Dishonored cheque

2026 CLC 252 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 126Negotiable Instruments Act (XXVI of 1881), Ss. 6 & 118Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2Suit for recovery of amountDishonored chequeTerms contract of "guarantee", "surety", "principal debtor" and "creditor"Guarantee chequeProof

Suit filed by respondent / plaintiff was decreed against appellant / defendant as the cheque given by him was dishonored on presentation

Contention of appellant / defendant was that the cheque issued by him was of guarantee

Validity

There are three distinct parties in a contract of guarantee: the "surety," the "principal debtor," and the "creditor"

Appellant/defendant did not qualify either as a surety or a third-party guarantor but he squarely fell within the definition of the "principal debtor"

Subject cheque, was a negotiable instrument under S. 6 of Negotiable Instruments Act, 1881 and was governed by the statutory presumptions enshrined in S. 118 of Negotiable Instruments Act, 1881

No material illegality, irregularity, misreading, or non-reading of evidence was pointed out by appellant/defendant

Trial Court rightly appreciated the evidence and correctly applied settled legal principles in decreeing the suit under O.XXXVII, C.P.C.

High Court declined to interfere in judgment and decreed passed against appellant / defendant

Appeal was dismissed, in circumstances.

2024 CLD 1247 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.118Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2Contract Act (IX of 1872), S. 128Suit for recovery of moneyLiability of suretyDishonored chequePresumption

Appellant / defendant was aggrieved of judgment and decree passed by Trial Court for recovery of amount mentioned in cheque which was dishonored on presentation

Plea raised by appellant / defendant was that he issued the cheque merely as surety

Validity

Appellant / defendant undertook to pay Rs.1,500,000/- without requirement of any reference to principal debtor

There was nothing on record suggesting that anything contrary had been settled between the parties

Witnesses were cross-examined in length but nothing adverse or sufficient to rebut the presumption arising under S. 118 of Negotiable Instruments Act, 1881, was noticed

Appellant / defendant admitted signing second agreement and did not deny issuance, presentation and dishonoring of the cheque

High Court declined to interfere in the judgment and decree and imposed cost upon appellant / defendant as Trial Court had reached the correct conclusion

Appeal was dismissed in circumstances.

2024 MLD 1761 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

O.XXXVII, Rr. 1 & 2Contract Act (IX of 1872), S. 128Negotiable Instruments Act (XXVI of 1881), S. 118Suit for recovery of moneyLiability of suretyDishonored chequePresumption

Appellant / defendant was aggrieved of judgment and decree passed by Trial Court for recovery of amount mentioned in cheque which was dishonored on presentation

Plea raised by appellant / defendant was that he issued the cheque merely as surety

Validity

Appellant / defendant undertook to pay Rs.1,500,000/- without requirement of any reference to principal debtor

There was nothing on record suggesting that anything contrary had been settled between the parties

Witnesses were cross-examined in length but nothing adverse or sufficient to rebut the presumption arising under S.118 of Negotiable Instruments Act, 1881, was noticed

Appellant / defendant admitted signing second agreement and did not deny issuance, presentation and dishonoring of the cheque

High Court declined to interfere in the judgment and decree and imposed cost upon appellant / defendant as Trial Court had reached the correct conclusion

Appeal was dismissed, in circumstances.

2024 CLC 1112 KARACHI-HIGH-COURT-SINDH Judicial Precedent

O.XXXVII, Rr. 1, 2 & 3Limitation Act (IX of 1908), First Sched., Art. 159Suit for recovery of moneyDishonored chequeEx-parte proceedingsApplication of defend the suitLimitation not extended

Applicant / defendant was declared ex-parte by Trial Court who was barred from filing application for leave to appear and defend the suit

Validity

First time copies of the plaint of summary suit were handed over to applicant / defendant and time was given to him to file application under O. XXXVII, R. 3, C.P.C. for leave to appear and defend summary suit

In absence of any proof of summons having been served before that date, the summons was deemed to have been served on the applicant / defendant on the date when copy of plaint of summary suit was provided to him giving him 10 days from that date to file his application for Leave to Appear and Defend summary suit

Trial Court rightly held that it did not have jurisdiction to enhance time prescribed in Art. 159 of First Sched. to Limitation Act, 1908

High Court declined to interfere in order passed by Trial Court although there were some irregularities which were not material in nature

Revision dismissed was, in circumstances.

2023 CLD 1536 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 3(2)Penal Code (XLV of 1860), S. 489-FDishonored cheque

Dominant object of S. 489-F, P.P.C. is not focused on repayment of finances or loans to a banking company or a financial institution

Thrust of S. 489-F, P.P.C. is aimed at securing interests of private party including even bank to whom cheques were issued dishonestly

Provision of S. 489-F, P.P.C. does not exclusively relate to financial institutions or banking companies so as to attract ouster contemplated by S. 3(2) of Microfinance Institutions Ordinance, 2001.

2023 CLD 1536 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 20Penal Code (XLV of 1860), S. 489-FDishonored chequeDistinction

Provision of S. 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001 deals with a cheque issued for securing repayment of finance to a Bank while S. 489-F, P.P.C. relates to a cheque albeit of a bank but issued between private parties.

2017 YLR 1443 KARACHI-HIGH-COURT-SINDH Judicial Precedent

O. XXXVII, R. 2Suit for recovery of moneyDishonored chequePresumptionEx parte evidenceDefendants did not join proceedings and evidence of plaintiff was recorded ex parteEffect

Affidavit in ex-parte proof and examination-in-chief of plaintiff and other witnesses were on oath and remained un-rebutted

Dishonoured cheques issued by defendant by themselves established that defendant was liable to pay the amount to plaintiff

Cheque was a negotiable instrument and there was rebuttable presumption that every such instrument was made, drawn, accepted and endorsed for consideration

Defendants did not come forward to rebut evidence or such presumption

Plaintiff satisfactorily proved his case and was entitled to recovery of amount claimed by him

Suit was decreed in circumstances.