CIRCUMTANCES OF DISHONOR OR BOGUS CHEQUES

PROSECUTIONS:
Frequently Asked Questions (FAQs) on Dishonour of Cheque in Pakistan:
Q. What are the conditions that make dishonouring of a cheque an offence in Pakistan?
A. When cheque is issued dishonestly by one person to the other.
Q. In what circumstances dishonouring of cheque is not an offence in Pakistan?
A. Each case has its own facts; however, dishonouring of a cheque is not an offence when signatory has
made arrangements with his bank to ensure that the cheque will be honoured and that the bank was at
fault in not honouring the cheque.
Q. What is the penalty for dishonouring of a cheque in Pakistan?
A. Issuance of cheque dishonestly is an offence under the statute both civil and criminal remedies could
be availed simultaneously in such matters. Punishment on bouncing of cheque is imprisonment which
may extend to three years and with fine.
Q. What can I do when a cheque is dishonoured for the reason of insufficient funds? What legal
action I can take to get the amount cleared?
A. You can lodge First Information Report against the signatory and at the same time can also file a civil
suit, there is no legal bar if criminal and civil proceedings continue simultaneously. Our advice is before
lodging F.I.R. notice of dishonour of cheque should also be given.
Q. I have got my cheque dishonoured which was issued by a company, is there any remedy to
recover my amount? Presumption is we cannot lodge F.I.R. against a company.
A. Each case has its own facts, you can lodge First Information Report against the signatory who issued
the cheque and at the same time can also file a civil suit, there is no legal bar if criminal and civil
proceedings continue simultaneously.
Q. We are in the business of manufacturing wooden furniture. During course of our business we
supplied furniture of Rs 1 million, but our client dishonoured the cheque. We lodged First
Information Report (FIR) under section 489-F Pakistan Penal Code after that he paid us half the
amount and then he ran away. We do not have any idea about his whereabouts. Court has issued
proclaimed offender notice, he is untraceable. Now as he is untraceable and vanished still what
can we do?
A. After getting him declared as proclaimed offender you should ask the court to proceed in the matter
and get all your evidence recorded, this will help you when he will be arrested and if at that time for some
reason or the other witnesses are not available court can proceed with the matter on the basis of the
evidence earlier recorded in his absence. Simultaneously, on his last known address you can also file suit
for recovery in the civil court.
Q. I have a cheque dishonoured, now where to lodge an F.I.R.? The place of the bank where the
cheque was dishonoured or the place where the cheque was handed?
A. Each case had to be seen on its own facts and circumstances you can lodge FIR where the cheque
was dishonoured or the place where the accused carries out his business.
Q. A partnership firm gave a cheque to me, cheque was presented which was dishonoued. Now
they closed the partnership firm and dissolved it. My question is can still I have any remedy?
A. On civil side all the partners are jointly and severally liable to pay the amount but as far as criminal
proceedings are concerned a partner who issued/signed the cheque can only be prosecuted.
Q. We are three partners in a firm, two of partners are active and they are running the business
and taking care of day to day affairs of the firm. My position is only as a sleeping partner.
Cheques are signed and issued by the two working partners. In case a cheque bounces and legal
action takes place under section 489-F Pakistan Penal Code are all the partners are liable or only
those who have signed the cheque?
A. The person who issued the cheque will be prosecuted. And on civil side if the person committing an
offence is a partnership or a company every person who at the time of the offence was in charge of and
was responsible shall be deemed to be guilty and liable to be proceeded against and punished
accordingly.
Q. What about offence by companies in Pakistan?
A. If cheque is issued dishonestly, signatory of a cheque and CEO of the company will be prosecuted