Bounced cheque could invite criminal complaint, travel ban in UAE
This is in accordance with Article 401 of Federal Law No. (3) of 1987 on issuance of Penal Code of UAE.
I own a company registered in the emirate of Umm Al Quwain. One of my customers, who is based in Dubai, had issued me a cheque for an amount of Dh50,000 and it was dishonoured due to insufficient funds in his account. Should I lodge a criminal complaint in Dubai or in Umm Al Quwain? Will it be possible for me to recover Dh50,000 at the earliest or will the customer end up paying only a fine and get away with a few more months to pay me the said amount? I am not in a position to engage the services of a lawyer to file a complaint against the customer.
Pursuant to your queries, it is assumed that your customer issued the dishonoured cheque in the name of your company and it is further assumed that your company has an account with a bank based in Umm Al Quwain. It should be noted that dishonour of a cheque in the UAE is considered a criminal offence. This is in accordance with Article 401 of Federal Law No. (3) of 1987 on issuance of Penal Code of UAE(the 'Penal Law')which states:
"Detention or a fine shall be imposed on anyone who, in bad faith, gives a draft (cheque) without a sufficient and drawable balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque, or if he orders a drawee not to cash a cheque or makes or signs the cheque in a manner that prevents it from being cashed."
In furtherance, Article 142 of Federal Law No. (35) of 1992 concerning the criminal procedures law of UAE (the 'Criminal Procedures Law') states: "Jurisdiction shall be determined by the place where the crime occurred." Therefore, based on the aforementioned provision of law, the place of occurrence of crime may be the place where the dishonoured cheque is deposited for collection by the beneficiary of the cheque or the place where the cheque was collected by its beneficiary.
Based on the aforementioned provision of the Criminal Procedures Law, you may file a criminal complaint against your customer on behalf of your company. A criminal complaint against the dishonoured cheque may be filed either in the place where it has been deposited for collection by its beneficiary or at the place where the beneficiary of the cheque received it from its issuer. Therefore, if the dishonoured cheque is deposited in the beneficiary's bank located in Umm Al Quwain, then you could file a criminal complaint at the police station concerned having jurisdiction in Umm Al Quwain. If you received the dishonoured cheque from your customer in the emirate of Dubai, then you could file a criminal complaint at the police station having jurisdiction in the emirate of Dubai.
Further, while filing a criminal complaint against your customer for dishonour of a cheque in the police station, you may seek for a travel ban to be imposed on him so that he cannot travel outside the UAE.
Article 401 of the Penal Law states that whosoever dishonours a cheque, if convicted, may be detained or imposed with a financial penalty. However, if you intend to file a criminal complaint in the emirate of Dubai, then pursuant to Law No. (1) of 2017 called the 'Criminal Order Law', the punishment for dishonour of a cheque may be a financial penalty which may vary between Dh2,000 and Dh10,000. Based on this, once you file a criminal complaint in the emirate of Dubai against your customer, he shall pay the financial penalty and upon payment of this fine the travel ban imposed on him maybe lifted.
To recover the dishonoured cheque's amount from your customer, you may subsequently file a civil case on behalf of your company in the court which has jurisdiction for the amount mentioned on the dishonoured cheque and seek a travel ban on him. This is in accordance with Article 644 of Federal Law No. (18) of 1993 on the issuance of the Commercial Transactions Law, which states:
"Where a criminal action is brought against the drawer for any of the affiances related to the cheques and provided for in the Penal Code, the bearer of the cheque who claimed the civil right may apply to the Criminal Court to enter judgment in his favour for payment of a sum equal to the value of the cheque or to the unpaid amount in addition to compensation where relevant."
Know the law
A criminal complaint against the dishonoured cheque may be filed either in the place where it has been deposited for collection by the beneficiary or at the place where the beneficiary received the cheque from its issuer.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: email@example.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
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