TASSADUQ HUSSAIN JILLANI, J. --- Petitioner seeks bail in the case registered vide F.I.R. No, 261 of 2012, dated 7.8.2012 under Section 489-F, PPC at P.S. Kotwali District Sialkot on the statement of Mian Muhammad Shoban with the allegation that he had some business transactions with the petitioner; that in that regard the petitioner owed him a sum of Rs, 2500,000/- for which he issued cheque bearing No, 41741493 amounting to Rs, 2500,000 which was dishonoured when presented before the Askari Bank.
2. Learned counsel for the petitioner seeks bail on the ground that the case is false; that the petitioner and complainant entered into an agreement for construction of complainant's house that a dispute arose with regard to the rendition of amounts for which one Arshad Mehmood Bagoo, Advocate was appointed as Arbitrator and it was agreed that whatever the said Arbitrator decided, both sides would abide 'by and comply with the said decision. The cheque in question, he further contended, was issued as security and this was not the-amount which was to be paid to the complainant nor he was ever held entitled to receive the said amount by the Arbitrator vide the Arbitration Award dated 24.11.2011).
3. Learned counsel for the complainant, on the other hand, opposes the petition and submits on instructions that the cheque in quest ion was issued on account of an agreement dated 17.8.2011 and that the arbitration award to which reference has been made by petitioner's learned counsel is not relevant; that petitioner owes the cheque amount mentioned in the cheque and that is why he issued the cheque which has been dishonoured and he is not entitled for the grant of bail.
4. The investigating officer present in Court, on Court query submits that during investigation, it has come to light that Mr. Arshad Mehmood Bagoo was appointed as Arbitrator and in terms of his award, petitioner owed the complainant Rs, 650,000/- and the cheque issued by the petitioner was by way of security when parties had decided to have the matter settled through arbitration and it was not the actual amount which petitioner was liable to pay to the, complainant.
5. Learned Additional Prosecutor General, opposes the petition by submitting that the very fact that petitioner issued a cheque which was dishonoured makes him criminally liable and he is not entitled to pre-arrest bail as there are no mala fides apparent on record.
6. Having heard learned counsel for the parties and learned Law Officer at some length and having gone through the record, we find that the agreement dated 17.8.201.1 to which reference has been made by complainant's learned counsel is of a prior date which was overtaken by a subsequent arbitration accord dated 24.11.2011 and the cheque dated 20.7.2012 ex facie appears to be connected with the said subsequent arbitration accord. This is also borne out from the finding in investigation carried out by the police. According to the investigating officer, the cheque issued amounting to Rs, 2500,000/- was by way of security rather than for the discharge of liability to the tuna of the amount mentioned in the said cheque. He further added that in term. of the award given by the Arbitrator. petitioner owes only Rs, 6,50,000/, Be that as it. may, we would not like to go into depth of the issue lest it may prejudice anyone during investigation or trial. But the case in hand begs a question as to what constitutes an offence under Section 489-F, PPC. Every transaction, where a cheque is dishonoured may not constitute an offence. The foundational elements to constitute an offence under this provision are issuance of a cheque with dishonest intent, the cheque should be towards repayment of a loan or fulfilment of an obligation and lastly that the cheque in question is dishonoured.
7. In the instant case, prima facie, the circumstances indicate that the cheque in question was tilt issued towards repayment of some outstanding loan or fulfilment of an existing obligation but instead it had been issued to meet a possible future obligation if determined as a result of some other exercise. That being so, one of the foundational elements of Section 489-F, PPC is prima facie missing. The invocation of penal provision would therefore remain a moot point The ground that prosecution is motivated by malice may not in these circumstances be ill-founded. Consequently, this petition is convened into appeal and allowed and subject to petitioner's furnishing bond in the sum of. Rs 50,000/- with two sureties each in the like amount to the satisfaction of the learned Trial Court, he shall remain on pre-arrest bail.