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New Bounced Cheque Law in Uae

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Federal Law No. 18 of 1993 on the Issuance of the Law on Commercial Transactions, which regulates the issuance of cheques, defines a cheque in article 483 as a commercial document containing an instruction given by the subscriber to a bank (the drawer) to pay a certain sum of money on behalf of a third party (the beneficiary) on the date indicated therein as the date of issue. is the beneficiary or its institution. 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. 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. Cheque Rebound Law – One of the most popular ways to conduct financial transactions in the UAE is to make a cashier`s check. And this is a critical factor in the high rate of rejected cheques in the UAE. A rejected cheque, also called bad or dishonoured, can be prosecuted. With a few notable exceptions, most cases of NSF cheques are no longer criminal offences as of January 2, 2022. A rejected cheque is still considered a criminal offence in the UAE, and those responsible can be sued civilly. Let`s explain in detail the law on the rebound of checks in accordance with the law of the United Arab Emirates.

Forge or forge a cheque or assign a cheque to a third party by altering data by adding, deleting or otherwise. Four factors cause a cheque to be returned: How do the amendments protect the rights of someone who complains about rejected cheques? 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. 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? Galadari: Fines are determined according to the offense. Since rejected cheques have been decriminalized, there is no jail time unless fraud can be proven. It is a question of relief, which gives people the opportunity to pay their premiums, especially when there are extenuating circumstances. 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. Also, according to the recent change, the penalty for a rejected cheque in the UAE is based on the amount owing. This is in accordance with article 635 bis of the amended Law on Commercial Transactions, which provides that: “A cheque bearing the stamp of the drawee, because it has not been paid for unavailable or insufficient funds, constitutes an instrument of application under the implementing regulations of Federal Law No.

11 of 1992 and its holder has the right to demand enforcement, in whole or in part. If you ever find yourself in a difficult situation where a cheque you issued or received was returned by the bank, here`s everything you need to know. Most importantly, keep an eye out for any changes in the law. The new rules for exchanging cheques in the UAE will come into effect from 2022, but have you caught up with the latest changes to UAE family law? 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 says: Question: I live in Dubai and my business has run into problems. If cheque bounce cases are decriminalized in the UAE, can you explain to me what happens if my backdated rent check is not cashed? I am confident that I will have enough money in my account before the cheque is due, but if not, what should I do? I have asked the real estate company not to submit the cheque for cashing until I confirm it, but I have not yet received a positive response. Please share the penalties if my cheque bounces in such a scenario. What are the legal obligations of a person whose checks have bounced? In addition, the courts can issue an order against the issuer of the check to pay the full amount of the check or the balance of the Galadari check: the holder of the check can now present the check to the court to issue an enforcement order to recover the money. New developments support the rights of the subscriber and cheque drawer by making cheque collection more efficient.

The purpose of this amendment is to simplify the process rather than delay it with a prison sentence. With the latest amendment in 2021, the law now states that anyone who confirms or issues a check in favour of another, knowing that there are insufficient funds or that it is not recoverable, will be fined at least 10% of the amount of the check and not less than AED 1,000. The penalty is doubled in the event of a repeat offence. In addition to the above-mentioned amendment, the new law also limits the cases in which a person can be detained for offences related to checks. Cases of NSF cheques are common in the UAE and can be attributed to various factors such as illegal termination, bankruptcy of a company, leakage of the cheque issuer, etc. In practice, if the holder of a rejected cheque files a complaint with the police, the most realistic option is to settle the case so that all parties can resolve it peacefully at the police station. If a check issued by you is discarded, returned or not cashed, it may result in civil and/or legal action against you. Now the question is, when will a check bounce or become a bad check in the UAE? In the UAE, skipping cheques is a very common problem that people face while in the country. NSF cheque issues can arise in a variety of transactions, including but not limited to business exchanges, bank loans, real estate rentals or purchases, and individual transactions. If the issued cheque is returned/returned or dishonoured, this may result in civil and/or legal action and penalties may be financially severe and discouraging. In accordance with Article 617 of the Commerce Act, the cheque may not be presented for payment before the due date indicated on it and may only be presented on the date indicated. The subscriber should bear in mind that the cheque he issues must meet all the conditions of a legitimate cheque and must be issued and due for payment in the State in accordance with Article 598 of the UAE Commercial Transactions Law.

The legislation also provides a time limit for the claimant to bring a claim against the subscriber or endorser in the event of a cheque bounce that is two years after the deadline for submitting a cheque under section 638. In addition, where judicial proceedings are initiated, the limitation period shall begin to run from the last act of the beneficiary in accordance with Article 640. The cheque holder may bring criminal or civil action against the drawer. In case of civil litigation, the penalty for rejected cheques in Dubai based on the amount of the cheque is shown in the table below: Although imprisonment is considered a last resort, rejected cheques are still legally classified as a criminal offence in the UAE.