Articles (Gulf Inside) Cheque bounce in UAE is a criminal offense and cheque writer can face a court trial and jail term also can face a travel ban with a bench warrant, drawer of bounced check unable to leave UAE, and cannot enter if already left until settlements.
To know more about the settlement of the bounced Cheque case and how to the removal of the travel ban, you need to follow the below guide.
New Law Cheque Bounce:
According to the UAE Federal Law No-3 of 1987 promulgating the legal code, both criminal, also as civil proceedings, are often initiated against the perpetrator of bounced cheque writer.
What is Cheque Bounce?
A cheque bounce or bounced check may be a cheque presented by the payee and rejected by the drawer bank under below circumstances:
- Insufficient funds in the drawer account.
- Changed signature on a cheque or refusing it from being paid.
- The drawer’s checking account was closed before the cheque is presented for payment.
1: The Police Complaint:
To file a complaint about a bounced cheque, the bearer of the cheque should formally open a case with the police station of the respective emirate against the drawer. For registering complaints on the bounced cheque in Dubai, you’ll use the Dubai Police app.
After receiving the complaint, the police will contact the issuer of the cheque to notify him/her of the same and request his urgent presence. At the police headquarters, the drawer is allowed to settle the difficulty through paying the complete amount of the bounced cheque. If he/she paid, no further legal proceedings are going to be taken.
If the issuer of the bad cheque doesn’t have money to pay, he/she has the proper to request a while to settle the difficulty. Upon such a request, the issuer could also be granted an inexpensive period secured by the deposit of his passport at the police headquarters. However, it highly depends on the cheque amount as in many cases such a guarantee of depositing the passport is rejected by cops if the quantity drawn on the cheque is more than 1 million dirhams or higher.
Point to be noted that cheque bounced may be a criminal offense within the UAE, upon filing the complaint at the police headquarters, a travel ban and bench warrant on the drawer will be issued automatically. Hence, the issuer of the cheque is going to be banned from leaving the country and arrested if he/she tries to flee, or should be detained on arrival in UAE from outside.
Such a travel ban in UAE is often removed only upon settlement of the cheque bounce case, or after serving a sentence.
2: The Public Prosecution:
In case the opponents failed to resolve the cheque bounce case at the police station, the police then transfer the complaint to the public prosecutor in the court.
Based on the evidence presented within the court, the choice might be a bail either by paying the worth of the bounced cheque or by depositing the passport of the defaulter or another guarantor. In case bail was denied, the public prosecutor may order the detention of the drawer until the court hears and decides on the case.
3: The Criminal Court:
The role of the court in UAE is to dive deeper into that bounce check case, opponents’ arguments, and available evidence. The court then proceeds to look at whether the crime elements are satisfied or not. The crime elements are the fabric element and therefore the mental element.
Once both of the crime elements are satisfied, and by the authority vested in it within Article 401 of the UAE legal code, the court may decide the sanction of the perpetrator.
This can be confined to a fine assessed solely by the court, supported the conclusion reached and therefore the amount claimed and typically ranging between AED 1,000 and AED 30,000+. The court can also decide the sanction of the perpetrator to be serving a jail term of between 1 year and three years.
4: Civil Court Proceedings:
The criminal court and the civil court function separately but may solve both civil cases and criminal cases. Hence, the sentence issued by the court comes only as a sanction for the act of issuing a bounced cheques with insufficient funds in account or withdrawal all or part of the funds after giving the cheque.
The claimant may present his case to the civil court also to say his right to the disputed amount.
After reaching a conclusion supported the evidence and facts presented by the opponents, the civil court can then demand the issuer of the bounced cheque to pay a sum equal either to the worth of the cheque or its outstanding balance. In case the perpetrator fails again to pay the said amount, his assets could also be attached, and he could also be subjected to a different jail term for failing to comply with the civil court orders.
If there are not any pending cases against the bounced cheque writer, once the jail term is completed, he’s allowed to gather his impounded passport and may also leave the country.
Writing a Cheque:
If the issuer of a cheque realized that he did a mistake by writing a cheque and there have been sufficient funds, it is often remedied at any stage of the legal proceedings by providing account statements of cheque submission date.
How to Remove Travel Ban:
Travel ban against Bounce cheque can only be removed through settlement or completing the jail term, the important point for the drawer is that he/she shall confirm to retrieve the bad cheque and obtain a clearance paper from his debtor or court upon payment of the disputed amount or completing the jail term.
Henceforth, no further legal proceedings will be initiated, and the UAE travel ban and an arrest warrant will be removed automatically.
Recent Developments in cheque bounce case:
To mitigate the non-payment of bounced cheques, the UAE government has recently introduced new regulations to punish such crimes with fines rather than jail terms. This initiative allows the issuer of the bounced cheque to urge employment opportunities or other such alternatives to be ready to repay his debt rather than getting to jail, subject to the orders of the public prosecutor.
Cheque Bounce Penalty:
As per the order, cases of cheque bounce the amount not exceeding AED 200,000 shall be punished with the following fines:
If the quantity is a smaller amount than AED 50,000 the cheque bounce penalty is going to be AED 2,000.
If the quantity is between AED 50,000 to 100,000 the fine is going to be AED 5,000.
If the amount written in the bounced cheque is from AED 100,000 to 200,000+, the cheque bounce penalty will be AED 10,000+.
Conclusion and extra care:
Cheque bounce in UAE can be associated with numerous reasons including illegal termination by the company, bankruptcy, absconding of the cheque writer, etc. In practice, when the bearer of the bounced cheque filed a complaint with the police, the most viable way to resolve the issue for both parties is to settle it at the police station amicably.
It is advisable that don’t allow anyone to use your checkbook, as holders of checkbooks can get in trouble for a cheque bounce in UAE even without signing it. The practical experience shows that there are cases where an individual is often subject to legal liability towards a cheque bounce or bounced check case even it’s not signed by him.