Bounced Cheque is a crime
Bounced cheque is a crime of misdemeanor, that is to say that that the punishment for the bounced cheque may be imprisonment for a definite/fixed term depending on the facts and circumstances of each case. The imprisonment may be coupled with a fine anything between 1,000 – 30,000 Dhs.
And here comes the obvious question, Is there a defense to the bounced cheque?
Yes, there are defenses to the crime of bounced cheque.
Before going to the defenses to the bounced cheque, let me shortly explain the general nature of the crime of a bounced cheque and its criminal elements of actual crime committed and the mental element of the act which makes it a crime.
The cheque must have been written in bad faith. The guilt intention, the mental element attached to all crimes, is attached to the crime when it is committed in fact. The person is taken to have written a cheque in bad faith if he knows that he does not have sufficient funds to clear the cheque at the time he writes it for or he is careless or uncertain as to whether he has or has not sufficient funds to pay the entire sum of the cheque. The drawee’s (the person who writes the cheque) signature on the cheque is a confirmation of the sufficient funds on the account.
- If the cheque is stolen or lost, that may provide a defense to order the bank to cancel the cheque.
- If the cheque is tampered or torn, it is invalid and considered as void, for example if it is not clear to whom the check is written, that may prove to be a defense.
- It is also a defense if the parties (creditor and the debtor) will settle the case before it is decided before the court.
- Another form of a defense may be provided in a situation where the cheques are being negotiated by way of endorsement of the payment to another person (this situation arises when the cheques is being written as a guarantee
- If the endorsement or a re-endoresement is being banned, the endorser is not liable to the person who wrongly acquires the cheque after prohibited endorsement.
- There is also a fairly recently promulgated degree no 56 in 2009, that establishes the Committee responsible to investigate the bounced cheques when they are being written in the context of real estate transactions between the beneficiary/tenant and the developer of the real estate. The Committee has powers to intervene into the criminal proceedings and a duty to investigate the matter and the committee may issue its decision or refer it back to the court for a trial. The Committee may issue a decision to cancel the cheque or to order a new cheque to be written.
Source of law:
- The main Article is 401 UAE Penal Code Degree No 3 of 1987 as amended by Degree 34 of 2005;
- Article 599 UAE Commercial transactions Law Degree No 18 of 1993.
So what you should do if you are an accused in a criminal case due to cheque bounce is not to waste any time and seek assistance from a good law firm who provide Criminal Litigation services. If you would like, you may contact us for the legal assistance and we would be more than happy to help you out.