Hari Wadhwana, partner at Dubai-based law firm OGH Legal, explained the importance of the circular issued by the Dubai Attorney General`s Office, the essential elements of the circular and how it would affect those involved in cases related to the non-cashing of cheques. Under the previous amendment to the Uncashed Chequs Law, the drawer (the person issuing the cheque) can be fined a minimum of AED 1,000 in the UAE and a minimum term of imprisonment of at least one month, depending on the amount of the cheque. Under Article 641(3), the subscriber is liable to prosecution if he signs the cheque in such a way that the beneficiary cannot honour it. The decree has therefore certainly revealed the intention to file a complaint only for the acts referred to in the three above-mentioned articles, since the articles are described as fraudulent. Therefore, it is considered justified to punish those who commit such an act. An uncashed cheque always leaves you vulnerable to legal action against you. However, you can refund the amount or prove your innocence and require a reasonable amount of time to make your payment. 2. Partial payment of cheques: Under the new amendment, partial payment of cheques is now mandatory. The concept of partial payment applies when the amount available for payment to the bank account is less than the amount indicated in the cheque.
The issue may then require the issuer`s bank to hand over the portion of the cheque, and the remainder may be claimed by issuance through legal proceedings in civil court. The issuer`s bank must also provide the issuer details such as passport number, trading license details and contact details (including phone number and address) to the issue. In addition, in the case of partial payment of cheques, the court may order the issuer to pay either the entire cheque or the remaining amount of the cheque at issue. According to the decree, the convicted person is deprived of the checkbook and prevented from receiving new chequebooks for a maximum period of 5 years. The person could also be suspended because of their ability to engage in professional or commercial activities. Whereas previously, recipients of refused cheques had to file a police report, the new law allows them to contact the court`s enforcement judge directly to order payment of the full – or remaining – value of the cheque in a simple, expedited procedure that reserves the rights of all parties. Illegal use of a cheque the use of which is fraudulent or issued on behalf of a third party, or unlawful advantage of a cheque. Four factors cause a cheque to be returned: Please note that there is no definitive answer as to the penalty for cheque bouncing in the UAE. Each emirate has separate laws that govern the issuance of uncashed checks, which means that the amount of the fine can vary accordingly. The court department will ensure that decrees are issued to release the accused, end the travel ban and seize the arrest warrant, according to the circular, Wadhwana said.
“This must be done by January 2, 2022,” he added. The circular was issued on 19 December 2021. Close the account or withdraw all funds before a cheque is issued or before it is presented to the drawer for payment or has a frozen account. Deliberately writing or signing a cheque to prevent payment. However, penalties for rejected cheques depend on the amount owing. There will be a fine of 2,000 dirhams for 50,000 dirhams, while bouncing checks between 50,000 and 100,000 dirhams will have to be sanctioned with a fine of 5,000 dirhams with a fine of 10,000 dirhams for checks between 100,000 and 200,000 dirhams. While the law itself is quite detailed, one of the key findings affecting people is the fact that rejected cheque cases have been decriminalized. But what happens to cases of rejected checks that were already registered with the authorities before January 2, 2022? What are the legal obligations of a person whose checks have bounced? One of the most important changes introduced is that insufficient funds that lead to cheque bouncing no longer lead to a criminal offence. Instead, the holder shall have the right to request partial or full recovery of funds by way of enforcement in accordance with Article 635. The court may then order the issuer of the cheque to pay all or part of the cheque to the holder. Aditi Gandhi, a Dubai-based lawyer, explained what the new law says about the decriminalization of certain cases of rejected cheques and what happens to previously registered cases. This occurs in a situation where the funds available are less than the value of the cheque.
In this case, the drawer would write the amount of each partial payment on the back of the cheque and the holder would receive the original cheque and a certificate of that payment. Junaid: There will be no criminal record if the check is rejected for insufficient funds. However, the civil court will keep the drawer`s records if civil actions are filed in relation to rejected cheques. The case of rejected cheques in the United Arab Emirates is governed by Article 401 of the Federal Penal Code of the United Arab Emirates of 1987. The law states: In the United Arab Emirates, a bank check is one of the most commonly used methods for financial transactions. This is one of the main reasons why rejected cheques are a common phenomenon in the UAE. Also known as uncashed cheques or bad cheques, a rejected cheque can have legal consequences – civil and criminal – against the issuer. The changes are significant and, among other things, limit the scope of criminal liability in NSF cheques. Penalties for infringements have also been revised. The main changes introduced by Federal Decree-Law No. 14 of 2020 are as follows.
Although imprisonment is considered a last resort, rejected cheques are still legally classified as a criminal offence in the UAE. This is one of the reasons why, when you report a case of control, you must inform the police, regardless of the emirate you are in. Prior to the introduction of the new Order, Section 401 was considered by the Court in a broader context, in particular the notion of “issuing cheques in bad faith”. It provided that if a person issues a cheque that is rejected, such a drawer of the cheque will be considered a defendant and prosecuted. As a result, the criminal court was given the discretion to decide on criminal responsibility, as a list of acts of bad faith was absent from the old law. UAE amendments to cheque bounce law could pave the way for a competitive economy and fairer judicial mechanism The UAE Cabinet amended Federal Law No. 18 of 1993 or the Commercial Transactions Act, including provisions on cheque bouncing. This would come into effect at the end of 2022 and would include a change to the rules on uncashed cheques and the issuance of cheques without. For example, a Gulf News reader wrote when he inquired about the new law and how it would affect his particular case. He asked: “I live in Dubai on a partner visa and wanted to ask about the UAE`s new law regarding financial cases and how it affects immigration status.
I have heard that if someone has a rejected cheque that will be registered in 2021, their immigration status will not be affected. As in, they can travel and even extend their visa from January 2, 2022. In this case, you can avoid further criminal and civil proceedings for undeliverable cheques in the UAE by contacting the police or prosecutor`s office with appropriate documentary evidence of this payment. This ends the legal proceedings against you. The same article provides for custodial penalties ranging from six months to two years and a fine of not less than 10 per cent of the amount of the cheque and at least AED 5,000 if the person instructs the drawer [bank] before the date of repayment not to cash the cheque or to withdraw all his funds before the cheque is presented to the bank, or intentionally writes a check that it cannot be redeemed.
