Law relating to dishonour of Cheque

Defination of “dishonoured cheque”, which when presented in the Bank same is refused of payment by the bank because of insufficient funds or it is not in order, it is called dishonestly issuing a cheque is a criminal offence in Pakistan. Dishonestly issuing a cheque is governed by section 489-F of the Pakistan Penal Code, 1860. The said section reads as follows:

489-F Dishonestly issuing a cheque: Whoever dishonestly issues a cheque towards re-payment of a loan or fulfillment of an obligation which is dishonoured on presentation shall be punishable with imprisonment which may extend to three years and with fine 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.

The offence under this section is cognizable by police, non-bailable and compoundable.

Please note each case has to be seen on its own facts and circumstances.

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Irfan Mir Halepota, Advocate Supreme Court of Pakistan