Cheques are one of the ways of paying debts and completing payments. With the concept of cheques comes along what we know or hear about bounced or dishonored cheques.
One of the most common offenses in the UAE is bounced cheques.
This topic of bounced cheques raises an array of exciting questions, and we start with the following:
What are the cases where a cheque is bounced or dishonored?
A cheque is called dishonored whenever the payee presents the cheque to the bank, and the latter refuses payment.
Such refusal may be addressed due to several reasons from which we mention:
- Insufficient funds.
- Mismatched signature.
- Mismatch of the amount and figures.
- Incorrect date.
- Stale cheque.
What recourse can a payee seek?
When a cheque is dishonored, the bank immediately issues a “cheque return memo.” The person bearing the cheque (Bearer) can choose to resubmit it within six months, starting the date mentioned.
However, the bearer can directly seek legal action. We mean a criminal case since a bounced cheque is considered a criminal offense and a civil case to allow the bearer to get the due amount.
How does a bearer file a criminal case, and what happens?
- Filing a complaint to the police within a term of 5 years from the cheque receivable date.
Suppose the person in default of payment (Drawer)pays the respective amount. In that case, the legal proceeding ends here, but if he does not, the following applies:
- The police will register the complaint.
- The Drawer will be banned from traveling.
- The complaint will be referred to the public prosecutor.
- The public prosecutor will examine the case. If he finds there are substantial grounds, he will transfer it to the criminal court.
- The criminal court will issue a judgment.
The judgment that is to be issued by the criminal court shall comprise of a fine or imprisonment, and here it is essential to mention this. As of the year 2017, and with the issuance of the Criminal Order Law no 1 of 2017, the Drawers of bounced cheques of amounts not exceeding AED 200,000 won’t be subject to imprisonment since the law above considered the offense as a misconduct one.
Why should the Drawer file a civil case also?
Since the fines applied by the criminal court are not paid to the bearer, but the UAE government, the bearer should file a civil case to retrieve his money.
The civil court will examine the case and issue a judgment obliging the Drawer to pay the due amount in addition to the interest that the bearer (now claimant) has requested.
Most people think that this is it. If they pay the due amount, everything gets back to normal, but the truth is contrary.
Even if the Drawer manages to pay back the bounced cheque, a black dot will be registered on the Drawer’s criminal record. The record won’t be removed until the Drawer takes legal action for its removal.
This will affect every action that the Drawer will intend to take with the governments and so.
Bringing up this subject during these times is crucial since the world is going through tough times, and people are running low on money.
Every individual should think before issuing a cheque that they know will be bounced for all of the abovementioned. The issue won’t be settled by just paying the due amount, and it will affect your future actions.