Don’t Tear Up That Check Just Yet: A Legal Case Breakdown
This blog post tackles a recent legal case decided by the Lahore High Court, Multan Bench. It simplifies the legalese for everyday folks and explains what the court decided about torn cheques and unpaid dues.
The Case: A Torn Cheque and Broken Trust?
Imagine Liaquat Ali owes Noor Ahmad a significant sum of money (Rs. 1,100,000!). As security, Liaquat issues a cheque to Noor Ahmad. But here’s the twist: the cheque is torn! Noor Ahmad sues Liaquat to recover the money.
The Legal Battleground
Liaquat argues that the torn cheque shouldn’t be a basis for the lawsuit. He claims the ripped condition makes it an invalid instrument. Additionally, he contests the very reason for the cheque – he says it was meant for arbitrators in a previous dispute, not Noor Ahmad directly.
Torn Checks: Fact vs. Fiction
The court wrestles with two key questions:
Does a torn cheque lose its legal validity? No, not necessarily. The Negotiable Instruments Act says a cheque can still be valid even if torn, as long as crucial details like payee name, amount, and drawer’s signature remain intact. In this case, the court found the essential information was clear on the torn cheque.
Who has the burden of proof? The presumption in Pakistan is that a cheque is issued for a valid reason and the amount is due. This puts the burden on Liaquat, the one who issued the cheque, to prove otherwise.
Judgement on Bounced Cheque
Contradictory Stories The court finds his explanations about the cheque fishy. He first claims it was for arbitrators, then changes his story in court. This weakens his case.
Missing Evidence Liaquat doesn’t provide any evidence to support his claims – no witness arbitrators, no proof of a settled dispute.
Key Factors
Torn cheques can still be valid Don’t automatically assume a ripped cheque is useless. If the crucial details are clear, it can still be used for legal claims.
Keep good records If you issue a cheque, especially for a large sum, keep a record of the reason and any agreements. This can be helpful in case of future disputes.
Burden of proof is on the issuer If you issue a cheque and then claim it shouldn’t be cashed, you’ll need solid evidence to convince the court.
Contact Us
This blog post simplifies a legal case but isn’t a substitute for professional legal advice. If you face a situation involving cheques or debt recovery, consult a lawyer for guidance specific to your circumstances. The PDF for the Full citation is below for reference.
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