipline) Rules, 1973
but it was definitely a valid ground on the basis of which a Government servant could be awarded penalty as provided in R.3 of Government
Servants (Efficiency and Discipline) Rules, 1973-7-Element of bad faith and wilfulness might bring an act of negligence within the purview of
misconduct but lack of proper care and vigilance might not always be wilful to make the same a case of grave negligence inviting severe
punishment---Philosophy of punishment was based on the concept of retribution, which might be either through the method of deterrence or
reformation---Purpose of deterrent punishment was not only to maintain balance with the gravity of wrong done by a person but also to make
an example for others as a preventive measure for reformation of society---Concept of minor penalty in law was to make an attempt to
reform the individual wrong doer---In service matters, extreme penalty for minor acts depriving a person from right of earning would defeat
the reformatory concept of punishment in administration of justice---Supreme Court declined to take any exception to the view of the matter
taken by Service Tribunal---Appeal was dismissed.
Side Appellant : CHIEF SECRETARY PUNJAB and others
Side Opponent : ABDUL RAOOF DASTI
---Appointment---Principles---Choosing persons for public service is not just providing a job and the consequent livelihood to the one in need
but is a sacred trust to be discharged by those charged with it, honestly, fairly, in a just and transparent manner and in the best interest of
public---Individuals so selected are to be paid not out of the private pocket of the persons appointing them but by the people through the
public excheque r---Not selecting the best as public servants is a gross breach of public trust and is an offence against public, who has a
right to be served by the best; it is also a blatant violation of the rights of those who may be available and whose rights to the posts are
denied to them by appointing unqualified or even less qualified persons to such posts---Such practice and conduct is highly unjust and
spreads a message from those in authority that might is right and not vice versa, which message gets gradually permeated to grass-root level
leading ultimately to a society having no respect for law, justice and fair play---Evil norms ultimately lead to anarchic and chaotic situations in
a society---Such likes evil tendencies should be suppressed and eliminated before the same eliminate us all.
Side Appellant : COLLECTOR OF CUSTOMS, COLLECTORATE OF CUSTOMS, RAWALPINDI
Side Opponent : KHUD-E-NOOR
---Ss. 2(b) & 4---Protection of Economic Reforms---Authority to hold foreign currency---Principle---In respect of criminal case failing under
any provision of law prevailing in country, if a person claims that he has been authorized to take currency out of Pakistan, he has to adopt
proper procedure i.e. through Bark, etc.---No one can be allowed to shift currency except to the tune of US.$ 10,000/- as it has been
prescribed by State Bank of Pakistan, if such currency has been purchased from authorized dealer---No doubt under Protection of Economic
Reforms Act, 1992, certain facilities have been given for the purpose of development and promotion of economic activities in the country but
simultaneously, it is also to be checked that foreign currency is not moved out unauthorizedly otherwise it would promote offence of money
laundering, as well as result of which public excheque r would be affected badly and its ultimate result has to be borne by the common man.
Side Appellant : Lt. Col. (R.) ABDUL WAJID MALIK
Side Opponent : GOVERNMENT OF THE PUNJAB

---Officer on Special Duty (OSD)---Concept---Ordinarily, a Government employee should not be posted as OSD except under compelling
circumstances, exigency of service and in public interest but tenure of such posting should not be more than thirty days---Being purely
administrative matter, it falls within the jurisdictional domain of competent authority to exercise its right in the interest of public but it must
not be lost sight of that the posting of an employee as OSD would also be an extra burden on government excheque r, as such employee
receives salary without rendering any service which cannot be afforded.
Side Appellant : Lt. Col. (R.) ABDUL WAJID MALIK
Side Opponent : GOVERNMENT OF THE PUNJAB
---S.4---Constitution of Pakistan (1973), Art.212(3)---Service benefits---Officer on Special Duty (OSD)---Grievance of civil servant was that
while posted as OSD, he was not paid extra benefits in shape of deputation allowance, POL charges and residential telephone facility
charges---Appeal filed by civil servant was dismissed by Service Tribunal---Validity---No deputation allowance, POL charges and residential
telephone facility charges were specified for the post of OSD---Such claim was made in oblivion of the fact that during his posting as OSD no
official duty whatsoever was assigned to him and in absence whereof POL and residential telephone facility charges could not be paid as there
was no purpose of such payment---Civil servant failed to furnish any reason on the basis of whereof such extra burden on Government
excheque r could be justified, when no official duty was assigned to him---No legal right was available to civil servant to have claimed such
benefits---Question of infringement of any vested right did not arise---Government employee appointed to a post or grade would be entitled
to pay sanctioned for such post---Employee posted as OSD could only claim the sanctioned pay for the post and not other benefits which were
not sanctioned for such post---No illegality or irregularity was pointed out by ' civil servant in the judgment passed by Service Tribunal---No
question of law of public importance was involved in the matter---Service Tribunal had travelled in the straight furrow of detached and
objective thinking and there was no deflection on account of personal bias or ill-will---Leave to appeal was refused.
Side Appellant : GOVERNMENT OF PAKISTAN through Ministry of Works and another
Side Opponent : Messrs MALBROW BUILDERS, CONTRACTOR, SIALKOT
--Art. 185---Supreme Court Rules, 1980, O.Xlll, R.1---Appeal to Supreme Court by Federal Government---Barred by time---Condonation of
delay---'Sufficient cause'---Connotation---Question of limitation being not a mere technicality cannot be taken lightly and the rights accrued
to the other party due to limitation cannot be snatched away without 'Sufficient Cause' and lawful justification---'Sufficient Cause' is not
capable of connotation with exactitude and would differ from case to case but laxity, carelessness and curosory approach of the functionaries
of the Government do not constitute sufficient cause and question of any indulgence does not arise---Delinquent officers/officials, who are
responsible for such delay must be taken to task being responsible for the loss of public excheque r--No illegality or infirmity having been
noticed in the judgment of High Court declining condonation of delay, no preferential treatment could be shown to the Government.
Side Appellant : Haji SARDAR KHALID SALEEM
Side Opponent : MUHAMMAD ASHRAF
---Arts. 185(3) & 199---Penal Code (XLV of 1860), Ss.420, 468, 471 & 489-F---Criminal Procedure Code (V of 1898), Ss.249-A & 265-K---
Constitutional petition before High Court---Competency---Quashing of F.I.R.---Constitutional petition for quashing of F.I.R. was accepted by
High Court on the ground that cheque in question was issued prior to the promulgation of Criminal Law (Amendment) Ordinance (LXXXV of
2002)---Intra-Court appeal was also dismissed on the ground of' being not maintainable---Mere mentioning of S.489-F, P.P.C. in the F.I.R.,
was no ground to quash F.I.R. by High Court while exercising constitutional jurisdiction under Art.199 of the Constitution, without adverting to
contents of F.I.R.---Petitioner had alternative remedy to raise objection at the time of framing charge against him by the Trial Court or at the
time of final disposal of the trial by the Trial Court after recording evidence---Even otherwise petitioner had more than one alternative
remedies viz. before, the Trial Court under Criminal Procedure Code, 1898 i.e. S.265-A or 249-A, Cr.P.C. and that fact was also not
considered by High Court---If the contents of constitutional petition and F.I.R. were put in juxtaposition, then it would bring case of petitioner
in the area of disputed question of fact which could not be decided by High Court in exercise of its constitutional jurisdiction which required
investigation and evidence of parties to be recorded by the Trial Court---High Court, in circumstances had erred in law in accepting
constitutional petition by quashing F.I.R. at initial stage---cheque in question which was issued, having been dishonoured, ingredients of
Ss.420, 468 &.471, P.P.C. were prima facie, attracted---Petition for leave to appeal was converted to appeal and was allowed setting aside
the impugned order---Supreme Court had ample jurisdiction to condone delay in case party would approach wrong forum---Delay was
condoned.
Citation Name : 2006 PSC 1311 PESHAWAR-HIGH-COURT-NWFP
Side Appellant : EMPLOYEES ACTION COMMITTEE
Side Opponent : GOVERNMENT OF PAKISTAN and others
---S.42---Income Tax Ordinance (XXXI of 1979), S.12---Constitution of Pakistan (1973), Art.247 (3)---Suit for declaration---Civil servants,
status of---Serving in Provincially Administered Tribal Area---Deduction of income tax---Plaintiffs were civil servants appointed in Provincially
Administered Tribal Area, who had assailed deduction of income tax from their salaries on the ground that the provisions of Income Tax
Ordinance, 1979, were not extended to such areas---Courts below had adopted mutually inconsistent view on point of law---Held, it was true
that Income Tax Ordinance, 1979, had not been extended to area within the meaning of Art.247 (3) of the Constitution but all Government
servants within the Province or serving under Federation constituted one body/setup and they were liable to pay income tax on the income
derived from their salaries---Every income derived through salary was chargeable to tax, if it was paid by Government or a local authority
controlled by Government or if it had accrued in Pakistan irrespective of the place of payment thereof---Statute, therefore, had empowered
the Authority in unambiguous terms to impose and charge tax on the income derived through salaries paid to Government servants, whether
posted within taxable area to which Income Tax Ordinance, 1979, was extended or he was serving beyond the frontiers of that area---
Charging provisions, follow the income of Government servant which he received from Government as a salary, and have no relevancy with
the place of posting---Territorial barriers had no impact or effect on such charge---Plaintiffs being Government servants, whether serving in
Federal Government or Provincial Government or under local authorities which were funded by Government excheque r were liable to pay
income tax within the meaning of S.12 of Income Tax Ordinance, 1979, on account of income derived through salaries---Assessment
order/notice issued by Income Tax Officer of the circle concerned for charging and levying income tax on their salaries was lawful and valid.
Side Appellant : JAFFAR ALI ALVI
Side Opponent : SESSIONS JUDGE, ISLAMABAD
--S. 154---Penal Code (XLV of 1860), S.489-F---Police Rules, 1934, R.25.2---Constitution of Pakistan (1973), Art.199---Constitutional
petition---Registration of case---Existence of correct or incorrect fact was not a requirement; requirement was that the information must
disclose commission of a cognizable offence---Question as to impact of cheque s issued by a company or signed on behalf of a company
required investigation, which could not be undertaken under constitutional jurisdiction---High Court dismissed the constitutional petition with
specific directions to the Investigating Officer observing that fair and independent investigation was statutory right and at the same time
obligation of police---Courts could neither directly interfere nor influence investigating Officer in investigation---Investigating Officer was
further directed to bear in mind his responsibility and seek guidance from R.25.2 Police Rules, 1934.
Citation Name : 2006 PTD 2602 LAHORE-HIGH-COURT-LAHORE
Side Appellant : AHMED ALI
Side Opponent : INCOME TAX APPELLATE TRIBUNAL, LAHORE and 2 others
--Ss. 12(18) & 136(1)---C.B.R. Circular No. 3 of 1992, dated 27-1-1992---Bearer cheque s---Effect---Assessee claimed to have obtained
loan from his company through two bearer cheque s---Although genuineness of both the cheque s was beyond doubt, yet Assessing Officer
declined to give any benefit to the assessee for, the reason that the cheque s were not crossed, as required under S.12 (18) of Income Tax
Ordinance, 1979---Plea raised by assessee was that subsection (18) had been introduced with a specific purpose which was to check fictitious
loans and to discourage introduction of back dated cash credits to meet financial liabilities---Validity---Central Board of Revenue committed
no excess of jurisdiction in issuing Circular No. 3 of 1992, dated 27-1-1992---As the assessee had obtained loan through bearer cheque s,
which fact was verified by the concerned bank, therefore, order passed by Income Tax Appellate Tribunal was set aside---High Court declared
that the Assessing Officer could not make addition under S.12(18) of Income Tax Ordinance, 1979, of the amount received by assessee
through bearer cheque s---Appeal was allowed in circumstances.
Side Appellant : ZAHOOR MEHDI FAISAL
Side Opponent : ADDITIONAL DISTRICT JUDGE
--Succession---Insurance money---Claim of share in such money---Death claim of petitioner with regard to his deceased wife having been
accepted by Insurance Corporation, a cheque of insurance amount was issued to petitioner---Respondent claimed his share in the insurance
money, which was resisted by petitioner, but respondent was held entitled to share in the death claim in accordance with Islamic law---
Contention of petitioner was that death claim not being the property of deceased in her life time, same could not be considered as 'Tarka' and
same was not heritable---Validity--Death claim, voluntary claim and group insurance though were not 'Tarka' to be inherited by the legal
heirs, but those were grant/compensation to be distributed among the legal heirs according to Islamic share---One could not be excluded at
the cost of other.
Side Appellant : MUHAMMAD NADEEM
--S. 498---Penal Code (XLV of 1860), S.489-F---Pre-arrest bail, refusal of--Issuance of cheque s in question by accused stood admitted---
Accused during investigation, was found guilty---Prima facie there appeared to be material evidence available on record connecting accused
with the commission of crime---Counsel for accused had not been able to point out any malice, the basic ingredient for the grant of pre-arrest
bail, either on the part of complainant or the police to involve him falsely in the case---Complainant had been allegedly deprived of a huge
amount at the hands of accused---Accused could not be admitted to pre-arrest bail---Bail petition was dismissed and interim anticipatory bail
allowed to accused, was recalled.
Side Appellant : Haji MUHAMMAD SADIQ
Side Opponent : S.H.O., POLICE STATION, SADAR GUJRAT
---Art. 199---Penal Code (XLV of 1860), S.489-F---Quashing of F.I.R.---Constitutional petition---Petitioner, no doubt had placed on record an
application moved to D.P.O. at place 'R' and also application moved under S.22-A, Cr.P.C. for registration of the case against complainant as
the cheque s issued by him, were dishonoured, but Justice of Peace had directed petitioner to seek remedy at place 'G' as cheque s were
dishonoured there---Present case had been registered against petitioner that his cheque was lost which version, if was correct, could be
appreciated only after recording of evidence and through probe by Investigating Officer, and High Court could not assume the role of
Investigating Officer---If civil suit was filed, same was between petitioner and other party and complainant appeared to have no concern with
said suit being not party in said suit, which could not be taken as a ground for quashing of F.I.R. in the case---Constitutional Petition was
disposed of with direction to S.P. (Investigation) at place 'G' to entrust investigation of the case to another Police Officer not below the rank of
Inspector, who would record version of petitioner as well and conduct investigation fairly and properly.
Side Appellant : Messrs MIAN AHMAD ZAFAR & CO. through Managing Partner
Side Opponent : IJAZ AHMAD CHEEMA through Legal Representatives
---- O. XXXVII, R.2---Suit for recovery of money---Dishonoured cheque ---Recovery of amount on the basis of dishonoured cheque
---Defence was that the defendant had issued another cheque with the condition that if subsequent cheque was en-cashed first cheque will
be returned---Defendants produced decision of arbitrator to prove that it was a case of rendition of accounts of dissolved firm between the
parties---Trial Court decreed the suit---Validity---Alleged decision of arbitrator was an award which was not made rule of the Court and could
not be considered as piece of evidence---Defendants had failed to prove the plea raised by them---Trial Court had rightly decreed the suit on
basis of evidence---Appeal was dismissed in circumstances.
Side Appellant : MUHAMMAD IRSHAD
Side Opponent : TEHSIL MUNICIPAL ADMINISTRATION through Tehsil Nazim, Lodhran
----Rr. 5(v), 9, 10 & 16---Constitution of Pakistan (1973), Art.199---Constitutional petition---Auction---Non-fixing of reserve price---Failure to
deposit earnest money---Effect---Petitioner was the highest bidder in earlier auction for collection of tax on transfer of immovable property
but authorities did not confirm the same --Contention of the petitioner was that subsequent auction was held in clandestine manner and
respondent was illegally declared as successful---Validity---Public notice issued in newspaper for holding subsequent auction did not contain
the minimum reserve price for auction as required by R.5(v) of Punjab Local Government (Auctioning of Collection Rights) Rules, 2003---
Similarly there was no evidence on record that in terms of R.I6 of Local Government (Auctioning of Collection Rights) Rules, 2003, any
earnest money was deposited by the respondent and all other bidders, which was not only mandatory requirement but also necessary to
safeguard and ensure the transparency of the auction---Fulfilment of requirement of Rr.5(v) & 16 of' Local Government (Auctioning of
Collection Rights) Rules, 2003, was essential and any auction held without following such requirement could neither be considered as
transparent nor could be held to safeguard the public interest and excheque r---High Court set aside the proceedings from publication of
advertisement till the date of auction and disputed contract was declared as without lawful authority---High Court directed the authorities to
initiate proceedings for holding fresh auction by giving publication in newspaper, mentioning the reserve price, calling for deposit of earnest
money and also by strictly following the other requirements of relevant rules---Petition was allowed accordingly.
Side Appellant : MUHAMMAD IRSHAD
Side Opponent : TEHSIL MUNICIPAL ADMINISTRATION through Tehsil Nazim, Lodhran
---Art. 199---Constitutional petition---Auction---Judicial review---Plea of' concluded contract---Scope---No sanctity is attached to a concluded
contract which is neither transparent nor has been made keeping in the overall interest of leasing body---Contract entered into by public
excheque r is always open to judicial review on the touchstone of reasonableness, fair play, natural justice, equality and nondiscrimination---
Mere fact that as a result of auction which had been held in violation of rules, a concluded contract had come into existence, would neither
mean that High Court was deprived of its constitutional jurisdiction of judicial review to look into the very object of such contract but High
Court while sitting in constitutional jurisdiction was always to sec that public functionaries acted fairly, honestly and in a transparent manner.
Side Appellant : MUHAMMAD JAVED

---S. 497(2)---Penal Code (XLV of 1860), Ss. 381, 420, 468 & 471---Bail, grant of---Further inquiry---Accused was alleged to have withdrawn
an amount of Rs.2,10,000 by forging signatures of Chief Executive Officer of the company---Grandfather of accused had paid back entire
amount in dispute---Investigating Officer conceded that he had not obtained signatures of accused for comparison with alleged signatures on
the cheque ---No steps had been taken to obtain cheque alleged to have been forged by accused---Case of accused was open to further
inquiry---Offence with which accused had been charged, fell outside the prohibitory limits of S.497, Cr.P.C.-Accused was admitted to bail.
Side Appellant : MUHAMMAD HUSSAIN
Side Opponent : MUHAMMAD NAWAZ
---O.XXXVII, R.2---Negotiable Instruments Act (XXVI of 1881), 5.118---Suit for recovery of money---Presumption as to negotiable
instrument---Dishonoured cheque ---Bill of exchange---Plaintiff alleged that the defendant issued cheque to repay loan---cheque was
dishonoured---Leave .to defend was granted---Defendant had pleaded that plaintiff had given a bus on hire purchase terms on instalments to
the relative of defendant and the defendant had given those cheque s as a surety---Trial Court decreed the suit-:-Validity-No proof of
purchase of the bus was given--Negotiable instrument was presumed to be made or drawn for consideration--Presumption had not been
dislodged by the defendant through cogent evidence---Appeal was dismissed in circumstances.
Side Appellant : MUHAMMAD AMIN MAGSI
--S. 498---Customs Act (IV of 1969), Ss.156(1), 11, 12, 14, 14-A, 17, 21, 26, 32-A, 39, 77 & 82---Pre-arrest bail, grant of---Allegation
against accused who was Chief Officer in the Collectorate of Customs, was that he in connivance with officials had issued cheque s for
payment of rebate of customs duty in excess of entitlement and had caused a loss to the Government Excheque r---Conduct on part of
investigation agency itself was mala fide---None of the offences allegedly committed by accused were punishable with more than three years'
R.I. and did not fall within prohibitory clause of S.497, Cr. P. C. ---Challan in nine matters out of said cases against accused had already been
submitted before Trial Court where matters were ripe for trial and accused was no more required for further investigation in those cases---
Entire case of prosecution was based upon documentary evidence which was in possession of the said agency and prima facie there was no
possibility of tampering with same by accused---Accused had already been retired from service and he was more than sixty years of age---
Sending accused behind the bars would not serve any purpose as nothing was to be recovered from him---Interim pre-arrest bail already
granted to accused was confirmed.
Side Appellant : MUHAMMAD HANIF
---S. 497(2)---Penal Code (XLV of 1860), S.489-F---Bail, grant of---Further inquiry---cheque number, date, month and year was not
mentioned in F.I.R. ---Time when said cheque was delivered to the informant and before whom it was given, was also not mentioned---After
registration of F.I.R. cheque was got recovered by the police from accused, but recovery memo. did not contain any date, month or year
when it was recovered---All said facts required a thorough probe into the case, which could be made after evidence was brought on the
record by prosecution in the trial---Case of accused being a case of further inquiry, he was admitted to bail accordingly.
Side Appellant : Messrs SHAHEEN PUMPS (PVT.) LTD. through Chief Executive
Side Opponent : Messrs BEACON ENGINEERING INDUSTRY through Proprietor
--O.XXXVII, R.3(2)---Suit for recovery of money on the basis of dishonoured cheque s---Leave to defend---Conditional order---Condition
attached to leave to defend was not complied with, Trial Court dismissed application for leave to defend, recorded ex parte evidence and
passed a decree with costs and interest at rate 20% per annum---Validity---Defendant had failed to fulfil the condition subject to which leave
to defend was granted---Was the duty of the Court to pass a decree against the defendant in circumstances.
Side Appellant : MUHAMMAD ASIF
Side Opponent : MUHAMMAD JAVED AKHTAR
--O.XXXVII, Rr.1 & 2 & O.IX, R.13---Penal Code (XLV of 1860), S.489-F---Criminal Procedure Code (V of 1898), S.522-A---Availing of civil
and criminal remedies simultaneously---Validity---Defendant applied for cancellation of ex parte decree passed against him in suit for
recovery on basis of cheque , which was bounced on the score that since plaintiff had availed criminal remedy under S.489-F, P.P.C., suit
under O.XXXVII, Rr.1 & 2, C.P.C. filed against him was not maintainable---Said contention was repelled by High Court holding that civil suit
and criminal proceedings were two different remedies provided by law having different consequences as in commission of an offence,
punishment was provided while through civil suit, recovery proceedings were commenced and the amount which was established to have
been paid, was recovered, therefore, both these remedies being not overlapping could be simultaneously availed of by the person who had
been conferred such remedies by law---Subsection (3) of section 522-A, Cr.P.C. provided that a civil suit was not barred even in the presence
of said section---Exercise of right of filing of suit could not create any hindrance in way of lodging F.I.R. under S.489-F, P.P.C. and vice
versa---If different rights to commence proceedings of civil or criminal nature had sprung up with different results, those could be availed of
differently and maxim that "a man should not be vexed twice", would not be applicable in such a case---Application having filed about one
year from passing of the ex parte decree was clearly time-barred---Impugned order passed by appellate Court could not be interfere with, as
it had been passed within jurisdiction.
Side Appellant : GHULAM AHMED
---S.497---Emigration Ordinance (XVIII of 1979), Ss.17 & 22---Prevention and Control of Human Trafficking Ordinance (LIX of 2002), S.3---
Penal Code (XLV of 1860), 5.489-F---Bail, refusal of---Serious allegations had been levelled against the accused---Accused had not denied
having issued cheque s in favour of complainant which had been dishonoured---Filing of a Civil suit by the accused seeking cancellation of
certain documents, alleged to have been forcibly obtained from him, prima facie, appeared to be a device to make his case. one of further
inquiry---Mere old-age of 60 years of accused was not sufficient to release him on bail when he was involved in an offence falling within the
prohibitory clause of S.497(1), Cr.P.C.---Several other enquires of similar nature were also being conducted against the accused---Challan
had already been submitted in the trial Court---Bail was declined to accused in circumstances.

Side Appellant : Maj. (Rtd.) JAVED INAYAT KHAN KIYANI
---S. 489-F [as added vide S.2 of Criminal Law (Amendment) Ordinance (LXXXV of 2002)]---Object of S.489-F, P.P.C. was to curb the
fraudulent or dishonest issuance of cheque s to cause dishonest gain or to cause dishonest loss---Before approaching investigation agency or
launching a criminal prosecution, it was necessary to establish, prima facie, that cheque was issued dishonestly and with the intention to
defraud---To know the intention of a drawer, a payee could give a notice to the drawer after dishonour of cheque by the drawee and before
approaching the police or the Court---Word "dishonestly" employed in S.489-F, P.P.C. required conscious and serious examination.
---S. 498---Penal Code (XLV of 1860), S. 489-F---Pre-arrest bail, grant of---F.I.R. had shown that cheque in question was issued from joint
account of accused and co-accused to be encashed on specified date---Said cheque was signed by both of them, which had indicated that
they were partners and possibility of possession of cheque s jointly signed by them with co-accused could not be ruled out---Payment was
made to complainant despite letter of accused to the Bank that joint account be closed---Co-accused gave cheque to complainant who got it
encashed before accused could inform Bank not to encash any cheque from the joint account---On the basis of said payment in favour of
complainant, Investigating Officer, found that actual payment was made to complainant from the joint account and no wrongful loss was
caused to him---Police record also indicated that accused had informed the Bank that partnership between accused and his co-accused ended
and jointly signed cheque s be not honoured---Opinion of the police though was not binding, but it had a persuasive value in all criminal
matters including bail before arrest---cheque in question either was not issued by accused at all or it was issued jointly by accused and co-
accused---No harm came to co-accused from complainant side---If said cheque was issued dishonestly, then it was issued by both of them---
Agreement to buy machinery mentioned in F.I.R., might have existed between co-accused and complainant, accused had no obligation or
liability towards complainant which he failed to fulfil---Accused also did not owe any loan to complainant---Element of mala fides on part of
complainant, could not be ruled out in circumstances---Accused, who was a retired army officer and a businessman, had been declared
innocent by Investigating Officer---Interim bail granted to accused was confirmed, in circumstances.
---Ss. 2(d)(iv), 7, 20 & 22---Penal Code (XLV of 1860), S.489-F [as added vide S.2 of Criminal Law (Amendment) Ordinance (LXXXV of
2002)]---Recovery of loan---Procedure ---Object and reason for enacting Financial Institutions (Recovery of Finances) Ordinance, 2001 and
S.489-F, P.P.C., was to provide single forum to the Banks for the recovery of their loans from their customers and likewise to the customers
to approach the same Court if they had any grievance against the Banks---Word "loan" was substituted in P.P.C. with word "finance",
similarly, punishment of one year was substituted with three years in P.P.C.---Objective to legislate S.20(4) of Financial Institutions
(Recovery of Finances) Ordinance, 2001, was different than objective to legislate S.489-F, P.P.C., but S.489-F, P.P.C. had not been
legislated/drafted differently---Purpose of enacting said laws was to provide speedy measures for the recovery of outstanding loans and
finances---Under S.7 of Financial Institutions (Recovery of Finances) Ordinance, 2001, a Banking Court was conferred criminal jurisdiction to
try offences punishable under said Ordinance and for the purpose, same powers were vested as were vested in the Court of Session in Code
of Criminal Procedure, 1898---Banking Court could take cognizance of any offence under Financial Institutions (Recovery of Finances)
Ordinance, 2001 upon a complaint in writing made by a person authorized in that behalf by concerned Financial Institutions in respect of
which offence was committed---Whenever an offence was committed under S.20(4) of Financial Institutions (Recovery of Finances)
Ordinance, 2001, Banking Court. would take cognizance on a complaint filed by authorized person and the complaint would be tried by
concerned Banking Court---Appeal was- provided before two Judges of the High Court under S.22 of Financial Institutions (Recovery of
Finances) Ordinance, 2001---Under S.489-F, P.P.C., an F.I.R. was lodged with a concerned police station and after submission of final report,
jurisdiction of trial was conferred upon Magistrate of the First Class and appeal could be filed before concerned Sessions Judge---Section 489-
F, P.P.C. would be attracted where an individual would issue a cheque dishonestly in favour of another individual and the same was
dishonoured on presentation---Purpose of both enactments was different and the procedure for prosecution was also different---Banking Laws
relating to recovery, expressly or impliedly, envisaged effect of issuance of cheque "dishonestly" or "inadvertently".
Side Appellant : Dr. Sheikh ABDUR REHMAN
Side Opponent : Syed SAEED ALI through Legal Heirs
---S. 13---Constitution of Pakistan (1973), Art.199---Constitutional petition---"Tenant and his family"---Connotation---Use of rented premises
by tenant's family---Rights of tenants family members---Scope---Petitioner filed petition against respondents/original tenant and his real
brother respectively, seeking their ejectment from rented premises on ground of default in payment of rent and subletting without petitioner's
permission---Respondent/original tenant asserted that he did not sublet premises rather he along with his brother/respondent (No.2) formed
a partnership firm in rented premises and respondent (No.2) being his real brother, held joint tenancy right in rented premises, hence
question of subletting did not arise---Trial Court as well as Appellate Court dismissed petitioner's application for ejectment---Validity---Rent
deed showed that term "tenant/tenants" was interchangeably used for "the tenant and his family" who held dominant and beneficial lease
hold interest as tenants of demised premises from the very beginning---Petitioner's argument that use of premises was allowed to "the tenant
and his family" as a licence for family and not lease, was not maintainable---Had it been a licence for family then a suitable expression
restricting "the use" of property to the family would have been employed in rent agreement i.e., words could have been that "the landlord
permits the demised premises to be used by the tenant's family as well"---No diverture of interest or right of respondent (No.1) took place on
creating purported sub-tenancy upon exclusion of partnership---Partnership between his brothers was in consonance with rent agreement---
Petitioner landlord had been accepting rent through cheque s or otherwise from the firm account with signatures either of the two brothers
and for the last thirty years petitioner neither raised objection to nor sought ejectment on ground of subletting---Even in a previous petition
he omitted to plead subletting as a ground of ejectment----"Family members" included mother, brothers, and sisters of main tenant who were
entitled to continue occupation of rented premises on exist of main tenant and were to be treated as tenants under law---Judgments passed
by both Courts below did not suffer from any infirmity or lack of jurisdiction---Constitutional petition was dismissed.
Citation Name : 2006 PLD 523 KARACHI-HIGH-COURT-SINDH
Side Appellant : MUHAMMAD MATLOOB
--S. 12---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Interim injunction, grant of---Existence of valid agreement---Plaintiff relied
upon a receipt acknowledging payment of cheque s to defendants---Contention of plaintiff was that the receipt was a valid contract as it was
signed by the defendants and it was made out from the receipt that the amount was paid in consideration of sale of the suit property---Plea
raised by defendants was that the cheque s were not got encashed and were subject to maturity of the proposal---Validity---Receipt by itself
provided that cheque s would be encashed only on reaching agreement of sale---Fact that at the time of execution of receipt, parties were
not inclined to sell the property but wanted to enter into an agreement at subsequent date was established---No binding contract between the
parties thus existed---Plaintiff, therefore, failed to establish prima facie case in his favour for the grant of injunction---Question whether
parties reached a concluding contract or not depended upon the fact whether the parties were of one mind and all material terms were
finalized between them and they intended that the matter was closed and concluded between them---High Court declined to grant interim
injunction and application was dismissed.
Citation Name : 2006 PTD 2006 KARACHI-HIGH-COURT-SINDH
Side Appellant : Shaikh RASHID AHMED
Side Opponent : ASSISTANT COLLECTOR, SPECIAL RECOVERY CELL, COLLECTORATE OF CUSTOMS (EXPORTS), KARACHI and 4 others
---Ss.32 & 156 (1), item 14---Constitution of Pakistan (1973), Art.199--Constitutional petition---Untrue statement/false declaration---
Determination---Fraudulent claim of rebate---Recovery---Petitioners were not the exporters but had some transactions with exporters and
received certain amounts through crossed cheque s drawn by exporters---Department found that the exporters made fraudulent claim with
regard to duty draw back rebate thus notices were issued for refund of rebate---Petitioners being husband and wife inter se were also issued
such notices as husband had received the cheque s and wife was owner of the house---Validity---Only a person making false statement or a
false declaration before officer of customs could be held guilty of offences under S.32 of Customs Act, 1969 and could be subjected to penalty
under Item 14 of S.156 (1) of Customs Act, 1969---Amount erroneously paid could be refunded under S.32 (2) of Customs Act, 1969---When
Customs Authorities were misled into making payments to exporters, such amount could only be recovered from them and from no other
person---Nothing whatsoever was there even to infer that any allegation of any nature was ever made against wife by the authorities---
Coercive measures for recovery were being applied against the wife merely because of the fact that house where her husband was living
belonged to her---Such high-handedness on the part of officers vested with extensive powers for recovery of public revenues had to be
strongly discouraged---High Court set aside the notice issued against petitioners for recovery of duty draw back---Petition was allowed in
circumstances.
Side Appellant : Messrs SINDH SMALL INDUSTRIES CORPORATION
Side Opponent : SHAHZADO KHAN
----S.5(c)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.2(a)---"Banking Company", banking and 'financial
institution"---Meaning---Under S.5(c) of Banking Companies Ordinance, 1962, "Banking Company" meant any company which transacted
business of banking in Pakistan and section 5(b) of Banking Companies Ordinance, 1962, provided that "Banking" meant the accepting, for
the purpose of lending or investment, of deposits of money from public, repayable on demand or otherwise and withdrawable by cheque ,
draft, order or otherwise--- Section 2(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001, provided that a company whether
incorporated, within or outside of Pakistan which transacted business of banking or any associated or ancillary business in Pakistan through
its branches within or outside Pakistan including Government Saving Bank or a Moclaraba or its management company, loaning company,
investment bank, Venture Capital Company, Financing Company, Unit Trust or mutual fund of any kind and credit or investment institution,
Corporation or Company authorized by law to carry on any similar business through a notification in official gazette, fell within the ambit of
Financial Institution.
2006 P Cr. L J 994
[Lahore]
B e f o re A l i N a w a z C h o w h a n , J
MUHAMMAD YOUNIS and another----Petitioners
Versus
THE STATE and another----Respondents
Criminal Miscellaneous No.72-Q of 2005, decided on 1st December, 2005.
Criminal Procedure Code (V of 1898)---
----S. 561-A---Penal Code (XLV of 1860), S.489-F---Quashing of proceedings---Challan

in the case was submitted against all the persons named in the F.I.R.---Two accused
persons/petitioners moved application for their discharge, but the Trial Court refused to
discharge them despite the fact; that in report under S.173, Cr.P.C., both petitioners were
placed in Column No.2 with the remarks that they were innocent---Complainant had
specifically alleged that cheque in question was issued by person other than the
petitioners---High Court, on petition under S.561-A, Cr.P.C., had come to the conclusion
that case against petitioners could not proceed on the basis of record and directed the
Trial Court not to proceed against them with direction that case against petitioners would
be regarded having been cancelled.
Nadeem Shibli for Petitioners.
Muhammad Lived Iqbal for the Complainant.
Ch. Khurshid Anwar Bhinder, Addl. A.-G. for the State.
ORDER
ALI NAWAZ CHOWHAN, J.--- The matter pertains to case F.I.R. No.801 dated 12-11-
2003 registered under section 489-F, P.P.C. at Police Station Factory Area, District,
Faisalabad.
Relevant portion of the F.I.R. which was got recorded by Mian Muhammad Munir, the
complainant is as follows:--
The challan in this case was submitted against all the persons named in the F.I.R. An
application was moved For discharge of the petitioners Muhammad Arshad and
Muhammad Younas out of them. But it appears that the learned trial Court had refused to
discharge them. A Iv copy of the report under section 173, Cr.P.C. shows them both
placed in column No.2 with the remarks that they were innocent. After the challan was
submitted, an application was moved under section 249-A, Cr.P.C. asking for their
acquittal.
The learned trial Court while dismissing this application observed as follows:--
"My findings are that according to the contents of F.I.R. Arshad Younas, M. Younas and
Shahid Younas had obtained Rs.10,00,000 from the complainant for providing cinema
film material to the complainant and afterwards accused neither returned the amount nor
supplied the cinema film material to the complainant so these accused had criminally
misappropriated the amount of Rs.10,00,000 of the complainant and therefore, Arshad
Younas and M. Younas cannot be acquitted from this case on the ground that section
489-F is only applicable to accused Shahid Younas who had issued the cheque as in my
opinion section 406, P.P.C. is also attracted in the present case and this finding has also
been given by learned duty Magistrate vide order, dated 17-1-2004 and even learned
Additional Sessions Judge, FSD, vide his order, dated 15-2-2005 had not interfered the
findings of the learned duty Magistrate and learned Additional Sessions Judge, FSD,
had left this matter on the discretion of the trial Court so in my opinion under section
249-A, Cr.P.C. is not maintainable as present accused are nominated in the F.I.R. and
prosecution witnesses have supported the version of the complainant in their statements
under section 161, Cr.P.C."
It has been argued that section 489-F, P.P.C. is specific to the person who issues the
bounced cheque provided lie is also actuated with dishonesty. That for involving any
other person, there is requirement of adding of additional offence.
Initially, it was the argument of the learned counsel for the petitioners that section 406,
P.P.C. was added but he could not explain as to why section 406, P.P.C. was added.
Anyhow, the learned Additional Advocate-General has informed this Court that the
same has been deleted.
Learned counsel for the petitioners has also referred to a statement in a civil suit under
Order XXXVII, rule 1 filed by the complainant, wherein he appeared as a plaintiff to
specifically allege that 13 the check was issued by Muhammad Shahid Younas.
Certified copy of the statement of Mian Muhammad Munir, the complainant, has been
placed on record wherein he had said:--
This being the situation, one wonders whether on the basis of these facts the case under
section 489-F, P.P.C. could proceed against the present petitioners Muhammad Arshad
and Muhammad Younas. On the face of it, it appears that all efforts under the present
circumstances to prosecute these petitioners may not result in their conviction
ultimately and the case would only proceed against Muhammad Shahid Younas and if
this is a position, this Court feels that dismissal of the application under section 249-A,
Cr.P.C. was lack of exercise of jurisdiction.
Anyway, presently this is an application under section 561-A, of the Cr.P.C. for
quashment of proceedings as far as these two petitioners are concerned. As this Court
has come to the conclusion that the case against the petitioners Muhammad Younas and
Muhammad Arshad cannot proceed on the basis of the record available, it has no
hesitation in directing the trial Court not to proceed against the petitioners. The case
against them shall be regarded having been cancelled.
With these observations, the writ petition is disposed of.
H.B.T./M-117/L Petition allowed.

2007 Y L R 1378
[Lahore]
Before Muhammad Jehangir Arshad, J
SHAHZAD WASEEM and another---Petitioners
Versus
THE STATE---Respondent
Criminal Miscellaneous No.3874-B of 2006, decided on 19th December, 2006.
----S. 498---Penal Code (XLV of 1860), S.489-F---Pre-arrest bail, grant of---Cheque

in dispute was never issued by any of the accused persons, but was issued by the
brother of co-accused---Ad interim pre-arrest bail earlier granted to accused was
confirmed in circumstances.
Ch. Shehzad Aslam for Petitioners.
Syed Kashif Abbas Gillani for the Complainant.
Sh. Imtiaz Ahmad for the State and Rehmat Ali, A.S.-I. with Record.
ORDER
MUHAMMAD JEHANGIR ARSHAD, J.---Petitioners seek pre-arrest bail in case

F.I.R. No.429 dated 24-11-2006 under section 489-F, P.P.C. Police Station, City
Shujaabad.
2. It is submitted that in fact the cheque in question was issued by one Faisal brother of
Farrukh petitioner No.2. Learned counsel for the complainant also submits that in fact
their grievance was against Faisal who had issued the cheque but the police in order to
save the main culprit started interrogating the petitioners who have nothing to do with the
cheque in dispute.
3. Since the Cheque in dispute was never issued by any of these petitioners and was in
fact issued by Faisal, therefore, ad interim pre-arrest bail earlier granted to the petitioners
is hereby confirmed subject to their furnishing fresh bail bonds in the sum of Rs.50,000
each with one surety each in, the like amount to the satisfaction of learned trial Court.
The A.S.-I., present in Court, is directed to ensure that Faisal who has in fact issued the
cheque in dispute is joined with the investigation and investigation is carried out strictly
in accordance with law.
H.B.T./S-39/L Bail confirmed.
2007 Y L R 1264
[Lahore]
Before Muhammad Akhtar Shabbir, J
MUHAMMAD AKMAL KHAN---Petitioner
Versus
Criminal Miscellaneous No.1994-B of 2006, decided on 14th September, 2006.
----S. 497---Penal Code (XLV of 1860), Ss.468, 471, 420 & 489-F---Bail, grant of---
F.I.R. lodged with delay of four years---Litigation existed between parties---
Allegation against accused/petitioner was that he along with co-accused told
complainant that on payment of certain amount government land would be allotted in
his favour---Complainant alleged in F.I.R. that despite payment of amount to accused,
no land was got allotted to him, and when matter was reported to Punchayat accused
gave to complainant cheques which were later on' dishonoured---Complainant further
alleged that accused also issued forged receipt of bank to him about depositing of
money regarding allotment of land in his favour---Post-arrest bail of accused was
dismissed by Trial Court---Accused contended that there was delay of four years in
lodging of F.I.R.; that there was no signature on cheques and allotment letter allegedly
issued in favour of complainant and also on receipt of bank; that complainant himself
was involved in case registered under S. 489-F, P.P.C.---Validity---F.I.R. had been
lodged against accused and co-accused after delay of four years and offence under
Ss.468, 471 & 420, P.P.C. had been added later on---Offence under Ss.468 & 471,
P.P.C. were non-cognizable---Receipts allegedly issued by bank did not bear signature
of accused---Offences alleged against accused under Ss.468, 471 & 420, P.P.C. did not
fall within prohibitory clause of S.497, Cr. P. C. ---Complainant himself was involved
in case registered under S.489-F, P.P.C. which showed that there was litigation
between parties---Sufficient reasons were available to believe false involvement of
accused in commission of offence which brought his case within ambit of further
inquiry---Pre-arrest bail of co-accused had been confirmed by High Court, hence, rule
of consistency was attracted to case of accused as his case was at par with the co-
accused---Detention of accused for indefinite period was not to serve any useful
purpose---Accused/petitioner was admitted to post-arrest bail.
Muhammad Bilal Butt for Petitioner.
Muhammad Bukhsh Complainant in person.
Ch. Muhammad Akbar for the State with Shabbir Hussain, A.S.-I.
ORDER
MUHAMMAD AKHTAR SHABBIR, J.---The petitioner seeks post-arrest bail in a

case F.I.R. No.158 of 2005 dated 20-7-2005 registered at Police Station Jalilabad,
Multan for an offence under sections 468/471/420/489-F, P.P.C.
2. As per F.I.R., the facts of the casein brief are; that the petitioner along with his co-
accused namely Muhammad Ashraf, Ajmal Khan, Ahmad Nawaz came to the
complainant and told him that Government landed property is present in Bahawalpur
District and asked him that if he will pay Rs.5,89,050 then they will get allotted that
property to him. The complainant paid the said amount to the accused in shape of
cash, tractor: and agricultural instruments to all the accused. It is further alleged in the
F.I.R. that despite making payment to the accused the said landed property was not
got allotted to the complainant and when he contacted accused with regard to re-
payment of his money they refused to re-pay the same. Subsequently, the matter was
reported to Punchaiat where the accused gave the disputed cheques to the
complainant, which were later on dishonoured. It is also alleged in the F.I.R. that the
accused also issued a forged receipt of National Bank of Pakistan, Bahawalpur Branch
to the complainant about depositing of Rs.1,60,000 regarding the allotment of above
mentioned landed property.
3. Post-arrest bail of the petitioner was dismissed by the learned Additional Sessions
Judge, Multan vide his order dated 15-6-2006.
4. Learned counsel for the petitioner contends that there is a delay of four years in
lodging of the F.I.R. for which no plausible explanation has been narrated in the F.I.R.
The case has been registered against the petitioner on the basis of mala fide of the
police as well as complainant. Firstly the case was registered under section 489-F,
P.P.C. but later on with mala fide intention sections 468/471/420, P.P.C. have been
added. Further stated that complainant himself has issued two Cheques bearing No.
09037776 dated 17-3-2003 and 32878506 dated 2-4-2002 valuing Rs.2,00,000 each
respectively to the petitioner in the presence of the witnesses which had not been
encashed. Under the direction of the Court, F.I.R. No.439 of 2005 dated 19-10-2005
has been registered at Police Station Gulgasht, Multan against the complainant. He
has forcefully contended that there is no signature on the cheques, allotment letter
allegedly issued by the Collector and also deposit receipt in the National Bank.
5. The grant of bail has vehemently been opposed by the learned counsel for the State
as well as complainant.
6. I have heard the arguments of the learned counsel for the parties and perused the
record.
7. Admittedly there is delay of four years in lodging of the F.I.R. against the petitioner
and other co-accused. Offence under sections 468/471/420 have been added later on.
Offence under sections 468/471 are non-cognizable. Both the receipts of National
Bank showing deposit of Rs.1,60,000 allegedly deposited by the petitioner has not
been produced, which also does not bear the signature of the petitioner. The offences
are not covered within the prohibition as contained in section 497, Cr.P.C. Pre-arrest
bail of the co-accused Muhammad Ashraf has been confirmed by this Court vide order
dated 26-1-2006. Principle of consistency is attracted to this case as the case of the
petitioner is at par with the co-accused. It is also an admitted fact that there is
litigation between the parties. The complainant is also involved in the case F.I.R.
No.439 of 2005 dated 19-10-2005 registered under section 489-F. There are sufficient
reasons to believe false involvement of the petitioner in the commission of the offence
which bring the case of the petitioner within the ambit of further inquiry. The
petitioner is behind the bars and no useful purpose would be served by detaining him
in jail for an indefinite period. The petitioner is no more required by the police.
6. For the fore-going reasons and without prejudicing the merits of the case, this
petition is accepted and the petitioner is admitted to post-arrest bail subject to his
furnishing bail bonds in the sum of Rs.1,00,000 (rupees one lac), with two sureties
each in the like amount to the satisfaction of the learned trial Court/Area/Duty
Magistrate concerned.
S.M.B./M-579/L Bail
granted.
2007 P Cr. L J 388
[Lahore]
Before Khawaja Muhammad Sharif, J
Dr. MUHAMMAD RAMZAN AZAM----Petitioner
Versus
ARIF ALI and 2 others----Respondents
Criminal Miscellaneous No.9334/CB of 2006, decided on 24th November, 2006.

----Ss. 497(5) & 498---Penal Code (XLV of 1860), Ss.419, 420, 467, 468, 471 & 489-F---
Bail, cancellation of---No role whatsoever was attributed to co-accused in whole of the
F.I.R. and investigation---Application for cancellation of bail filed by
petitioner/complainant to the extent of co-accused, was dismissed---Prosecution evidence
revolved around accused who was main culprit in the case---Accused went to
petitioner/complainant and asked him to purchase plot in question by introducing another
co-accused as actual owner of plot in question---Accused was the person who had issued
cheque to complainant, but when complainant went to get said cheque encashed, he was
told by the Bank that account of accused had been closed---Accused was granted bail
before arrest---Validity---Consideration for grant of bail before arrest was totally different
from bail after arrest---Trial Court had granted bail to said accused on surmises and
conjectures---No case for grant of bail before arrest having been made out to the extent of
accused, application for cancellation of bail to his extent was accepted and bail granting
order was recalled accordingly.
PLD 2002 Lah. 164 rel.
Ch. Muhammad Rafique-IV for Petitioner.
Ch. Muhammad Hands Khatana, Addl. A.-G. along with M. Nazir Awan S.-I.
M.M. Alam for Respondent No.1.
Ms. Bushra Qamar for Respondent No.2.
ORDER
KHAWAJA MUHAMMAD SHARIF, J.---This is application for cancellation of bail

granted to the respondents.
2. Learned counsel for the petitioner submits that the respondents in connivance with
each other had committed fraud with the petitioner; that actual owner of the plot Tasleem
Khan was never produced; that bogus identity card of Tasleem Khan was produced; that
bogus persons were produced in order to commit fraud; that Arif Ali, Salta Bhatti and
Bootey Shah came together to the complainant and asked him to purchase the plot; that
cheque which was issued by Arif Ali was dishonoured; that now Saeed Ahmad has been
arrested who posed himself as Tasleem Khan who had died in Saudi Arabia; that Bootey
Shah is still at large; that Tahir who in fact had allegedly purchased the plot from Tasleem
Khan, he after getting ad interim bail had disappeared; that this is a bail before arrest; that
considerations for grant of bail before arrest and after arrest are totally different and that
no case for bail before arrest is made out.
3. Learned Additional Advocate-General submits that it was Aril Ali who had identified
Tasleem Khan; that he issued a cheque in favour of the complainant Dr. Muhammad
Ramzan; that he is the main culprit and introduced Muhammad Saeed as Tasleem Khan
who was actual owner of the plot.
4. Learned counsel for respondent Arif Ali submits that Arif Ali had issued a cheque but
he had not received any amount; that he had issued the cheque as security; that
considerations for grant of bail before arrest and cancellation of bail are totally different.
He has relied upon PLD 2002 Lah. 164 and adds that respondent had not misused the
concession of bail.
5. Learned counsel for Sana Bhatti submits that there is no allegation whatsoever on the
record to connect Sana Bhatti with the alleged offence.
6. Heard. First of all I will take up the case of Sana Bhatti. He for the first time went to
Dr. Muhammad Ramzan Azam complainant along with Bootey Shah and Tahir so no role
whatsoever is attributed to him in whole of the F.I.R. and in whole of investigation. As far
as bail granted to him is concerned, that should remain intact. This application to his
extent is dismissed.
7. As far as Arif Ali respondent is concerned, all the prosecution evidence revolves
around him. He is the main culprit in this case. He is the person who went to Dr.
Muhammad Ramzan Azam complainant. He is the person who had issued the cheque. He
is the person who stated that Tahir is his maternal-uncle and he had purchased the plot
from Tasleem Khan. Tahir has been arrested. He is the person who had issued the cheque
of Rs.8,00,000 to the complainant but later on when the complainant went to have the
said money, it was told by the Bank Authority that his account has been closed. If Arif Ali
was innocent, till today neither he nor Tahir who had got ad interim bail had filed suit
against Saeed Ahmad. Arif Ali had not filed any application under sections 22-A and 22-
B, Cr.P.C. for registration of the case against Saeed Ahmad. In fact they are conniving
with each other in this fraud. This is bail before arrest. Considerations for grant of bail
before arrest and after are totally different. Learned Additional Sessions Judge on
surmises and conjectures had granted bail before arrest to the respondents. In this view of
the matter, I am of the considered opinion that no case for bail before arrest is made out
to the extent of Arif Ali respondent. This petition to his extent is accepted and bail
granting order is hereby recalled.
H.B.T./M-682/L Order accordingly.
2006 C L D 1314
[Lahore]
Before Syed Shabbar Raza Rizvi, J
Manor (Retd.) JAVED INAYAT KHAN KIYANI---Petitioner

Versus
Criminal Miscellaneous No. 3399-B of 2006, decided on 29th June, 2006.
(a) Penal Code (XLV of 1860)---
---S. 489-F [as added vide S.2 of Criminal Law (Amendment) Ordinance (LXXXV of
2002)]---Object of S. 489-F, P.P.C. was to curb the fraudulent or dishonest issuance of
cheques to cause dishonest gain or to cause dishonest loss---Before approaching
investigation agency or launching a criminal prosecution, it was necessary to establish,
prima facie, that cheque was issued dishonestly and with the intention to defraud---To
know the intention of a drawer a payee could give a notice to the drawer after dishonour
of cheque by the drewee and before approaching the police or the Court---Word
"dishonestly" employed in S.489-F, P.P.C. required conscious and serious examination.
2005 PCr.LJ 1462 and Mian Hussain Ahmad Hyder v. S.H.O. and others 2005 YLR 1565
ref.
(b) Penal Code (XLV of 1860)---
----S. 24---Word "dishonestly", defined and explained---Language of S.24, P.P.C. was

explicit and conveyed that to constitute an act "dishonestly", it was important that
something should be done with the intention of causing wrongful gain or wrongful loss---
Wrongful gain could not be attained by wrong doer for himself only, but wrong doer
could cause gain or loss to any other person also---Person could be said to have dishonest
intention if in taking property it was his intention to cause gain by unlawful means of the
property to which the person was so gaining, was not legally entitled or to cause loss .by
wrongful means of property to which the person so losing was legally entitled and it was
further clear from definition of "dishonestly" that the gain or loss contemplated need not
be a total acquisition or a total deprivation, but was enough, if it was temporary retention
of property by the person wrongfully gaining or temporary "keeping out" the property
from the person, legally entitled.
PLD 1957 SC (India) 317 at 324 ref.
(c) Words and phrases---
----Dishonestly' defined and explained.
(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---
----Ss. 2(d)(iv), 7, 20 & 22---Penal Code (XLV of 1860), S.489-F [as added vide S.2 of
Criminal Law (Amendment) Ordinance (LXXXV Of 2002)]--Recovery of loan---
Procedure ---Object and reason for enacting Financial Institutions (Recovery of Finances)
Ordinance, 2001 and S.489-F, P.P.C., was to provide single forum to the Banks for the
recovery of their loans from their customers and like-wise to the customers to approach
the same Court if they had any grievance against the Banks---Word "loan" was
substituted in P.P.C. with word "finance", similarly, punishment of one year was
substituted with three years in P.P.C.---Objective to legislate S.20(4) of Financial
Institutions (Recovery of Finances) Ordinance, 2001, was different than objective to
legislate S.489-F, P.P.C., but S.489-F, P.P.C. had not been legislated/drafted differently--
Purpose of enacting said laws was to provide speedy measures for the recovers/of
outstanding loans and finances---Under S.7 of Financial Institutions (Recovery of
Finances) Ordinance, 2001, a Banking Court was conferred criminal jurisdiction to try
offences punishable under said Ordinance and for the purpose, same powers were vested
as were vested in the Court of Session in Code of Criminal Procedure, 1898---Banking
Court could take cognizance of any offence under Financial Institutions (Recovery of
Finances) Ordinance, 2001 upon a complaint in writing made by a person authorized in
that behalf by concerned Financial Institutions in respect of which offence was
committed---Whenever an offence was committed under S.20(4) of Financial Institutions
(Recovery of Finances) Ordinance, 2001, Banking Court would take cognizance on a
complaint filed by authorized person and the complaint would be tried by concerned
Banking Court --- Appeal was provided before two Judges of the High Court under S.22
of Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S.489-F, P.P.C.,
an F.I.R. was lodged with a concerned police station and after submission of final report,
jurisdiction of trial was conferred upon Magistrate of the First Class and appeal could be
filed before concerned Sessions Judge---Section 489-F, P.P.C. would be attracted where an
individual would issue a cheque dishonestly in favour of another individual and the same
was dishonoured on presentation---Purpose of both enactments was different and the
procedure for prosecution was also different---Banking Laws relating to recovery,
expressly or impliedly, envisaged effect of issuance of cheque "dishonestly" or
"inadvertently".
MZ Corporation v. MS Sky Lines Printing Press 1993 MLD 1764; 1993 MLD 1766; 1995
MLD 12; PLD 1993 SC 341; PLD 1986 SC 240; PLD 2002 SC 460; Ocean Industries
Limited and another v. Industrial Development Bank PLD 1966 SC 738 and M. A. Hameed
Puri v. Federation of Pakistan PLD 1979 Lah. 252, ref.
(e) Criminal Procedure Code (V of 1898)---
----S. 498---Penal Code (XLV of 1860), S. 489-F---Pre-arrest bail, grant of --- F.I.R. had
shown that cheque in question was issued from joint account of accused and co-accused to
be encashed on specified date---Said cheque was signed by both of them, which had
indicated that they were partners and possibility of possession of cheques jointly signed by
them with co-accused could not be ruled out---Payment was made to complainant despite
letter of accused to the Bank that joint account be closed---Co-accused gave cheque to
complainant who got it encashed before accused could inform Batik not to encash any
cheque from the joint account---On the basis of said payment in favour of complainant,
Investigating Officer, found that actual payment was made to complainant from the joint
account and no wrongful loss was caused to him---Police record also indicated that
accused had informed the Bank that partnership between accused and his co-accused
ended and jointly signed cheques be not honoured---Opinion of the police though was not
binding, but it had a persuasive value in all criminal matters including bail before arrest---
Cheque in question either was not issued by accused at all or it was issued jointly by
accused and co-accused---No harm came to co-accused from complainant side---If said
cheque was issued dishonestly, then it was issued by both of them---Agreement to buy
machinery mentioned in F.I.R., might have existed between co-accused and complainant,
accused had no obligation or liability towards complainant which he failed to fulfil---
Accused also did not owe any loan to complainant---Element of mala fides on part of
complainant, could not be ruled out in circumstances-- Accused, who was a retired army
officer and a businessman, had been declared innocent by Investigating Officer---Interim
bail granted to accused was confirmed, in circumstances.
Sardar Khurram Latif Khan Khosa for Petitioner.
Imtiaz Ahmad Kaifi for the Complainant.
Ijaz Ahmad Bajwa for the State and S. Raza Hussain, S. -I.
ORDER
SYED SHABBAR RAZA RIZVI, J.---The petitioner filed the present bail application for
pre-arrest bail in F.I.R.No.300 of 2006, dated 20-3-2006. The said F.I.R. was registered at
Police Station Allama Iqbal Town, Lahore under section 489-F, P. P. C.
2. Briefly, complainant Rana Tauqeer Sarwar Khan reported to the S.H.O. that in August,
2005, the petitioner and another person camel to him and introduced themselves as partners
in Basit Paper Mills, Ferozepur Road, Lahore. They also showed interest in buying second-
hand machinery of a paper mill which complainant wanted to sell. The price of the
machinery was agreed between the parties Rs. 8,89,000. Half of the payment, Rs.4,44,500
was made to the complainant there and. then and for half payment a cheque, from the joint
account, bearing No.CD-4808906, to be drawn on Union Bank, Allama Iqbal Town
Branch, Lahore was handed over to the complainant/payee. The said cheque was to be
encashed on 20-9-2005. On the said date i.e. 20-9-2005, the complainant deposited the said
cheque in his account but he was informed by his bank that the cheque was dishonoured
by the drawee. The complainant contacted the petitioner and his partners Syed Zafar Ali
Shah. Said Syed Zafar Ali Shah informed complainant that partnership between petitioner
and him had ended. However, he paid half of the amount i.e. 2,66,700. When the
complainant demanded from petitioner payment of his share, the petitioner refused to
make the payment. The complainant alleged that the petitioner had dishonestly issued
cheque to cause complainant wrongful loss.
3. Before I discuss and decide the present case, I consider it expedient and appropriate to
examine scope of section 489-F, P.P.C. at some length.
4. Cases of frauds through issuance of cheques 'dishonestly' have been rampant in the
country; therefore, appropriate legislation became desirable. In view of that, Ordinance
LXXXV of 2002, was issued and promulgated by the President of Pakistan on 25-10-
2002. Validity of this legislation was also challenged before this Court. In some
judgments, the legislation i.e. 489-F PPC was declared invalid and in some it was found
valid. For example, in my own judgment I held section 489-F, a valid piece of legislation;
reference may be made to 2005 PCr.LJ 1462. In another judgment section 489-F was
found as invalid and non-existing legislation. In this regard, Mian Hussain Ahmad Hyder
v. S.H.O. and others 2005 YLR 1565 is referred to.
5. However, this legislation requires interpretation, and ascertainment of the real

intendment for which section 489-F was legislated. In my humble view, the real objective
was to curb the fraudulent or dishonest issuance of cheques to cause dishonest gain or to
cause dishonest loss. Therefore, before approaching the investigation agency or launching
a criminal prosecution, it is necessary to establish, prima facie, that the cheque was issued
dishonestly and with the intention to defraud. For example, some times it is possible that
a drawer may issue a cheque not knowing exactly the position of his account. Generally
people are not very careful to maintain record of their accounts when they have money in
one bank or more than one banks. In the business and trade community practice of joint
account in the banks is very common. Account-holders of such joint accounts keep with
themselves prepaid cheques duly signed by joint account-holders to ensure payments
from the banks even in absence of' one of the partners. At times, such cheques are
misused also. To know the intention of a drawer, a payee may give a notice to the drawer
after dishonourment of cheque by the drawee and before approaching the police or the
Court.
6. In this regard word "dishonestly" employed in section 489-F, P.P.C. requires conscious
and serious examination; Section 489-F starts with these words, "whoever dishonestly
issues a cheque". In this phrase, the word "dishonestly" is of crucial importance,
therefore, to arrive at the real conclusion, definition of "dishonestly" requires a deeper
consideration/analysis. In Pakistan Penal Code section 24 reads as under:--
"Dishonestly:--Whoever does anything with the intention of causing wrongful gain to one
person or wrongful loss to another person is said to do that thing dishonestly."
7. The language is explicit and conveys that to constitute an act dishonestly, it is

important that something should be done with the intention of causing wrongful gain or
wrongful loss. This wrongful gain may not be attained by the wrong-doer for himself
only. The wrong doer may cause gain or loss to any other person also. "A person can be
said to have dishonest intention if in taking property it is his intention to cause gain, by
unlawful means of the property to which the person so gaining is not legally entitled or to
cause loss by wrongful means of property to which the person so losing is legally
entitled. It is further clear from the definition that the gain or loss contemplated need not
be a total acquisition or a total deprivation but is enough if it is temporary retention of
property by the person wrongfully gaining or temporary 'keeping out' of the property
from the person legally entitled". (PLD 1957 SC (India) 317 at 324).
In another case "dishonestly" was defined as below:
"Word "dishonestly" as defined in section 24 PPC means to do an act with intention of

causing wrongful gain to one and wrongful losses to the other." (K. Raza v. State, 1986
MLD 2624).
8. In The Law Laxicon Edited by Justice Y.B. Chandrachud, at page 567 "dishonesty" is
defined as giving the ordinary meaning the word "dishonestly" means "dishonesty". It
further elaborates dishonesty as disposition to lie, cheat, deceive, or defraud;
untrustworthiness, lack of integrity. Lack of honesty, probity or integrity in principle; lack
of fairness and straightforwardness, disposition, to defraud, deceive or astray.
Like Pakistan Penal Code, in section 24 of Indian Penal Code "dishonestly" is defined in
the similar words:
"Whoever does anything with the intention of causing wrongful gain to one person or
wrongful loss to another person is said to do that thing dishonestly."
Section 24 is further elaborated on the same page as below:
The word dishonestly in section 24 Indian Penal Code has a technical meaning which is
at variance with its popular sense as employing deviation from probity. It is used in
connection with property and has nothing to do with probity. If a person causes wrongful
gain or wrongful loss by unlawful means in respect of property to which he is not legally
entitled, "he acts dishonestly within the meaning of section 24, though he may act from
laudable motives. The word dishonestly does not necessarily imply wrongful gain to
accused himself."
9. From the definition narrated above, from both Pakistan and Indian Penal Codes, it is
clear that issuance of cheque has to be clothed with dishonesty and as stated above
dishonestly means intention to cause wrongful gain or wrongful loss.
10. In my opinion, this can only be inferred from the actual act/acts of the
drawer/accused. In India to ascertain the intention or mala fide of the drawer, the payee in
event of dishonourment is required to give notice to the drawer that the cheque has been
dishonoured. Reply in response to the notice or no reply at all, helps to determine the
presence or absence of element of dishonestly. To further elaborate this point, it is
important to refer to the Indian law on the same subject. However, before considering law
on the subject from Indian jurisdiction, more discussion will be relevant from our own
jurisdiction.
11. My learned brother Ali Nawaz Chohan, J. (in Criminal Miscellaneous No.1632-
CB/2006, Rana Muhammad Ayub v. Rana Abdul Rehman and another) rightly held that
provisions of section 489-F, P.P.C. have been lifted. From the Financial Institutions
(Recovery and Finances) Ordinance, 2001. The relevant section is 20(4). For further
elaboration sub-section (4) of section 20 of the Financial Institutions (Recovery and
Finances) Ordinance, 2001 and provisions of section 489-F of P.P.C. are placed side by
side.
Section 489-F, P.P.C. Section 20(4) of FI(R&F) Ord.

Whoever dishonestly issues a cheque Whoever dishonestly issues a cheque towards
towards repayment of a loan or fulfilment repayment of a finance or fulfilment of an
of an obligation which is dishonoured on obligation which is dishonoured on
presentation shall be punishable with presentation shall be punishable with
imprisonment which may extend to three imprisonment which may extend to one year
years or with fine or with both unless he or with fine or with both unless he can
can establish for which the burden of proof establish for which the burden of proof shall
shall rest on him that he had made rest on him that he had made arrangements
arrangements with his bank to ensure that with his bank to ensure that the cheque would
the cheque would be honoured and that the be honoured and that the bank was at fault in
bank was at fault in not honouring the not honouring the cheque.
cheque,
12. The reading of above two provisions of the above mentioned enactments shows that
only two words have been changed in section 489-F. The word "loan" is substituted in the
P.P.C. with word "finance"; similarly, punishment of one year is substituted with three
years in P.P.C.
13. The rest of the language in both the enactments is verbatim. I have no doubt in my
mind that objective to legislate section 20(4) of the Financial Institutions (Recovery and
Finances) Ordinance, 2001 was different than objective to legislate section 489-F, P.P.C.,
but section 489-F, P.P.C. has not been legislated/ drafted differently.
14. The Financial Institutions (Recovery of Finances) Ordinance, 2001 came into
existence in 2001 (XLVI 2001). The said Ordinance was enacted to repeal, and, with
certain modifications, re-enact, the Banking Companies (Recovery of Loans, Advances,
Credits and Finances) Act, 1997.
15. From the above, it is evident that the object and reason for enacting the above laws
was to provide the single forum to the Banks for the recovery of' their loans from their
customers and likewise to the customers to approach the same Court if they have any
grievance against the banks. It also appears that the purpose of enacting the above
mentioned laws was to provide speedy measures for the recovery of outstanding loans
and finances. Under section 7 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, a Banking Court is conferred criminal jurisdiction to try offences
punishable under the said Ordinance, and for the purpose the same powers are vested as
are vested in the Court of Session in the Court of Criminal Procedure, 1898. The Banking
Court can take cognizance of any offence under the Ordinance upon a complaint in
writing made by a person authorized in this behalf by the concerned Financial Institutions
in respect of which the offence was committed. Therefore, whenever an offence is
committed under section 20(4) of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, Banking Court shall take cognizance on a complaint filed by the
authorized person and the complaint shall be tried by the concerned Banking Court.
Appeal is provided before two Judges of the High Court under section 22 of the same
Ordinance 2001.
16. On the other hand, under section 489-F, an F.I.K. is lodged with a concerned Police
Station and after submission of final report, the jurisdiction of trial is conferred upon
Magistrate of the First Class and appeal can be filed before the concerned Sessions Judge.
Section 489-F, P.P.C. is attracted where an individual issues a cheque dishonestly in
favour of another individual and the same is dishonoured on presentation. Therefore, the
purpose of both enactments is different and the procedure for the prosecution is also
different. Banking laws relating to recovery, expressly or impliedly, envisage effect of
issuance of cheque "dishonestly" or "inadvertently". For example in MZ Corporation v.
Messrs Sky Lines Printing Press, 1993 MLD 1764, the appellant had purchased some
items of computer stationery from the respondent and issued a post-dated Cheque bearing
164673, dated 14-8-1998 drawn on Bank of Credit and Commerce International, for Rs.
14940, in favour of the respondent, thereafter, the date of the post-dated cheque was
further extended but when the cheque was presented by the respondent to the Bank, the
same was dishonoured with the remarks, "the payment stopped by drawer". The
respondent intimated the same to the appellant but the latter failed to make the payment
and under such circumstances, the suit was filed by the respondent against the appellants
before the learned trial Court. The trial Court as well as the Appellate Court refused to
accept the defence of the appellant as dishonesty on his part was established in the above
stated facts. (1993 MLD 1766). It may be pointed out that the above case/appeal was
filed under Banking Companies (Recovery of Loans) Ordinance, 1979 which was
substituted by the Banking Companies (Recovery of Loans, Advances, Credits and
Finances) Act, 1997 which was further substituted by existing enactment i.e. Financial
Institutions (Recovery of Finances) Ordinance, 2001. Therefore, the above mentioned
finding of his lordship Mamun Qazi, J. of Karachi High Court (as he then was) is relevant
and applicable to the interpretation of section 20(4) of the Financial Institution (Recovery
of Finances) Ordinance, 2001.
17. His lordship Abdul Majid Tiwana, J. in a case relating to recovery of Agricultural
Development Bank under the Agricultural Development Bank Ordinance, 1961 observed
as under:--
"No doubt, subsection (2) of section 25 supra, empowers the bank to recover all sums
due, which include the principal amount of loan and interest accruing thereon, as arrears
of land revenue but it cannot straightway resort to the coercive measures of arrest and
detention. (1995 MLD 12)."
18. The above mentioned two cases indicate that, "the drawer should be given an
opportunity to clear his liability or to ensure that the dishonoured cheque was issued
dishonestly". Other means should be resorted to, before application of coercive measures
including registration of an F.I.R. etc. Since the language of 489-F has been lifted from
the Banking Laws mentioned above, precautions, interpretations and considerations
provided and applied in the above laws should also be followed while dealing with cases
registered under section 489-F, P.P.C. Thus, the Court must apply its judicial mind to
consider whether the cheque was issued dishonestly, indeed, or whether the drawer was
provided opportunity to discharge his liability towards the payee or not?
19. In this regard as hinted at in para. 10, the prevalent law from the Indian jurisdiction
may also be considered.
20. It may be pointed out at the outset that Indian Legislature made dishonour of cheque
an offence under the Negotiable Instruments Act, 1881 instead of Indian Penal Code. In
this connection they added a new Chapter XVII in Negotiable Instruments Act, 1881. For
the purpose of benefit of all concerned, I hereby reproduce the statement of Objects and
Reasons of the Act which is as under:--
"Statement of Objects and Reasons.---The Negotiable Instruments Act, 1881 was

amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in
case of dishonour of cheques due to insufficiency of funds in the account of the drawer of
the cheque. These provisions were incorporated with a view to encourage the culture of
use of cheques and enhancing the credibility of the instrument. The existing provisions in
the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have
been found deficient in dealing with dishonour of cheques. Not only the punishment
provided in the Act has proved to be inadequate, the procedure prescribed for the Courts
to deal with such matters has been found to be cumbersome. The Courts are unable to
dispose of such cases expeditiously in a time bound manner in view of the procedure
contained in the Act.
2. A large number of cases are reported to be pending under sections 138 to 142 of the
Negotiable Instruments Act in various courts in the country. Keeping in view the large
number of complaints under the said Act pending in various Courts, a Working Group
was constituted to review section 138 to the Negotiable Instruments Act, 1881 and make
recommendations as to what changes were needed to effectively achieve the purpose of
that section.
3. The recommendations of the Working Group along with other representations from
various institutions and organizations were examined by the Government in consultation
with the Reserve Bank of India and other legal experts, and a Bill, namely, the Negotiable
Instruments (Amendment) Bill, 2001 was introduced in the Lok Sabha on 24th July,
2001. The Bill was referred to Standing Committee on Finance which made certain
recommendations in its report submitted to Lok Sabha in November, 2001.
4. Keeping in view the recommendations of the Standing Committee on Finance and

other representations, it has been decided to bring out, inter alia, the following
amendments in the Negotiable Instruments Act, 1881, namely:--
(i) to increase the punishment as prescribed under the Act from one year to two years;
(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to
30 days;
(iii) to provide discretion to the Court to waive the period of one month, which has been
prescribed for taking cognizance of the case under the Act;
(iv) to prescribe procedure for dispensing with preliminary evidence of the complainant;
(v) to prescribe procedure for servicing of summons to the accused or witness by the
Court through speed post or empanelled private couriers;
(vi) to provide for summary trial of the cases under the Act with a view to speeding up
disposal of cases;
(vii) to make the offences under the Act compoundable;
(viii) to exempt those directors from prosecution under section 141 of the Act who are
nominated as directors of a company by virtue of their holding any office or employment
in the Central Government or State Government or a financial corporation owned or
controlled by the Central Government, or the State Government, as the case may be;
(ix) to provide that the Magistrate trying an offence shall have power to pass sentence of
imprisonment for a term exceeding one year and amount of fine exceeding five thousand
rupees;
(x) to make the Information Technology Act, 2000 applicable to the Negotiable
Instruments Act, 1881 in relation to electronic cheques and truncated cheques subject to
such modifications and amendments as the Central Government, in consultation with the
Reserve Bank of India, considers necessary for carrying out the purpose of the Act, by
notification in the Official Gazette; and
(xi) to amend definitions of "bankers' books" and "certified copy" given in the Bankers'
Books Evidence Act, 1891.
5. The proposed amendments in the Act are aimed at early disposal of cases relating to
dishonour of cheques, enhancing punishment for offenders, introducing electronic image
of a truncated cheque and a cheque in the electronic form as well exempting an official
nominee director from prosecution under the Negotiable Instruments Act, 1881.
6. The Bill seeks to achieve the above objects."
21. Through the above amendment sections 138 to 147 were added in the Negotiable
Instruments Act 1881 which are also reproduced herein for benefit and convenience:--
"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 persons 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 provision of this Act, be punished with
imprisonment for a term which may be extended to two years. Substituted by the
Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (55 of
2002), S. 7, for "a term which may extend to one year" (w.e.f. 6-2-2003) 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) (Substituted by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), S.7, for "within
fifteen days" (w.e.f. 6-2-2003), of the receipt of information by him 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 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.
139. Presumption in favour of holder.---It shall be presumed, unless the contrary is

proved, 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.
140. Defence which may not be allowed in any prosecution under section 138.-It shall not
be a defence in a prosecution for an offence under section 138 that the drawer had no
reason to believe when he issued the cheque that the cheque may be dishonoured on
presentment for the reason stated in that section.
141. Offences by companies.-(1) If the person committing an offence under section 138 is
a company, every person who, at the time the offence was committed, was in charge of,
and was responsible to the company for the conduct of the business of the company, as
well as the company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly:
Provided that nothing contained in this subsection shall render any person liable to
punishment if he proves that the offence was committed without his knowledge, or that
he had exercised all due diligence to prevent the commission of such offence:
[Provided further that where a person is nominated as a Director of a company by virtue

of his holding any office or employment in the Central Government or State Government
or a financial corporation owned or controlled by the Central Government of the State
Government, as the case may be, he shall not be liable for prosecution under this
Chapter.]
(Inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act,

2002 (55 of 2002), S.8 (with effect from 6-2-2003).
(2) Notwithstanding anything contained in subsection (1), where any offence under this
Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to, any neglect on the part
of, any director, manager, secretary or other officer of the company, such director,
manager, secretary or other office shall also be deemed to be guilty of that offence and
shall be liable to be proceeded against and punished accordingly.
Explanation.---Far the purposes of this section.---
(a) "Company" means anybody corporate and includes a firm or other, association of
individuals; and
(b) "director", in relations to a firm, means a partner in the firm.
142. Cognizance of offences.-Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974),--
(a) no Court shall take cognizance of any offence punishable under section 138 except
upon a complaint, in writing, made by the payee or, as the case may be, the holder in due
course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action
arises under clause (c) of the proviso to section 138:
(Provided that the cognizance of a complaint may be taken by the Court after the
prescribed period, if the complainant satisfies the Court that he had sufficient cause for
not making a complaint within such period;) [Inserted by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), S.9 (with effect
from 6-2-2003).
(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the
first class shall try any offence punishable under section 138.
143. Power of Court to try cases summarily.---(1) Notwithstanding anything contained in

the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Chapter shall
be tried by a Judicial Magistrate of the first class or by a Metropolitan Magistrate and the
provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be,
apply to such trials:
Provided that in the case of any conviction in a

Summary trial under this section, it shall be lawful for the Magistrate to pass a sentence
of imprisonment for a term not exceeding one year and an amount of fine exceeding five
thousand rupees:
Provided further that when at the commencement of, or in the course of, a summary trial
under this section, it appears to the Magistrate that the nature of the case is such that a
sentence of imprisonment for a term exceeding one year may have to be passed or that it
is, for any other reason, undesirable to try the case summarily, the Magistrate shall after
hearing the parties, record an order to that effect and thereafter recall any witness who
may have been examined and proceed to hear or re-hear the case in the manner provided
by the said Code.
2. The trial of a case under this section shall, so far as practicable , consistently with the
interests of justice, be continued from day to day until its conclusion, unless the Court
finds the adjournment of the trial beyond the following day to be necessary for reasons to
be recorded in writing.
3. Every trial under this section shall be conducted as expeditiously as possible and an
endeavour shall be made to conclude the trial within six months from the date of filing of
the complaint.
144. Mode of service' of summons.-(l) Notwithstanding anything contained in the Code

of Criminal Procedure, 1973 (2 to 1974), and for the purposes of this Chapter, a
Magistrate issuing a summons to an accused or a witness may direct a copy of summons
to be served at the place where such accused or witness ordinarily resides or carries on
business or personally works for gain, by speed post or by such courier services as are
approved by a Court of Session.
(2) Where an acknowledgement purporting to be signed by the accused or the witness or

an endorsement purported to be made by any person authorized by the postal department
or the courier services that the accused or the witness refused to take delivery of
summons has been received, the Court issuing the summons may declare that the
summons has been duly served.
145. Evidence on affidavit.-(l) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by
him on affidavit and may, subject to all just exceptions be read in evidence in any
enquiry, trial or other proceeding under the said Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the
accused, summon and examine any person giving evidence on affidavit as to the facts
contained therein.
146. Bank's slip prima facie evidence of certain facts.---The Court shall, in respect of
every proceeding under this Chapter, on production of bank's slip or memo. having
thereon the official mark denoting that the cheque has been dishonoured, presume the fact
of dishonour of such cheque, unless and until such fact is disproved.
147. Offences to be compoundable.---Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be
compoundable."
22. As compared to above, we do not find any deliberations, discussions of any

Committee, etc., when Criminal Law (Amendment) Ordinance, 2002, was enacted to
amend the Pakistan Penal Code and the Code of Criminal Procedure through the above
Ordinance. In the said Ordinance, not only 489-F was inserted in the Pakistan Penal
Code, sections 32, 260, 261 and 345 along with Schedule II were also amended. As a
matter of fact, it appears as elaborated above language of section 489-F was lifted from
subsection (4) of section 20 of Financial Institutions (Recovery of Finances), Ordinance,
2001 without any serious thought or discussion. Thus, it is suggested to the concerned
Government that section 489-F, P.P.C. may be suitably amended; to ascertain whether the
cheque was dishonestly issued by the drawer? This Court cannot make such
recommendation to the Legislatur9, however, it is permissible under the Constitution and
it is also in the interest of people to make such suggestion to the Government to consider
and initiate amendment in section 489-F, P.P.C. Some earlier decision may be referred to
in this regard i.e. PLD 1993 SC 341, PLD 1986 SC 240 and PLD 2002 SC 460. In the
said judgments suggestions fbr enactment/amendment were made to the Government.
23. The word 'Loan' employed in section 489-F, P.P.C. is k' also very significant.
This word is not defined in the Pakistan Penal Code. However, it is defined in section
2(d)(iv) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and in view
of the background of enactment of section 489-F, P.P.C., as elaborated above, the
definition in the Financial Institutions (Recovery of Finances) Ordinance, 2001 would be
relevant for the present purpose. In the said Ordinance 'Loan' is not independently
defined. As a matter of fact, the word 'Finance' is defined in the above mentioned section
which also include 'Loan' and it means, Advance, Cash Credit, Over Draft, Packing
Credit, a bill discounted and purchased or any other financial accommodation provided
by a financial institution to a customer. Loan, according to Wharton's Law Lexicon is
anything lent or given to another on condition of return or payment. This lending or
giving on condition of return or payment could be by operation of law. Similar definition
was approved by their Lordships of the Supreme Court in Ocean Industries Limited and
another v. Industrial Development Bank PLD 1966 SC 738 + M.A. Hameed Puri v.
Federation of Pakistan PLD 1979 Lahore 252. In another interpretation, the essentials of
a 'loan' according to section 2(12) are, (1) an advance which may be in money or in kind
(2) the advance must carry the interest and (3) there must be condition of repayment. One
of the essential condition in the definition of 'loan' in the Bengal Money Lender Act is
repayment with interest. (The Law Lexicon edited by Justice Y.V. Chandrachud, page
1140). Another phrase used in section 489-F is also worth-consideration "or fulfilment of
obligation". The word 'obligation' is defined in Oxford Dictionary as 'the state of being
forced to do something because it is your duty, or because of law'. (Oxford Advance
Learner's Dictionary 7th Edition, page 1045). In accordance with Law Lexicon
'obligation' means a duty, the bond of legal necessity which binds together two or more
determinate individuals, an act which binds a person to some performance, a binding or
state of being bound in law; an act by which a person becomes bound to another or for
another, or to forbear something etc. (The Law Lexicon edited by Y.V. Chandrachud,
page 1335). According to Black's Law Dictionary, 'obligation' means a legal or moral
duty to do or not do something. The word has many wide and varied meanings. It may
refer to anything that a person is bound to do or forbear from doing, whether the duty is
imposed by a law, contract, promise, social relations, courtesy, kindness, or morality. A
formal binding agreement or acknowledgment of a liability to pay a certain amount or to
do certain thing for a particular person or set of persons, especially a duty arising by
contract.
24. After having discussed above the law on the subject, I revert to the arguments
of the learned counsel in the present case. The learned counsel for the petitioner
contended that there was no agreement or deal between the petitioner and complainant to
purchase any machinery, etc. The learned counsel further contended that there might be
some agreement between one Syed Zafar Ali Shah and complainant. In this regard, he
submitted a writing between Rana Tauqeer Khan (complainant) and Syed Zafar Ali Shah
dated 19-6-2005. The learned counsel for the petitioner further submitted that there was a
partnership between petitioner and said Syed Zafar All Shah which dissolved after some
time as serious disputes developed between both of them. In this regard, he referred to a
suit for dissolution of partnership filed on 20-8-2005. He further submitted that both
criminal and civil litigation is pending between the petitioner and said Syed Zafar Ali
Shah, the instant F.I.R. has been manoeuvred by said Zafar All Shah as a counterblast of
F.LRs. registered against him on applications of the petitioner. In this regard, he refers to
F.I.R. No.599 of 2005 and F.I.R.No.656 of 2005. He also submitted that Cheque No.CD-
4808906 shows that it was not issued by the petitioner, it was jointly signed by petitioner
and Zafar Ali Shah, that also proves that they were partners at one time. He further
submitted that Investigating Officer as well as D.S.P. Legal in his opinion declared
petitioner innocent and it was also observed by the I.O. that the complainant had received
the actual amount, therefore, no wrongful loss was caused to him.
25. The learned counsel for the complainant submitted that the petitioner and
Zafar All Shah had become partners on 25-6-2005 in Basit Paper Mills, Ferozepur Road,
Lahore. He further submitted that Cheque No.CD-4808906 was dishonestly issued by the
petitioner which was dishonoured. Said Zafar Ali Shah paid half of the amount but the
petitioner refused to make payment, therefore, the complainant was caused wrongful loss
by the petitioner. He further submitted that though the petitioner was declared innocent
by the police but opinion of the police is not binding on the Court.
26. The learned counsel for the State and I.O. present in the Court endorsed
submission of the learned counsel for the petitioner that after a thorough investigation,
the petitioner has been found innocent. The report of the I.O. was also verified by D.S.P.
Legal. The learned counsel for the State further submitted that no wrongful loss was
caused to the complainant.
27. I have heard all the there learned counsel. I have also examined the record of
this case myself. The F.I.R. shows that Cheque No.CD-4808906 was issued from joint
account of the petitioner and Zafar Ali Shah to be encashed on 20-9-2005. The cheque
was signed by both of them, therefore, it prima facie, indicates that they were partners
and possibility of possession, of cheques jointly signed by them, with Zafar Ali Shah
cannot be ruled out. Another point to note is a letter from the Operations Manager, Union
Bank Limited. A.I.T. Branch, Lahore which informed petitioner: "as per your request
dated 5-5-2006, it is hereby confirmed that an amount of Rs.4,44,500 vide Cheque
No.CD-4808905 has been debited on the same date from your joint account with Zafar
All Shah Account No.7409-187749-001. It may be pointed out that it is the same joint
account number which is mentioned above. The payment was made to the complainant
despite letter of the petitioner to the bank that joint account be closed. Zafar All Shah
gave Cheque No.CD-4808905 to the complainant who got it encashed before petitioner
could inform bank not to encash any cheque from the joint account. On the basis of this
payment in favour of the complainant, the I.O. held that actual payment was made to the
complainant from the joint account and no wrongful loss was caused to him. The mention
of these two Cheques i.e. CD-4808905 and CD-4808906 clearly strengthen the
contention of the learned counsel for the petitioner that said Zafar Ali Shah was in
possession of jointly signed cheques, he used one for payment to the complainant and one
to cause registration of the present F.I.R. The police record also indicates that the
petitioner had informed the bank that partnership between petitioner and said Zafar Ali
Shah ended and jointly signed cheques be not honoured. The complainant helped Zafar
All Shah by getting registered the present F.I.R. against petitioner as two F.I.Rs. already
stand registered against Zafar Ali Shah at instance of the petitioner. Copies of F.I.Rs. and
suits are also available on the record which is sufficient proof to indicate possibility of
mala fide on part of the complainant and said Zafar All Shah. The opinion of the police is
not binding however, it has a persuasive value in all criminal matters including bail
before arrest.
28. The above facts lead to the inference that Cheque No.CD-4808906 was either
not issued by the petitioner at all or it was issued jointly by Zafar All Shah and petitioner.
No harm came to said Zafar Ali Shah from the complainant side. If the said cheque was
issued dishonestly, then it was issued by both of them. The record as well as opinion of
I.O. shows that amount of Rs.4,44,500 was actually debited from the joint Account
No.7409-1 87749-00 1 vide Cheuqe No.CD-4808905 in favour of the complainant, thus,
no wrongful loss has been caused to the complainant by dishonour of Cheque No.CD-
4808906.
29. The above discussion and police record also shows that agreement to buy the
machinery mentioned in the F.I.R. might have existed between Zafar Ali Shah and the
complainant nevertheless; the petitioner had no obligation or liability towards the
complainant which he failed to fulfil. Similarly, petitioner did not owe any loan to the
complainant. The foregoing discussion also leads to the belief that element of mala fide
on part of the .complainant, in the above J circumstances, cannot be ruled out. The
petitioner is a retired army officer and a businessman. The I.O. has also declared him
innocent. Therefore, in view of the reasons enumerated in the preceding paragraphs, this
bail application for pre-arrest bail is allowed subject to petitioner's furnishing fresh surety
bonds in the sum of Rs.100,000 with one surety in the like amount to the satisfaction of
the Deputy Registrar (J) of this Court. The interim bail granted to the petitioner vide
order of his Court dated 4-5-2006 is confirmed.
H.B.T./J-22/L Bail confirmed.
L D 2006 Lahore 752
Before Syed Shabbar Raza Rizvi, J
Maj. (Rtd.) JAVED INAYAT KHAN KIYANI---Petitioner
Versus
Criminal Miscellaneous No. 3399-B of 2006, decided on 29th June, 2006.
(a) Penal Code (XLV of 1860)---
----S. 489-F [as added vide S.2 of Criminal Law (Amendment) Ordinance (LXXXV of
2002)]---Object of S.489-F, P.P.C. was to curb the fraudulent or dishonest issuance of
cheques to cause dishonest gain or to cause dishonest loss---Before approaching
investigation agency or launching a criminal prosecution, it was necessary to establish,
prima facie, that cheque was issued dishonestly and with the intention to defraud---To
know the intention of a drawer, a payee could give a notice to the drawer after dishonour
of cheque by the drawee and before approaching the police or the Court---Word
"dishonestly" employed in S.489-F, P.P.C. required conscious and serious examination.
2005 PCr.LJ 1462 and Mian Hussain Ahmad Hyder v. S.H.O. and others 2005 YLR 1565
ref.
(b) Penal Code (XLV of 1860)---
----S. 24---Word "dishonestly", defined and explained---Language of S.24, P.P.C. was

explicit and conveyed that to constitute an act "dishonestly", it was important that
something should be done with the intention of causing wrongful gain or wrongful loss---
Wrongful gain could not be attained by wrong doer for himself only, but wrong doer
could cause gain or loss to any other person also---Person could be said to have dishonest
intention if in taking property it was his intention to cause gain by unlawful means of the
property to which the person was so gaining, was not legally entitled or to cause loss by
wrongful means of property to which the person so losing was legally entitled and it was
further clear from definition of "dishonestly" that the gain or loss contemplated need not
be a total acquisition or a total deprivation, but was enough, if it was temporary retention
of property by the person wrongfully gaining or temporary "keeping out" the property
from the person, legally entitled.
PLD 1957 SC (India) 317 ref.
(c) Words and phrases---
----"Dishonestly" defined and explained.
(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---
----Ss. 2(d)(iv), 7, 20 & 22---Penal Code (XLV of 1860), S.489-F [as added vide S.2 of
Criminal Law (Amendment) Ordinance (LXXXV of 2002)]---Recovery of loan---
Procedure ---Object and reason for enacting Financial Institutions (Recovery of Finances)
Ordinance, 2001 and S.489-F, P.P.C., was to provide single forum to the Banks for the
recovery of their loans from their customers and likewise to the customers to approach
the same Court if they had any grievance against the Banks---Word "loan" was
substituted in P.P.C. with word "finance", similarly, punishment of one year was
substituted with three years in P.P.C.---Objective to legislate S.20(4) of Financial
Institutions (Recovery of Finances) Ordinance, 2001, was different than objective to
legislate S.489-F, P.P.C., but S.489-F, P.P.C. had not been legislated/drafted differently---
Purpose of enacting said laws was to provide speedy measures for the recovery of
outstanding loans and finances---Under S.7 of Financial Institutions (Recovery of
Finances) Ordinance, 2001, a Banking Court was conferred criminal jurisdiction to try
offences punishable under said Ordinance and for the purpose, same powers were vested
as were vested in the Court of Session in Code of Criminal Procedure, 1898---Banking
Court could take cognizance of any offence under Financial Institutions (Recovery of
Finances) Ordinance, 2001 upon a complaint in writing made by a person authorized in
that behalf by concerned Financial Institutions in respect of which offence was
committed---Whenever an offence was committed under S.20(4) of Financial Institutions
(Recovery of Finances) Ordinance, 2001, Banking Court. would take cognizance on a
complaint filed by authorized person and the complaint would be tried by concerned
Banking Court---Appeal was- provided before two Judges of the High Court under S.22
of Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S.489-F,
P.P.C., an F.I.R. was lodged with a concerned police station and after submission of final
report, jurisdiction of trial was conferred upon Magistrate of the First Class and appeal
could be filed before concerned Sessions Judge---Section 489-F, P.P.C. would be attracted
where an individual would issue a cheque dishonestly in favour of another individual and
the same was dishonoured on presentation---Purpose of both enactments was different
and the procedure for prosecution was also different---Banking Laws relating to recovery,
expressly or impliedly, envisaged effect of issuance of cheque "dishonestly" or
"inadvertently".
M. Z. Corporation v. MS Sky Lines Printing Press 1993 MLD 1764; 1993 MLD 1766;
1995 MLD 12; PLD 1993 SC 341; PLD 1986 SC 240; PLD 2002 SC 460; Ocean
Industries Limited and another v. Industrial Development Bank PLD 1966 SC 738 and
M. A. Hameed Puri v. Federation of Pakistan PLD 1979 Lah. 252 ref.
(e) Criminal Procedure Code (V of 1898)---
----S. 498---Penal Code (XLV of 1860), S. 489-F---Pre-arrest bail, grant of---F.I.R. had
shown that cheque in question was issued from joint account of accused and co-accused
to be encashed on specified date---Said cheque was signed by both of them, which had
indicated that they were partners and possibility of possession of cheques jointly signed
by them with co-accused could not be ruled out---Payment was made to complainant
despite letter of accused to the Bank that joint account be closed---Co-accused gave
cheque to complainant who got it encashed before accused could inform Bank not to
encash any cheque from the joint account---On the basis of said payment in favour of
complainant, Investigating Officer, found that actual payment was made to complainant
from the joint account and no wrongful loss was caused to him---Police record also
indicated that accused had informed the Bank that partnership between accused and his
co-accused ended and jointly signed cheques be not honoured---Opinion of the police
though was not binding, but it had a persuasive value in all criminal matters including
bail before arrest---Cheque in question either was not issued by accused at all or it was
issued jointly by accused and co-accused---No harm came to co-accused from
complainant side---If said cheque was issued dishonestly, then it was issued by both of
them---Agreement to buy machinery mentioned in F.I.R., might have existed between co-
accused and complainant, accused had no obligation or liability towards complainant
which he failed to fulfil---Accused also did not owe any loan to complainant---Element
of mala fides on part of complainant, could not be ruled out in circumstances---Accused,
who was a retired army officer and a businessman, had been declared innocent by
Investigating Officer---Interim bail granted to accused was confirmed, in circumstances.
Sardar Khurram Latif Khan Khosa for Petitioner.
Imtiaz Ahmad Kalil for the Complainant.
Ijaz Ahmad Bajwa for the State.
S. Raza Hussain, S.-I.

ORDER
SYED SHABBAR RAZA RIZVI, J.---The petitioner filed the present bail application
for pre-arrest bail in F.I.R.No.300 of 2006, dated 20-3-2006. The said F.I.R. was
registered at Police Station Allama Iqbal Town, Lahord under section 489-F, P.P.C.
2. Briefly, complainant Rana Tauqeer Sarwar Khan reported to the S.H.O. that in August,
2005, the petitioner and another person came to him and introduced themselves as
partners in Basit Paper Mills, Ferozepur Road, Lahore. They also showed interest in
buying second-hand machinery of a paper mill which complainant wanted to sell. The
price of the machinery was agreed between the parties Rs.8,89,000. Half of the payment,
Rs.4,44,500 was made to the complainant there and then and for half payment a cheque,
from the joint account, bearing No.CD-4808906, to be drawn on Union Bank, Allama
Iqbal Town Branch, Lahore was handed over to the complainant/payee. The said cheque
was to be encashed on 20-9-2005. On the said date i.e. 20-9-2005, the complainant
deposited the said cheuque in his account but he was informed by his bank that the
cheque was dishonoured by the drawee. The complainant contacted the petitioner and his
partner Syed Zafar Ali Shah. Said Syed Zafar Ali Shah informed complainant that
partnership between petitioner and him had ended. However, he paid half of the amount
i.e. Rs.2,66,700. When the complainant demanded from petitioner payment of his share,
the petitioner refused to make the payment. The complainant alleged that the petitioner
had dishonestly issued cheque to cause complainant wrongful loss.
3. Before I discuss and decide the present case, I consider it expedient and appropriate to
examine scope of section 489-F, P.P.C. at some length.
4. Cases of frauds through issuance of cheques `dishonestly' have been rampant in the
country; therefore, appropriate legislation became desirable. In view of that, Ordinance
LXXXV of 2002, was issued and promulgated by the President of Pakistan on 25-10-
2002. Validity of this legislation was also challenged before this Court. In some
judgments, the legislation i.e. 489-F, P.P.C. was declared invalid and in some it was found
valid. For example, in my own judgment I held section 489-F, a valid piece of legislation;
reference may be made to 2005 PCr.LJ 1462. In another judgment section 489-F was
found as invalid and non-existing legislation. In this regard, Mian Hussain Ahmad Hyder
v. S.H.O. and others 2005 YLR 1565 is referred to.
5. However, this legislation requires interpretation, and ascertainment of the real

intendment for which section 489-F was legislated. In my humble view, the real objective
was to curb the fraudulent or dishonest issuance of cheques to cause dishonest gain or to
cause dishonest loss. Therefore, before approaching the investigation agency or launching
a criminal prosecution, it is necessary to establish, prima facie, that the cheque was issued
dishonestly and with the intention to defraud. For example, sometimes it is possible that a
drawer may issue a cheque not knowing exactly the position of his account. Generally
people are not very careful to maintain record of their accounts when they have money in
one bank or more than one banks. In the business and trade community practice of joint
account in the banks is very common. Account-holders of such joint accounts keep with
themselves prepaid cheques duly signed by joint account-holders to ensure payments
from the banks even in absence of one of the partners. At times, such cheques are
misused also. To know the intention of a drawer, a payee may give a notice to the drawer
after dishonourment of cheque by the drawee and before approaching the police or the
court.
6. In this regard word "dishonestly" employed in section 489-F, P.P.C. requires conscious
and serious examination; section 489-F starts with these words, "whoever dishonestly
issues a cheque". In this phrase, the word "dishonestly" is of crucial importance,
therefore, to arrive at the real conclusion, definition of "dishonestly" requires a deeper
consideration analysis. In Pakistan Penal Code section 24 reads as under:
"Dishonestly.--Whoever does anything with the intention of causing wrongful gain to one
person or wrongful loss to another person is said to do that thing dishonestly".
7. The language is explicit and conveys that to constitute an act dishonestly, it is

important that something should be done with the intention of causing wrongful gain or
wrongful loss. This wrongful gain may not be attained by the wrong-doer for himself
only. The wrong doer may cause gain or loss to any other person also. "A person can be
said to have dishonest intention if in taking property it is his intention to cause gain, by
unlawful means of the property to which the person so gaining is not legally entitled or to
cause loss by wrongful means of property to which the person so losing is legally
entitled. It is further clear from the definition that the gain or loss contemplated need not
be a total acquisition or a total deprivation but is enough if it is temporary retention of
property by the person wrongfully gaining or temporary `keeping out' of the property
from the person legally entitled". (PLD 1957 SC (India) 317 at 324).
In another case "dishonestly" was defined as below:--
"Word "dishonestly" as defined in section 24, P.P.C. means to do an act with intention of
causing wrongful gain to one and wrongful losses to the other." (K. Raza v. State, 1986
MLD 2624)."
8. In The Law Laxicon edited by Justice Y.B. Chandrachud, at page 567 "dishonesty"
defined as "giving the ordinary meaning the word "dishonestly" means "dishonesty". It
further elaborates dishonesty as disposition to lie, cheat, deceive, or defraud;
untrustworthiness, lack of integrity. Lack of honesty, probity or integrity in principle; lack
of fairness and straightforwardness, disposition, to defraud, deceive or astray. Like
Pakistan Penal Code, in section 24 of Indian Penal Code "dishonestly" is defined in the
similar words:--
"Whoever does anything with the intention of causing wrongful gain to one person or
wrongful loss to another person is said to do that thing dishonestly."
Section 24 is further elaborated on the same page as below:--
"The word dishonestly in section 24 India Penal Code has a technical meaning which is at
variance with its popular sense as employing deviation from probity. It is used in
connection with property and has nothing to do with probity. If a person causes wrongful
gain or wrongful loss by unlawful means in respect of property to which he is not legally
entitled, "he acts dishonestly within the meaning of section 24, though he may act from
laudable motives. The word dishonestly does not necessarily imply wrongful gain to
accused himself."
9. From the definition narrated above, from both Pakistan and Indian Penal Codes, it is
clear that issuance of cheque has to be clothed with dishonesty and as stated above
dishonestly means intention to cause wrongful gain or wrongful loss.
10. In my opinion, this can only be inferred from the actual act/acts of the
drawer/accused. In India to ascertain the intention or mala fide of the drawer, the payee in
event of dishonourment is required to give notice to the drawer that the cheque has been
dishonoured. Reply in response to the notice or no reply at all, helps to determine the
presence or absence of element of dishonestly. To further elaborate this point, it is
important to refer to the Indian law on the same subject. However, before considering law
on the subject from Indian jurisdiction, more discussion will be relevant from our own
jurisdiction.
11. My learned brother Ali Nawaz Chohan, J. (in Criminal Miscellaneous No.1632-
CB/2006, Rana Muhammad Ayub v. Rana Abdul Rehman and another) rightly held that
provisions of section 489-F, P.P.C. have been lifted. From the Financial Institutions
(Recovery and Finances) Ordinance, 2001.The relevant section is 20(4). For further
elaboration subsection (4) of section 20 of the Financial Institutions (Recovery and
Finances) Ordinance, 2001 and provisions of section 489-F of PPC are placed side by
side.
Section 489-F, P.P.C. Section 20(4) of FI(R&F) Ord.

Whoever dishonestly issued a cheque Whoever dishonestly issues a cheque towards
towards repayment of a loan or fulfilment repayment of a finance or fulfilment of an
of an obligation which is dishonoured on obligation which is dishonoured on
presentation shall be punishable with presentation shall be punishable with
imprisonment which may extend to three imprisonment which may extend to one year
years or with fine or with both unless he or with fine or with both unless he can
can establish for which the burden of proof establish for which the burden of proof shall
shall rest on him that he had made rest on him that he had made arrangements
arrangements with his bank to ensure that with his bank to ensure that the cheque would
the cheque would be honoured and that the be honoured and that the bank was at fault in
bank was at fault in not honouring the not honouring the cheque.
cheque.
12. The reading of above two provisions of the above mentioned enactments shows that
only two words have been changed in section 489-F. The word "loan" is substituted in the
P.P.C. with word "finance"; similarly, punishment of one year is substituted with three
years in P.P.C.
13. The rest of the language in both the enactments is verbatim. I have no doubt in my
mind that objective to legislate section 20(4) of the Financial Institutions (Recovery and
Finances) Ordinance, 2001 was different than objective to legislate section 489-F, P.P.C.,
but section 489-F, P.P.C. has not been legislated/drafted differently.
14. The Financial Institutions (Recovery of Finances) Ordinance, 2001 came into
existence in 2001 (XLVI of 2001). The said Ordinance was enacted to repeal, and, with
certain modifications, re-enact, the Banking Companies (Recovery of Loans, Advances,
Credits and Finances) Act 1997.
15. From the above, it is evident that the object and reason for enacting the above laws
was to provide the single forum to the Banks for the recovery of their loans from their
customers and likewise to the customers to approach the same Court if they have any
grievance against the banks. It also appears that the purpose of enacting the above
mentioned laws was to provide speedy measures for the recovery of' outstanding loans
and finances. Under section 7 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, a Banking Court is conferred criminal jurisdiction to try offences
punishable under the said Ordinance, and for the purpose the same powers are vested as
are vested in the Court of Session in the Code of Criminal Procedure, 1898. The Banking
Court can take cognizance of any offence under the Ordinance upon a complaint in
writing made by a person authorized in this behalf by the concerned Financial Institutions
in respect of which the offence was committed. Therefore, whenever an offence is
committed under section 20(4) of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, Banking Court shall take cognizance on a complaint filed by the
authorized person and the complaint shall be tried by the concerned Banking Court
Appeal is provided before two Judges of the High Court under section 22 of the same
Ordinance, 2001.
16. On the other hand, under section 489-F, an F.I.R. is lodged with a concerned Police
Station and after submission of final report, the jurisdiction of trial is conferred upon
Magistrate of the First Class and appeal can be filed before the concerned Sessions Judge.
Section 489-F, P.P.C. is attracted where an individual issues a cheque dishonestly in
favour of another individual and the same is dishonoured on presentation. Therefore, the
purpose of both enactments is different and the procedure for the prosecution is also
different. Banking laws relating to recovery, expressly or impliedly, envisage effect of
issuance of cheque "dishonestly" or "inadvertently". For example in M.Z. Corporation v.
M.S. Sky Lines Printing Press, 1993 MLD 1764, the appellant had purchased some items
of computer stationery from the respondent and issued a post-dated Cheque bearing
164673, dated 14-8-1998 drawn on Bank of Credit and Commerce International, for
Rs.14940, in favour' of the respondent, thereafter, the date of the post-dated cheque was
further extended but when the cheque was presented by the respondent to the Bank, the
same was dishonoured with the remarks, "the payment stopped by drawer". The
respondent intimated the same to the appellant but the latter failed to make the payment
and under such circumstances, the suit was filed by the respondent against the appellants
before the learned trial Court. The trial Court as well as the Appellate Court refused to
accept the defence of the appellant as dishonesty on his part was established in the above
stated facts. (1993 MLD 1766). It may be pointed out that the above case/appeal was
filed under Banking Companies (Recovery of Loans) Ordinance, 1979 which was
substituted by the Banking Companies (Recovery of Loans, Advances, Credits and
Finances) Act 1997 which was further substituted by existing enactment i.e. Financial
Institutions (Recovery of Finances) Ordinance, 2001. Therefore, the above mentioned
finding of his Lordship Mamoon Qazi, J. of Karachi High Court (as he then was) is
relevant ad applicable to the interpretation of section 20(4) of the Financial Institution
(Recovery of Finances) Ordinance, 2001.
17. His lordship Abdul Majid Tiwana, J. in a case relating to recovery of Agricultural
Development Bank under the Agricultural Development Bank Ordinance, 1961 observed
as under:--
"No doubt, subsection (2) of section 25 supra, empowers the bank to recover all sums
due, which include the principal amount of loan and interest accruing thereon, as arrears
of land revenue but it cannot straightway resort to the coercive measures of arrest and
detention. (1995 MLD 12)."
18. The above mentioned two cases indicate that, "the drawer should be given an
opportunity to clear his liability or to ensure that the dishonoured cheque was issued
dishonestly. Other means should be resorted to, before application of coercive measures
including registration of an F.I.R. etc. Since the language of 489-F has been lifted from
the Banking Laws mentioned above, precautions, interpretations and considerations
provided and applied in the above laws should also be followed while dealing with cases
registered under section 489-F, P.P.C. Thus, the Court must apply its judicial mind to
consider whether the cheque was issued dishonestly, indeed, or whether the drawer was
provided opportunity to discharge his liability towards the payee or not?
19. In this regard as hinted at in para. 10, the prevalent law from the Indian jurisdiction
may also be considered.
20. It may be pointed out at the outset that Indian Legislature made dishonour of cheque
an offence under the Negotiable Instruments Act, 1981 instead of Indian Penal Code. In
this connection they added a new Chapter XVII in Negotiable Instruments Act 1981. For
the purpose of benefit of all concerned, I hereby reproduce the statement of Objects and
Reasons of the Act which is as under:--
"Statement of Objects and Reasons.---The Negotiable Instruments Act, 1881 was

amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws
(Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in
case of dishonour of cheques due to insufficiency of funds in the account of the drawer of
the cheque. These provisions were incorporated with a view to encourage the culture of
use of cheques and enhancing the credibility of the instrument. The existing provisions in
the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have
been found deficient in dealing with dishonour of cheques. Not only the punishment
provided in the Act has proved to be inadequate, the procedure prescribed for the Courts
to deal with such matters has been found to be cumbersome. The Courts are unable to
dispose of such cases expeditiously in a time bound manner in view of the procedure
contained in the Act.
2. A large number of cases are reported to be pending under sections 138 to 142 of the
Negotiable Instruments Act in various Courts in the country. Keeping in view the large
number of complaints under the said Act pending in various Courts, a Working Group
was constituted to review section 138 to the Negotiable Instruments Act, 1881 and make
recommendations as to what changes were needed to effectively achieve the purpose of
that section.
3. The recommendations of the Working Group along with other representations from
various institutions and organizations were examined by the Government in consultation
with the Reserve Bank of India and other legal experts, and a Bill, namely, the Negotiable
Instruments (Amendment) Bill, 2001 was introduced in the Lok Sabha on 24th July,
2001. The Bill was referred to Standing Committee on Finance which made certain
recommendations in its report submitted to Lok Sabha in November, 2001.
4. Keeping in view the recommendations of the Standing Committee on Finance and

other representations, it has been decided to bring out, inter alia, the following
amendments in the Negotiable Instruments Act, 1881, namely:
(i) to increase the punishment as prescribed under the Act from one year to two years;
(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to
30 days;
(iii) to provide discretion to the Court to waive the period of one month, which has been
prescribed for taking cognizance of the case under the Act;
(iv) to prescribe procedure for dispensing with preliminary evidence of the complainant;
(v) to prescribe procedure for servicing of summons to the accused or witness by the
Court through speed post or empanelled private couriers;
(vi) to provide for summary trial of the cases under the Act with a view to speeding up
disposal of cases;
(vii) to make the offences under the Act compoundable;

(viii) to exempt those directors from prosecution under section 141 of the Act who are
nominated as directors of a company by virtue of their holding any office or employment
in the Central Government or State Government or a financial corporation owned or
controlled by the Central Government, or the State Government, as the case may be;
(ix) to provide that the Magistrate trying an offence shall have power to pass sentence of
imprisonment for a harm exceeding one year and amount of fine exceeding five thousand
rupees;
(x) to make the Information Technology Act, 2000 applicable to the Negotiable
Instruments, Act, 1881 in relation to electronic cheques and truncated cheques subject to
such modifications and amendments as the Central Government, in consultation with the
Reserve Bank of India, considers necessary for carrying out the purpose of the Act, by
notification in the Official Gazette; and
(xi) to amend definitions of "bankers' books" and "certified copy" given in the Bankers'
Books Evidence Act, 1891.
5. The proposed amendments in the Act are aimed at early disposal of cases relating to
dishonour of cheques, enhancing punishment for offenders, introducing electronic image
of a truncated cheque and a cheque in the electronic form as well exempting an official
nominee director from prosecution under the Negotiable Instruments Act, 1881.
6. The Bill seeks to achieve the above objects."
21. Through the above amendment sections 138 to 147 were added in the Negotiable
Instrument Act 1881 which are also reproduced herein for benefit and convenience:-
"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 persons 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 provision of this Act, be punished with
imprisonment for a term which may be extended to two years, Substituted by the
Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 (55 of
2002), S. 7, for "a term which may extend to one year" (w.e.f. 6-2-2003) 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) (Substituted by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), S.7, for "within
fifteen days" (with effect from 6-2-2003), of the receipt of information by him 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 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.
139. Presumption in favour of holder.--It shall be presumed, unless the contrary is

proved, 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.
140. Defence which may not be allowed in any prosecution under section 138.-It shall not
be a defence in a prosecution for an. offence under section 138 that the drawer had no
reason to believe when he issued the cheque that the cheque may be dishonoured on
presentment for the reason stated in that section.
141. Offences by companies.-(1) If the person committing an offence under section 138 is
a company, every person who, at the time the offence was committed, was in charge of,
and was responsible to the company for the conduct of the business of the company, as
well as the company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly:
Provided that nothing contained in this subsection shall render any person liable to
punishment if her proves that the offence was committed without his knowledge, or that
he had exercised all due diligence to prevent the commission of such offence.
[Provided further that where a person is nominated as a Director of a company by virtue

of his holding any office or employment in the Central Government or State Government
or a financial corporation owned or controlled by the Central Government of the State
Government, as the case may be, he shall hot be liable for prosecution under this
Chapter.]
(Inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act,

2002 (55 of 2002), S.8 (with effect from 6-2-2003).
(2) Notwithstanding anything contained in subsection (1), where any offence under this
Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to, any neglect on the part
of any director, manager, secretary or other officer of the company, such director,
manager, secretary or other office shall also be deemed to be guilty of that offence and
shall be liable to be proceeded against and punished accordingly.
Explanation.---For the purposes of this section.---
(a) "Company" means anybody corporate and includes a firm or other, association of
individuals; and
(b) "director", in relations to a firm, means a partner in the firm.
142. Cognizance of offences.-Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974),--
(a) no Court shall take cognizance of any offence punishable under section 138 except
upon a complaint, in writing, made by the payee or, as the case may be, the holder in due
course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action
arises under clause (c) of the proviso to section 138:
(Provided that the cognizance of a complaint may be taken by the Court after the
prescribed period, if the complainant satisfies the Court that he had sufficient cause for
not making a complaint within such period;) [Inserted by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 (55 of 2002), S.9 (with effect
from 6-2-2003).
(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the

first class shall try any offence punishable under section 138.
143. Power of Court to try cases summarily.---(1) Notwithstanding anything contained in

the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Chapter shall
be tried by a Judicial Magistrate of the First Class or by a Metropolitan Magistrate and
the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may
be, apply to such trials:
Provided that in the case of any conviction in a summary trial under this section, it shall
be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding
one year and an amount of fine exceeding five thousand rupees:
Provided further that when at the commencement of, or in the course of, a summary trial
under this section, it appears to the Magistrate that the nature of' the case is such that a
sentence of imprisonment for a term exceeding one year may have to be passed or that it
is, for any other reasons, undesirable to try the case summarily, the Magistrate shall after
hearing the parties, record an order to that effect and thereafter recall any witness who
may have been examined and proceed to hear or rehear the case in the manner provided
by the said Code.
(2) The trial of a case under this section shall, so far as practicable consistently with the
interests of justice, be continued from day to day until its conclusion, unless the Court
finds the adjournment of the trial beyond the following day to be necessary for reasons to
be recorded in writing.
(3) Every trial under this section shall be conducted as expeditiously as possible and an
endeavour shall be made to conclude the trial within six months from the date of filing of
the complaint.
144. Mode of service of summons.-(1) Notwithstanding anything contained in the Code

of Criminal Procedure, 1973 (2 to 1974), and for the purposes of this Chapter, a
Magistrate issuing a summon to an accused or a witness may direct a copy of summons to
be served at the place where such accused or witness ordinarily resides or carries on
business or personally works for gain, by speed post or by such courier services as are
approved by a Court of Session.
(2) Where an acknowledgement purporting to be signed by the accused or the witness or

an endorsement purported to be made by any person authorized by the postal department
or the courier services that the accused or the witness refused to take delivery of
summons has been received, the Court issuing the summons may declare that the
summons has been duly served.
145. Evidence, on affidavit.-(1) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant any be given by
him on affidavit and may, subject to all just exceptions be read in evidence in any
enquiry, trial or other proceeding under the said Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the
accused, summon and examine any person giving evidence on affidavit as to the facts
contained therein.
146. Bank's slip prima facie evidence of certain facts.---The Court shall, in respect of
every proceeding under this Chapter, on production of bank's slip or memo having
thereon the official mark denoting that the cheque has been dishonoured, presume the fact
of dishonour of' such cheque, unless and until such fact is disproved.
147. Offences to be compoundable.---Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be
compoundable.
22. As compared to above, we do not find any deliberations, discussions of any

Committee, etc. when Criminal Law (Amendment) Ordinance, 2002, was enacted to
amend the Pakistan Penal Code and the Code of Criminal Procedure through the above
Ordinance. In the said Ordinance, not only 489-F was inserted in the Pakistan Penal
Code, sections 32, 260, 261 and 345 along with Schedule 2 were also amended. As a
matter of fact, it appears as elaborated above language of' section 489-F was lifted from
subsection (4) of section 20 of Financial Institution (Recovery of Finances), Ordinance,
2001 without any serious thought or discussion. Thus, it is suggested to the concerned
Government that section 489-F, P.P.C. may be suitably amended; to ascertain whether the
cheque was dishonestly issued by the drawer; This Court cannot make such
recommendation to the Legislature, however, it is permissible under the Constitution and
it is also in the interest of people to make such suggestion to the Government to consider
and initiate amendment in section 489-F, P.P.C. Some earlier decision may be referred to
in this regard i.e. PLD 1993 SC 341, PLD 1986 SC 240 and PLD 2002 SC 460. In the
said judgments suggestions for enactment/amendment were made to the Government.
23. The word `Loan' employed in section 489-F, P.P.C. is also very significant. This word
is not defined in the Pakistan Penal Code. However, it is defined in section 2(d)(iv) of the
Financial Institutions (Recovery of Finances) Ordinance, 2001 and in view of the
background of enactment of section 489-F, P.P.C., as elaborated above, the definition in
the Financial Institutions (Recovery of Finances) Ordinance, 2001 would be relevant for
the present purpose. In the said Ordinance `Loan' is not independently defined. As a
matter of fact, the word `Finance' is defined in the above mentioned section which also
include `Loan' and it means, Advance, Cash Credit, Over Draft, Packing Credit, a bill
discounted and purchased or any other financial accommodation provided by a financial
institution to a customer. Loan, according to Wharton's Law Lexicon is anything lent or
given to another on condition of return or payment. This lending or giving on condition
of return or payment could be by operation of law. Similar definition was approved by
their Lordships of the Supreme Court in Ocean Industries Limited and another v.
Industrial Development Bank PLD 1966 SC 738 + M.A. Hameed Puri v. Federation of
Pakistan PLD 1979 Lah. 252. In another interpretation, the essentials of a `loan'
according to section 2(12) are, (1) an advance which may be in money or in kind (2) the
advance must carry the interest and (3) there must be condition of repayment. One of the
essential condition in the definition of `loan' in the Bengal Money Lender Act is
repayment with interest. (The Law Lexicon edited by Justice Y. V. Chandrachud, page
1140). Another phrase used in section 489-F is also worth-consideration "or fulfilment of
obligation". The word òbligation' is defined in Oxford Dictionary as "the state of being
forced to do something because it is your duty, or because of law'. (Oxford Advance
Learner's Dictionary 7th Edition, page 1045). In accordance with Law Lexicon
òbligation' means a duty, the bond of legal necessity which binds together two or more
determinate individuals, an act which binds a person to some performance, a binding or
state of being bound in law; an act by which a person becomes bound to another or for
another, or to forbear something etc. (The Law Lexicon edited by Y.V. Chandrachud,
page 1335). According to Black's Law Dictionary, òbligation' means a legal or moral
duty to do or not do something. The word has many wide and varied meanings. It may
refer to anything that a person is bound to do or forbear from doing, whether the duty is
imposed by a law, contract, promise, social relations, courtesy, kindness, or morality. A
formal binding agreement or acknowledgment of a liability to pay a certain amount or to
do certain thing for a particular person or set of persons, especially a duty arising by
contract.
24. After having discussed above the law on the subject, I revert to the arguments of the
learned counsel in the present case. The learned counsel for the petitioner contended that
there was no agreement or deal between the petitioner and complainant to purchase any
machinery, etc. The learned counsel further contended that there might be some
agreement between one Syed Zafar Ali Shah and complainant. In this regard, he
submitted a writing between Rana Tauqeer Khan (complainant) and Syed Zafar Ali Shah
dated 19-6-2005. The learned counsel for the petitioner further submitted that there, was a
partnership between petitioner and said Syed Zafar Ali Shah which dissolved after some
time as serious disputes developed between both of them. In this regard, he referred to a
suit for dissolution of partnership filed on 20-8-2005. He further submitted that both
criminal and civil litigation is pending between the petitioner and said Syed Zafar Ali
Shah, the instant F.I.R. has been maneuvered by said Zafar Ali Shah as a counterblast of
F.I.Rs registered against him on applications of the petitioner. In this regard, he refers to
F.I.R. No.599 of 2005 and F.I.R.No.656 of 2005.
He also submitted that Cheque No.CD-4808906 shows that it was not issued by the
petitioner, it was jointly signed by petitioner and Zafar Ali Shah, that also proves that
they were partners at one time. He further submitted that Investigating Officer as well as
D.S.P. Legal in his opinion declared petitioner innocent and it was also observed by the
Investigating Officer that the complainant had received the actual amount, therefore, no
wrongful loss was caused to him.
25. The learned counsel for the complainant submitted that the petitioner and Zafar Ali
Shah had become partners on 25-6-2005 in Basil Paper Mills, Ferozepur Road, Lahore.
He further submitted that Cheque No.CD-4808906 was dishonestly issued by the
petitioner which was dishonoured. Said Zafar Ali Shah paid half of the amount but the
petitioner refused to make payment therefore, the complainant was caused wrongful loss
by the petitioner. He further submitted that though the petitioner was declared innocent
by the police but opinion of the police is not binding on the Court.
26. The learned counsel for the State and Investigating Officer present in the Court
endorsed submission of the learned counsel for the petitioner that after a thorough
investigation, the petitioner has been found innocent. The report of the Investigating
Officer was also verified by D.S.P. Legal. The learned counsel for the State further
submitted that no wrongful loss was caused to the complainant.
27. I have heard all the three learned counsel. I have also examined the .record of this
case myself. The F.I.R. shows that Cheque No.CD-4808906 was issued from joint
account of the petitioner and Zafar Ali Shah to be encashed on 20-9-2005. The cheque
was signed by both of them, therefore, it prima facie, indicates that they were partners
and possibility of possession, of cheques jointly signed by them, with Zafar Ali Shah
cannot be ruled out. Another point to note is a letter from the Operations Manager, Union
Bank Limited. A.I.T. Branch, Lahore which informed petitioner: "as per your request
dated 5-5-2006, it is hereby confirmed that an amount of Rs.4,44,500 vide Cheque
No.CD-4808905 has been debited on the same date from your joint account with Zafar
Ali Shah Account No.7409-187749-001. It may be pointed out that it is the same joint
account number which is mentioned above. The payment was made to the complainant
despite letter of the petitioner to the bank that joint account be closed. Zafar Ali Shah
gave Cheque No.CD-4808905 to the complainant who got it encashed before petitioner
could inform bank not to encash any cheque from the joint account. On the basis of this
payment in favour of the complainant, the Investigating Officer held that actual payment
was made to the complainant from the joint account and no wrongful loss was caused to
him. The mention of these two cheques i.e. CD-4808905 and CD-4808906 clearly
strengthen the contention of the learned counsel for the petitioner that said Zafar Ali Shah
was in possession of jointly signed cheques, he used one for payment to the complainant
and one to cause registration of the present F.I.R. The police record also indicates that the
petitioner had informed the bank that partnership between petitioner and said Zafar Ali
Shah ended and jointly signed cheques be not honoured. The complainant helped Zafar
Ali Shah by getting registered the present F.I.R. against petitioner as two F.I.Rs already
stand registered against Zafar Ali Shah at instance of the petitioner. Copies of F.I.Rs. and
suits are also available on the record which is sufficient proof to indicate possibility of
mala fide on part of the complainant and said Zafar Ali Shah. The opinion of the police is
not binding however, it has a persuasive value in all criminal matters including bail
before arrest.
28. The above facts lead to the inference that Cheque No.CD-4808906 was either not
issued by the petitioner at all or it was issued jointly by Zafar Ali Shah and petitioner. No
harm came to said Zafar Ali Shah from the complainant side. If the said cheque was
issued dishonestly, then it was issued by both of them. The record as well as opinion of
Investigating Officer shows that amount of Rs.4,44,500 was actually debited from the
joint Account No.7409-187749-001 vide Cheuqe No.CD-4808905 in favour of the
complainant, thus, no wrongful loss has been caused to the complainant by dishonour of
Cheque No. CD-4808906.
29. The above discussion and police record also shows that agreement to buy the
machinery mentioned in the F.I.R. might have existed between Zafar Ali Shah and the
complainant nevertheless, the petitioner had no obligation or liability towards the
complainant which he failed to fulfill. Similarly, petitioner did not owe any loan to the
complainant. The foregoing discussion also leads to the belief that element of mala fide
on part of the complainant, in the above circumstances, cannot be ruled out. The
petitioner is a retired army officer and a businessman. The Investigating Officer has also
declared him innocent. Therefore, in view of the reasons enumerated in the preceding
paragraphs, this bail application for pre-arrest bail is allowed subject to petitioner's
furnishing fresh surety bonds in the sum of Rs.100,000 with one surety in the like amount
.to the satisfaction of the Deputy Registrar (J) of this Court. The interim bail granted to
the petitioner vide order of his Court dated 4-5-2006 is confirmed.
H.B.T./J-22/L Bail confirmed.

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