Updated Bounced Cheque law in UAE 2022- An ultimate Guide
Cheque bouncing is a relatively common problem that visitors confront in the UAE throughout their stay. It is considered a criminal offense in the UAE, and the legal ramifications and penalties can be financially harsh and frightening. It is critical to learn the regulations to avoid a bounced cheque in the UAE.
In this article, we will be talking about the implications of a bounced cheque in the United Arab Emirates. From explaining what a cheque is, to learning the civil and criminal implications of issuing a wrongful cheque.
- What exactly is a cheque?
- What exactly is a bounced cheque?
- When is the deadline for presenting a cheque in the UAE?
- How is the legal procedure for a bounced cheque?
- What is the procedure in a criminal case for a bounced cheque?
- What is the procedure in a civil case for a bounced cheque?
- How can we help you solve your bounced cheque issues in the UAE?
1. What exactly is a cheque?
A cheque (or check) is a negotiable instrument that is commonly used in place of money. The Commercial Transactions Law governs the issuance and distribution of checks in the UAE. They also guarantee the validity of bounced cheques in the UAE.
A check is defined in the legislation as “an order given by a person to a bank to pay a certain quantity of money to the request of a 3rd party”. To put it simply, a person can pay for services with a check, and the person getting the check will go to the bank and ask for monetary compensation.
A properly prepared and signed check authorizes the bank to release the drawer’s funds. As a result, the cheque is an irreversible payment tool. The bank is required to pay the cheques even when the drawer objects unless the cheque was misplaced or the bearer fell bankrupt.
The cheque issuer must be aware that there are certain standards that a cheque must meet to be valid under the law. Otherwise, they could be violating the UAE bounced cheque law.
1.1 The structure
Cheques written and receivable for payment in the Emirates must be drawn on a bank. Each bank offers checkbooks containing specifically printed, highly secure forms – blank cheques – to bank account holders. Always giving the headlines for the UAE bounced cheque law.
Each cheque must have the account owner’s name, his bank details, and the cheque’s serial number. That way, the civil case for a bounced cheque in the UAE is unequivocal to the owner of the account.
Our team, Connect Legal, counts on the latest updates about the validity of bounced cheques in the UAE. We can help you navigate through any complaints you might have or might be facing. Understanding the new bounced cheque law in the UAE is crucial to avoid any form of penalty.
1.2 The specifics
According to the Emirates Commercial Transactions Law, there is specific information that a cheque must include to be valid. Anybody issuing a cheque without the proper information could face a civil case for a bounced cheque in the UAE.
- The term “cheque” is inscribed in the instrument’s text in the language in which it is written.
- An instruction to pay a certain sum of money.
- The title of the bank that is going to pay.
- The identity of the person or organization to whom or whose order payments should be paid.
- The payment location.
- The location and date of the cheque’s issuance.
- The writer of the cheque’s legit
The legislation makes no mention of a cheque being void if it lacks a date. According to the bounced cheque new law in the UAE, if the dates on the cheque seem absent, the day of issue is the day the cheque is presented for payment.
If the location of payment is not mentioned on the cheque, the location listed next to the bank details is presumed to be the location of payment. The bounced cheque new law in the UAE states that when it is not given at all, the payment location must be the bank’s main office.
1.3 Funding availability
In the UAE, the rules and norms of good faith are taken into consideration. The drawer must remember that he cannot write a check if he knows he will not have sufficient cash in his balance for the drawer on the day of issuance. Contact our lawyers if you think you have made a mistake regarding this topic.
According to the new bounced cheque law in the UAE, anyone issuing a cheque knowing there is no sufficient amount on their account can face punishment. Facing a civil case for a bounced cheque in the UAE is one of the possible implications.
Failure to furnish such sum, in part on whole, empowers the payee to obtain a declaration from the bank. Furthermore, the bounced cheque new law in the UAE states that the declaration can be proof in any legal action brought against the drawer.
2. What exactly is a bounced cheque?
A bounced cheque in the UAE (sometimes known as a “Dishonored cheque” or “bad cheque” is given by the payee but is rejected by the bank. There is a new bounced cheque law in the UAE dedicated to dealing with this matter. On our blog, you can find a lot more about this and other legal updates.
The bank informs that the amounts in the drawer’s account at the time of issue are insufficient to meet the sum specified on the check, either partially or entirely. The cheque is thus rejected and tagged by the bank as a bounced cheque in the UAE.
Sometimes the bank gets a directive from the issuer not to cash the check. Other times the drawer creates or signs a cheque in such a way that it cannot be cashed. By omitting or modifying his signature they create a bounced cheque in the UAE.
Additionally, there are cases in which before the given cheque was submitted for payment, the drawer’s checking account was shut. This will also result in a bounced cheque in the UAE. Please feel free to contact us in case you wish to obtain more information about this.
3. When is the deadline for presenting a cheque?
A check is payable on the day specified as the issue date. It may not be submitted for payment before such date and must be submitted for payment within six months after the date mentioned on the check as the date of issue.
In accordance with the new bounced cheque law in the UAE, it is vital to highlight that the drawer must supply the considerations for payment on the day of issuance. Additionally, such consideration must remain with the drawee until the time restriction for presenting the cheque expires.
In case you have any further doubts about this, you can consult our banking lawyers and they will provide all the information you need. Bounced cheque in the UAE is a serious matter, and should not be taken lightly.
4. How is the legal procedure for a bounced cheque?
Whenever a cheque is considered a bounced cheque in the UAE, failing to pay could be proven by a bank statement. The bank cannot decline a request to produce such a statement, but it may seek a three-working-day grace time following the presentation of the cheque to approach the drawer.
In case your bank contacts you for a bounced cheque in the UAE but you think it is a mistake, do not hesitate. You must contact the best legal representation in Dubai to help you solve this matter quickly.
The bearer is under no legal duty to address the dispute with the drawer via direct interaction and may instead contact a legal services provider. In consonance with the UAE bounced cheque law, they might start a legal dispute in court.
These processes might take the form of a civil case or criminal case. Depending on the nature of the crime, the implications, and the amount. The new bounced cheque law in the UAE will determine the harshness of the procedure.
5. What is the procedure in a criminal case for a bounced cheque?
A bounced cheque in the UAE can occur in a range of business exchanges. Including but not exclusive to stock exchanges, loans, property leases or purchases, and individual transactions.
To launch a complaint about a bounced cheque in the UAE, the carrier must formally register a complaint against the writer with the authorities of the particular emirate.
5.1 Complain to the police
In Dubai, such a report may be lodged via the Dubai Police smartphone app. Following receipt of the report, the police should call the cheque’s issuer to advise him of the situation and seek his attendance.
The drawer is permitted to resolve the matter at the police station by paying the sum of the bounced cheque in the UAE. No further legal action will be taken in that instance.
The author of the bounced cheque in the UAE has the opportunity to require further time to resolve the situation. On such a request, the author may be allowed a reasonable amount of time, which is guaranteed by the custody of his travel document at the police department.
However, it is very dependent on the size of the cheque, since, in many circumstances, police officials would refuse such a promise of storing the passport if the sum put on the cheque is large.
5.2 Travel ban and arrest orders
Because the validity of bounced cheque in the UAE is a criminal offense in the UAE, a travel ban/arrest order will be issued immediately upon submitting a case at the police station.
As a result, the person who issued the cheque will be barred from leaving the nation and arrested if they attempted to leave, or they will be held upon entry if they enter the Emirates from elsewhere. Contact an immigration lawyer if you find yourself in a difficult situation regarding these topics.
Only once the bounced cheque in the UAE problem is solved or after completing a term can such a ban/warrant be lifted.
5.3 The Prosecutor’s Office
If the opponents are unable to settle the bounced cheque in the UAE issue at the police department, the police will forward the allegation to the prosecutor for additional inquiry. Following the hearing of the opponents, the state prosecution makes choices on the case.
If bail is rejected, the prosecutor’s office may request the drawer’s imprisonment until the matter is heard and decided by the court. Make sure you count on a great criminal lawyer in case you are facing this problem.
5.4 The Criminal Court
The criminal court’s function is to delve deeper into the case specifics, opposing statements, and available evidence. The court next determines the validity of bounced cheque the an UAE.
Once each of the criminal components is met, the court will decide on the perpetrator’s punishment. This can be limited to a fine imposed entirely by the court, which is normally from AED 1,000 to AED 30,000.
Can be more depending on the verdict reached and the sum claimed. The court could also sentence the culprit to prison imprisonment ranging from one year to three years.
6. What is the procedure in a civil case for a bounced cheque?
The criminal and civil courts operate independently. As a result, the criminal court’s punishment is solely a consequence for the act of releasing a cheque dishonestly with insufficient money. Including withdrawing part of the funds or all after handing the cheque.
According to the latest information, cheque bounce is no longer an offense, but that does not mean it has no consequences whatsoever. It is important to understand that a bounced cheque in the UAE is still a serious matter.
Nonetheless, the criminal trial court may refer the civil lawsuit to the court of law for resolution. The claimant may also bring his case in civil court to assert his entitlement to the disputed sum.
7. How can we help you solve your bounced cheque issues?
Bounced check complaints and instances can be ascribed to a variety of factors. Both criminal and civil processes can be filed against the culprit. As a result, it is critical for anyone trying to deal with cheques in the Emirates to understand all the banking and cash regulations.
If you have a company dealing with big sums of money, we highly recommend our legal services for businesses. In this way, you will not have to worry about banking issues.
Connect Legal is your best ally when it comes to carrying out any legal procedure in the United Arab Emirates. We offer you the guidance of the most experienced lawyers to assist you through any process you may be going through. For example, our team can help you resolve the following legal matters:
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