Dishonoring of Cheque or Cheque Bounce : FAQs
- What are the conditions that make the dishonouring of a cheque an offence in Pakistan?
When cheque is issued dishonestly by one person to the other.
- In what circumstances is the dishonouring of a cheque not an offence in Pakistan?
Each case has its own facts and the dishonouring of a cheque is not an offence when the signatory has made arrangements with his bank to ensure that the cheque will be honoured and it was the bank at fault in not honouring the cheque.
- What is the penalty for dishonouring a cheque in Pakistan?
The issuance of any cheque dishonestly is an offence under the statute and both civil and criminal remedies could be availed simultaneously in such matters. The punishment on the bouncing of cheque is imprisonment which may extend to three years and also a fine.
- What can I do when a cheque is dishonoured for the reason of insufficient funds? What legal action can I take to get the amount cleared?
You can lodge a First Information Report against the signatory and at the same time also file a civil suit. There is no legal bar if criminal and civil proceedings continue simultaneously. It is advisable that before lodging F.I.R. notice of the dishonouring of the cheque should also be given.
- Where can a F.I.R. be lodged for dishonored cheque? The bank where the cheque was dishonoured or the place where the cheque was issued?
Each case had to be viewed on its own facts and you can lodge FIR either where the cheque was dishonoured or the place where the accused carries out his business.
- If a firm issues a cheque that bounces and legal action takes place under section 489-F of the Pakistan Penal Code are all the partners of the firm liable or only those who have actually signed the cheque?
The person who issued the cheque will be prosecuted. On the civil side, if the person committing an offence is in 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.
- What about offences by companies in Pakistan?
If any cheque is issued dishonestly the signatory of that cheque and the CEO of the company or signatories will be prosecuted.