THE HIGH COURT OF SINDH, CIRCUIT COURT, LARKANA

Criminal Misc. Application No.S-109 of 2022

Applicant:                Col. (R) Mukarram Ali Shah, son of Ashraf Ali Shah through Mr. Abdul Wahab Baloch, Advocate.

Respondent No.1:   The State. Through Mr.Aitbar Ali Bullo, Deputy Prosecutor General, Sindh.

Respondent No.2:   Anwar-ul-Haque, son of Muhammad Akbar through Mr. Naushad Ali Tagar, Advocate      

Date of Hearing:      03.10.2024

Date of Order:         03.10.2024

O R D E R

KHADIM HUSSAIN SOOMRO, J.-Through thisCriminal Miscellaneous Application, applicant has impugned the order dated 12.04.2022, passed by learned IInd Civil Judge and Judicial Magistrate (MTMC), Larkanain Criminal Miscellaneous Application No.04/2022, Criminal Case No.167/2021 (Re-Syed Mukaram Ali Shah v/s. the State), wherein the application filed by the applicant under section 249-A Cr.P.C.was dismissed and being aggrieved and dissatisfied, the same has been impugned before this court.

2.       Briefly,the facts of the case are that F.I.R. bearing Crime No.74 of 2021 under section 489-F was lodged at Police Station Civil Lines, Larkana, by complainant Anwar-ul-Haq against the applicant, alleging therein that the accused was dealing with sale and purchase of plots at leaf provider D.H.A., Karachi and in the year2017 before his friend Nadeem Mughal he assured the applicant of giving ten plots measuring 500 sq. yards in D.H.A. City, Karachi for which he obtained total amount of 5,77,00,000/- at different times and in such regard he gave guarantee chequebearing No.27939441, dated 15.03.2018 to be drawn at J.S. Bank Mureedke Branch, Lahore to the complainantand told that do not encash the same as the plots will be given to him, but the plots were not given to the complainant, resultantly he moved cheque for encashment before the concerned bank, which was returned with memo. Hence, the F.I.R. was registered against the applicant.

3.       It is contended by the learned counsel that the applicant is innocent and has been falsely implicated in this case by the complainant in order to humiliate him; that the F.I.R. has been lodged malafidely as the applicant is residing in Lahore and F.I.R. has been lodged at Larkana; that the civil transaction is also pending between the parties; that no cheque has been bounced as appeared on the memo of the bank, but the cheque was outdated and expired, hence was not entertained; that infact the cheque is not dishonoured, that the cheque in question is a stale cheque, which was presented in the concerned bank after the lapse of three years; therefore, the impugned order may be set aside, and instant Criminal Miscellaneous Application may be allowed.

4.       Learned Deputy Prosecutor General has supported the impugned order and submits that instant Criminal Miscellaneous Application may be dismissed.

5.       Learned counsel for respondent No.2 submits that the cheque is a negotiable instrument and the applicant was under the obligation to encash the same; therefore, an instant Criminal Miscellaneous Application may be dismissed.

6.       I heard learned counsel for the applicant, learned counsel for respondent No.2, and learned Deputy Prosecutor General, and perused the material available on record with their assistance. 

7.       The charge has been framed against the applicant Section 489-F, P.P.C, for the purpose of brevity, the section is reproduced as under:-

489-F. Dishonestly issuing a cheque.---Whoever dishonestly issues a cheque towards repayment of a loan or fulfillment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to three years, or with fine, or with both, unless he can establish, for which the burden of proof shall rest on him, that he had made arrangements with his bank to ensure that the cheque would be honoured and that the bank was at fault in not honouring the cheque."[ underlaying for emphasis[

8.       The cheque is to be issued with some consideration. From its plain and simple meaning, the above underlining section reveals that it is to be issued for the repayment of a loan to the lender, typically as per the agreed-upon terms, which may include the repayment schedule and conditions outlined in the loan agreement, which may be an oral or in writing. The cheque must be issued in the discharge of a legally enforceable debt or liability. This establishes that a cheque is issued for consideration, which is a prerequisite for its validity. In legal terms, consideration refers to something of value that is exchanged between parties in a contract. It is a fundamental element that validates a contract, including the issuance of a cheque. A cheque must be issued in discharge of a legally enforceable debt or liabilityor promise to pay for a specific obligation. A cheque may be issued as payment for goods, services, or loans. A cheque is to be considered valid when issued against a genuine transaction with legal standing. If a cheque is issued without an underlying debt (e.g., as a gift or without any consideration), it may not hold legal validity. If a cheque is issued without consideration, the drawer may not be held liable for its payment.

9.       The contents of the First Information Report (F.I.R.) indicate that the cheque was issued as guarantee; however, the specific transaction for which it was issued is not explicitly identified within the F.I.R.A plain reading of the aforementioned section makes it abundantly clear that it does not apply to every instance of cheque dishonour. It is a matter of fact and the record that the cheque in question was issued on 15-03-2018, and the same was presented in the bank on 14-09-2021, after the lapse of three years. It is worth noting that the cheque in question was not dishonoured for insufficient funds or any other reason, but it was returned as a stale or outdated cheque. Under banking regulations, a bank is not obliged to honour a stale cheque, which means that when such a cheque is presented, it is likely to be returned unpaid. This can occur for various reasons, including the fact that the bank may refuse payment solely on the grounds that the cheque is stale.

10.   Admittedly, a cheque is a Negotiable Instrument as defined in Section 6 of the Negotiable Instruments Act 1881. According to Section 84(1) of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act"), it is stipulated that a cheque must be presented for encashment within a reasonable timeframe. Furthermore, Section 84(2) of the Act indicates that, in assessing what constitutes a reasonable time, consideration shall be given to the nature of the instrument, established trade practices, banking customs, and the specific circumstances surrounding the case at hand.

11.             In evaluating the "usage of trade and bankers" as specified in Section 84(2) of the Negotiable Instruments Act of 1881. The phrase "usage of trade and bankers" refers to the accepted norms and practices governing cheque processing. It includes the timeframe within which cheques are expected to be presented and honoured, influenced by common business practices and the operational standards of banks. The term "stale cheque" refers to a cheque not being presented for payment within a reasonable time frame, specifically six months from its due date. Banks may refuse to honour such cheques due to concerns about their validity and the potential for fraud. It underscores the importance of timely cheque presentations to ensure they remain valid and enforceable. Failure to adhere to these timelines could result in financial loss. 

12.   The 10th Edition of Sheldon's Practice and Law of Banking emphasizes that a distinction must be made between cheques classified as "out of date" in legal terms for negotiation purposes and those labelled "out of date" according to banking customs. It is noted that most banks return cheques presented six months or more after their date, marked as "out of date," and typically require a confirmation from the drawer before processing payment. Similarly, in the Fourteenth Edition of "Banking Laws and Practice in India" by M.L. Tannan, it is stated that a cheque should not be honoured unless it is presented within a reasonable time following its apparent date of issuance.

13.   In general terms, a cheque presented for payment beyond six months from its apparent date of issuance is classified as stale. In Griffiths v. Dalton (1940-2-KB 264), the facts establish that the cheque was issued to the plaintiff in August 1931, lacking a date. The plaintiff did not take any action regarding the cheque until February 20, 1933, when he filled in the date and subsequently presented it for payment at a Brighton branch of the Midland Bank. The cheque was honoured on the grounds of being stale, leading the plaintiff to file a suit. The relevant portion of the judgment is reproduced as follows:-      

"Although the cheque in the present case bore no date, the plaintiff, by S.20 of the Bill of Exchange Act, 1882, following what, I think, was the common law before the passing of that Act, had a prima facie authority to fill in the date, but by the common law he was bound to do so within a reasonable time. The question what is a reasonable time is a question of fact, and on the facts of this case I am satisfied that the reasonable time had long since elapsed. There was, therefore, no authority to fill in the date as it appeared on the cheque and no liability on the bank to meet it. The claim on the cheque fails."

14.             In the case of (Sajid Irtaza v/s. Additional Sessions Judge/Justice of Peace, Lahore), reported in  2021P.Cr.L.J 1071. The learned single judge High Court of Lahore has set aside the order passed by the learned justice of the peace for the registration of an F.I.R. on the ground that the cheque in question was a stale cheque having been presented after the expiration of six months.

15.     In the case of  Shafquat Hussain Hashmi V/S The State 2012 M L D 1551, [Sindh], it has been observed that in the matter concerning the presentation of a stale cheque, the charges against the applicant have been determined to be unfounded. Therefore, it is both appropriate and in the interest of justice to quash the proceedings at this early stage, thereby preventing any potential abuse of the legal process. The relevant part of the judgment is reproduced as under:-

"9.         However for what has been observed above regarding presentation of a stale cheque, the charges brought against the applicant are found groundless. Therefore it would be appropriate and in the interest of justice that the proceedings be nibbed in the bud and the process of law is prevented from being abused. This being the position, proceedings in Criminal case No.26 of 2010 arising from F.I.R. 238 of 2009 under sections 420, 489-F and 506, P.P.C. of Police Station Shah Faisal Colony pending before the J.M. are hereby quashed. Application disposed of accordingly."

16.    In the case of Habib Bank Ltd. v. Jamilur Rehman, reported at 1994 MLD 271, a learned Single Judge of this Court addressed a similar issue regarding the presentation of a cheque to the relevant Bank six months after its issuance date. It was observed that if a cheque or draft is not presented within six months of its issuance, it becomes classified as an out-of-date or stale cheque, and the bank is not under obligation to entertain such a cheque.

17.    In light of the above facts and circumstances of the case, the instant Criminal Miscellaneous Application is allowed as prayed, and these are the reasons for the order dated 03.10.2024.

                          J U D G E

Manzoor