Dubai: What happens when and if your cheque bounces in the UAE?
We compiled these laws and rules in relation to bounced cheque cases in the UAE
Dubai: According to a legal order passed in 2017, a person who issued a cheque - worth Dh200,000 or less - that bounced could absolve his or her case after paying a fine. On Monday, during the Gitex Technology Week, an official said a new provision was being created to faciliate the implementation of this order in an easier manner on users' phones.
People with bounced cheques worth less than Dh200,000 in Dubai can get cases closed by paying fines on their smartphones without having to go to police station.
However, paying the fine alone does not completely absolve the issuer of a bad cheque. The complainant, in this case the person who received the cheque, can still file a case with the court. If that does happen, you need to know the following.
We had earlier reported, when the law came into effect, that the fines would be:
· Bounced cheques worth Dh1 to Dh50,000: Dh2,000
· Bounced cheques worth Dh50,000 to Dh100,000: Dh5,000
· Bounced cheques worth Dh100,000 to Dh200,000: Dh10,000
According to the Legal Order Law No 1 of 2017 which came into effect in December 2017, people with bounced cheques worth less than Dh200,000 can be punished by prosecution without the case being referred to the judges, with the payment of a maximum fine of Dh10,000.
Who convicts the cheque issuer
The criminal court and civil court function separately.
When the receiver of a cheque (which bounced) files the initial complaint in the police station against the issuer, the case is forwarded to the public prosecution. This may be dealt with a legal order and a fine at this stage or, if the cheque is more than Dh200,000 or the case needs more investigation, forwarded to the criminal court. The criminal court may convict the issuer (based on evidence provided by the complainant) and give him/her two options - pay the money or go to jail.
However, in case of failure to get cheque amount despite conviction and imprisonment, the complainant should present his or her case to the civil court next, to claim the money, along with documents and evidence to prove it. The civil court could then either demand the issuer to pay or face a jail term.
What if he/she already paid the fine
In case the issuer of the bad cheque pays the fine, for cheques lower than or equal to Dh200,000, the complainant can go straight to a civil court to claim his dues. A top judge told Gulf News when the new law came into effect that the victim has three years to file the civil case from the time the issuer was convicted and paid the fine.
Unable to pay after jail term
If a certain person was convicted for a bounced cheque case and has served jail term, he or she stands released after the period. However, if the original complainant files the case again in the civil court for the second time, he or she will have to pay the unpaid amount then or go back to jail on conviction from said civil court. In case there is no pending or second case once the jail term is completed, the person is free to leave the country after collecting his impounded passport.
Who is liable for a corporate cheque
In companies or partnership firms, not all partners or stakeholders can be held liable in the event of a cheque being issued without sufficient funds to pay it off.
The criminal liability shall be borne by the individual who signed the cheque - whether it be a manager or a partner/co-owner. Other people's private funds have no bearing on the value of the cheque. Its value shall be realised only through the assets of the company.
However, if the losses or lack of funds which resulted in the company-issued cheque bouncing, are proven to be a result of any kind of fraud by the owners or partners, the case may take a different direction.
What if owners or managers abscond
If it is proved that the company, which the complainant has dealt with, does not have enough funds to settle the cheque’s value, he or she can file a criminal case against the manager who signed the cheque, even if he or she has left the country. After a judgement is issued, the questioner may request the concerned authority to include the manager’s name in Interpol’s wanted list.
- Always keep a copy of all the personal cheques you sign for banking, renting or any other purposes. A photo is more than enough to ensure that when the obligation is done, you can keep track of due cheques and cancelled ones (like security cheques given to banks for personal loans).
- If you're a manager or accountant authorised to sign cheques, have email trails for every cheque signed no matter the amount. Even if your boss asks you to sign a cheque, ultimately the person who signed is liable to a major extent. Again, keep copies of the cheque and correspondence.
Disclaimer: This article is to be used just as a reader guide to bounced cheque case procedures in UAE - please contact your lawyer or local authorities before proceeding with any legal action. Gulf News is not responsible for misinterpretation of, or change to any of the information mentioned herein.