Cheques in UAE are valid only for 6 months
'In the last five years, I have repaid the amount in full, but my friend hasn't given me back the cheques'
I had a borrowed Dh200,000 from a friend 10 years ago to start a business. I had given four post-dated cheques as a guarantee. In the last five years, I have repaid the amount in full, but my friend hasn't given me back the cheques. Each time I asked for them, he would make some excuse or the other. I did not insist because I know him very well and trusted him. Unfortunately, things went sour between us and now he is asking me to repay the amount that I have already paid and threatening to deposit the cheques. The cheques are 10 years old. Are they still valid?
Pursuant to your queries, it may be noted that the issuance and circulation of cheques in the UAE is regulated by the provisions of Federal Law No. (18) of 1993 on the commercial transactions law (the 'commercial transactions law').
As per the provisions of the commercial transactions law, it may be noted that a cheque is due for payment only on the date stated on it. This is in accordance with Article 617 (1) of the law, which states: "A cheque is due for payment on the date stated thereon as being its date of issue."
Article 617 (2) of the law states: "A cheque may not be presented for payment before such date."
In continuance of the aforementioned provisions, it may be noted that a cheque shall be presented for payment within a time-limit of six months from the stated date. This is in accordance with Article 618 (1) and (2) of the law, which state: "A cheque drawn and made payable in the State or abroad shall be presented for payment within six months. The time limit mentioned in the previous paragraph shall run from the date on the cheque purporting to be the date of issue."
If six months have already elapsed from the date mentioned on the cheques, then they may no longer be presented for collection to the bank.
It may be noted that if six months have not elapsed from the date stated on the cheques and thereafter your friend presents them for payment, criminal proceedings may be initiated against you if they are subsequently dishonoured.
Further, if we assume that the amount of each post-dated cheque issued by you to your friend is less than Dh200,000, then you may be only liable to pay a fine. This is in accordance with Dubai Law No. 1 of 2017 called 'criminal order law', wherein it is stated that the punishment may be fine which may vary between Dh2,000 and Dh10,000 depending on the cheque amount. The aforesaid provision of law is only applied in Dubai.
Based on the aforementioned provisions, it may be prudent on your part to file a case before the Dubai courts, present the evidence of payment made by you against these cheques to your friend and obtain an order from the court to stop payment against the cheques.
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: firstname.lastname@example.org or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
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