Bounced Cheques
Cheque Bounce in UAE
In the UAE, a bounced cheque is a serious legal matter. It can be very stressful and confusing to deal with a cheque bounce case. Whether you are a business owner, an employee, or an individual it is very important for you to follow the right process if you find yourself in the same situation. At HHS Lawyers, we offer professional legal help in cheque bounce cases in the UAE so that you know your rights and are assisted in every legal step.
What is a Bounced Cheque?
A cheque is said to have bounced or dishonored when the bank fails to process the cheque payment. This happens for the following reasons:
- Lack of enough money in the account
- Mismatched or incorrect signature
- Closure of the bank account
- Account freeze due to legal reasons
- Post-dated cheque presented before its due date
In other words, if you issue a cheque and the bank rejects it, it is called a bounced cheque.
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Legal Consequences of Cheque Bounce in the UAE
The legal consequence of a cheque bounce is determined by the cheque amount and the reason behind the case.
- Civil Offense: Since the amendment in 2022, most of the cheque bounce cases have been treated as civil offenses rather than criminal offenses. It will bring amicable settlements between parties who are involved.
- Fines: The penalty amount differs based on the cheque value. There will be a fine of Dh2,000 for Dh50,000, while bounced cheques of between Dh50,000 and Dh100,000 will have to bear a Dh5,000 penalty, with a penalty of Dh10,000 for cheques between Dh100,000 and Dh200,000.
If the cheque value is less than AED 200,000, the issuer may avoid criminal proceedings by paying a fine.
- Partial Payment: Except where the beneficiary refuses, the banks must release all available funds in the issuer’s account for the purpose of making partial payment.
- Civil Lawsuits: Cheque bearers can file a civil suit to recover the unpaid amount. Such cases may result in fast track judicial processes.
- Criminal Charges in Specific Cases: However, it should be noted that the offenses in particular cases may still be considered as criminal offences, for example, in cases where such intent is found to exist for purposes of fraud or cheque falsification.
- Travel Bans and Account Freezing: In extreme situations, the issuer may be banned from traveling or have a bank account frozen.
Legal Framework Governing Cheque Bounce Cases in the UAE
The legal framework governing cheque bounce case in the UAE are as follows:
- Federal Decree-Law No. 50/2022 Issuing the Commercial Transactions Law: This law updates the rules of the cheque issuance and handing. It also defines cheque as a commercial paper that includes an order issued by the drawer to the drawee bank, to pay on the date fixed therein as the date of issuing a specific amount of money to a third person namely the beneficiary or to bearer. It also outlines the legal obligations of the issuer and the recipient.
The law states that the dishonor may be proved by a statement issued by the drawee together with stating the presentment day. The statement shall be dated and written on the cheque itself.
- Decriminalization of Bounced Cheques: Under Federal Decree Law No.14 of 2020 most of cheque bounce cases are no longer considered as criminal offenses. They are dealt with as civil matters unless there is fraudulent intent or falsified cheque.
- Partial Payment Enforcement: For partial payments of a cheque, banks should honour the available balance in the issuer’s account and provide a certificate regarding the unpaid portion for civil claims.
- Civil and Criminal Remedies: Most cases are settled through civil lawsuits, but criminal action may still be initiated in such cases such as the issuing of cheques with fraudulent intent or from ‘closed’ accounts.
- Fast Track Judicial Procedures: The UAE has initiated the fast track of judicial procedures to settle cheque based disputes promptly.
- Preventive measures: Individuals or businesses are encouraged to ensure sufficient funds in their accounts, check the issuance of cheques regularly, and take legal advice in order to avoid complexities.
Steps to Handle a Bounced Cheque
If you have presented a cheque that has bounced, the following should be done as soon as possible:
- Verify the Cheque Details: Check for errors in the cheque such as the date or amount or signature. Be certain that there were no issues when the cheque was presented at the bank.
- Contact the Issuer: Reach out to the person or business that issued the cheque. In some cases, the issue could be resolved informally if the issuer is agreeable to fixing the issue.
- Partial Payment Option: The bank must check if there are any available funds in the account of the issuer and give you a partial payment for it. You would either accept this or proceed with civil action.
- File a Civil Case: If the cheque is not paid, you may institute a civil suit for the recovery of the amount. Fast track proceedings are available in such cases.
- Criminal Complaint: If there are acts committed with a fraudulent intent such as falsification of cheques or account closure, then a complaint may be put in with the police for prosecution.
- Seek Legal Advice: A lawyer with specialization in cheque bounce cases would best be able to educate you about your rights and the legal resources available to you.
- Document Everything: You should keep a complete record of the bounced cheque, notifications by the bank, and correspondence with the issuer. These records will assist you in case of any legal action.
It is therefore recommended to seek legal advice before filing your complaint to prevent any delay or error that may be made while filing your complaint.
HHS Lawyers assists clients through settlement discussions as well as court representation to protect their rights.
How HHS Lawyers Can Help You
At HHS Lawyers, our lawyers are specialized in cheque bounce cases. We offer following services:
- Interpretation of Laws: The team simplifies how UAE laws apply to cheque bounce cases. It helps clients understand their rights and entitlements.
- Analysis of the Situation: They evaluate your cheque bounce situation and guide you on the best possible legal action, be it a civil or criminal case.
- Court Representation: HHS Lawyers appear and represent the clients for the recovery of unpaid amounts or address charges such as fraud.
- Expedited Debt Recovery: They have effective means of recovering cheque value through legal measures, including fast-track systems.
- Prevention of Cheque Bounce Issues: Advises businesses and individuals on cheque management and funds maintenance to avoid problems.
- Settlement Assistance: Facilitation of dispute negotiation and settlement for a win-win outcome for both parties.
HHS Lawyers are experienced enough in addressing cheque bounce cases for any individual in need of it.
Contact HHS Lawyers Today
Contact HHS Lawyers when you encounter cheque bounce problems within the UAE. Our legal professionals at HHS Lawyers stand prepared to offer legal advice together with expert legal defence and emotional relief to clients.
Contact our cheque bounce legal experts by scheduling a consultation or calling us today.
Other reasons to trust our cheque bounce UAE professionals:
Experience
With over three decades of mediation and litigation experience, the firm is qualified in reviewing every document relevant to the case and providing support in debt collection, prosecution, and/or defense.
Personal Relationship
We take pride in striving to develop a working client-lawyer relationship as we understand that it is the key in arriving to favorable outcomes. In addition, we take time in understanding your specific situation and what you plan on achieving during consultation sessions.
Results
Although cases are better settled outside of proper courts, the firm can professionally and aggressively pursue claims or exhaust all options and resources to fight for your rights.
Communication
We provide updates on all stages of the process to keep you informed regarding your case’s status. You’ll have direct communication lines with your assigned attorney and make sure all emails and calls are returned promptly.
For legal assistance on matters related to bounced checks, call us today!
