What banks can do in case of dishonoured cheque in UAE

Dubai - Dishonour of a cheque due to insufficient funds is a criminal offence.

Question: I have amassed a credit card debt with various banks due to loss of my job. I need to know that once the police case is settled and closed with fine for dishonour of security cheque, can the bank still pursue further legal action against me for recovery of money even if they claim the same from the insurance company?
Answer: Dishonour of a cheque due to insufficient funds is a criminal offence against the signatory of the cheque. 
Whenever a cheque is dishonoured by the bank, a criminal complaint may be initiated by the cheque's beneficiary, who shall be the complainant in this matter. Article 401 of Federal Law No. 3 of 1987 on issuance of Penal Code (the 'Criminal Law') of UAE 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.
The same penalty shall apply to anyone who endorses a cheque in favour of another or gives him a bearer draft, knowing that there is no sufficient balance to honour the cheque or that it is not drawable."
Based on the above provision, it is the discretion of the court to decide the quantum of punishment, which may either be fine or detention or both. Normally, a travel ban may be imposed on the signatory of the cheque by the public prosecutor. If you are cleared of the criminal case filed against you, the bank may file a civil claim against you for the amount on the cheque plus costs and seek a travel ban, in accordance with Article 644 of Federal Law No. 18 of 1993 on the issuance of The Commercial Transactions Law, which states: "If a penal action in any of the cheque-related crimes provided for in the law of penalties have been filed against the drawer, the holder of the cheque who claims the civil right may sue the court for obtaining an amount equivalent to that of the cheque or to the extent of the unpaid amount of its value, apart from the compensation, when necessary."
Further, the bank may at its discretion pursue criminal and or civil charges against you and recovery of the amount from the insurance policy held by the bank does not provide you any immunity.
Know the law
Detention or a fine shall be imposed on anyone who, in bad faith, gives a 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.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, Singapore and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.