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case laws
While Granting Pre-Arrest bail, the merits of the case can be touched.
Section 489-F PPC
In Pakistan, financial fraud involving cheques has become a significant concern. To address this, the legislature introduced Section 489-F in the Pakistan Penal Code (PPC) to criminalize the act of issuing dishonored cheques with fraudulent intent. This section provides legal protection to individuals and businesses dealing in negotiable instruments, ensuring greater trust in financial transactions.
Legal Text of Section 489-F PPC
“Whoever dishonestly issues a cheque towards repayment of a loan or fulfillment of an obligation which is dishonored on presentation, shall be punished with imprisonment which may extend to three years, or with fine, or with both.”
Nature of the Offense
Cognizable: Police can register FIR and arrest without court approval. Bailable: Accused has the right to seek bail. Compoundable: The parties can settle the matter out of court.
Key Elements of the Offense
To constitute an offense under this section, four critical components must be satisfied: Cheque must be issued to discharge a lawful obligation or repay a loan. The intent must be dishonest at the time of issuance. The cheque must be presented to the bank for encashment. The cheque must be dishonored by the bank due to insufficient funds or stop payment instructions.
Punishment
Imprisonment: Up to 3 years Fine: Amount is discretionary and based on the cheque value Or both: As decided by the court
Defenses Available to the Accused
An accused person may present the following defenses: The cheque was issued as security, not for payment. There was no legal obligation or outstanding debt. The dishonor was caused by bank error. The cheque was post-dated or issued conditionally.
Procedure to File a Case
Cheque is dishonored by the bank. A written memo or dishonor slip is issued by the bank. The payee issues a legal notice demanding payment. If no response is received, the payee can lodge an FIR under Section 489-F PPC. The case proceeds in criminal court, often with an option for settlement.
Misuse of Section 489-F
While it provides a quick remedy to victims, this section is sometimes misused for harassment or coercion in civil matters. Courts are increasingly vigilant in ensuring that dishonest intent is proven beyond doubt before convicting an individual.
What is the maximum punishment?
Up to three years of imprisonment or a fine or both.
Is Section 489-F PPC a bailable offense?
Yes, it is a bailable and compoundable offense.
Can a security cheque be prosecuted under 489-F?
Not unless it is linked to a legal obligation or debt.
