What happens if your cheque bounces in UAE

What happens if your cheque bounces in UAE

You may have to pay a fine or undergo imprisonment depending upon the decision of the public prosecution.



Published: Sun 28 Apr 2019, 2:00 PM

Last updated: Sun 28 Apr 2019, 4:29 PM

Q- I am a resident of Dubai and have been staying in a 2BHK flat for the last six years. I have a post-dated rent cheque dated May 6, 2019. I am facing some financial difficulties, and am afraid that I will not have sufficient funds in my bank account when the said cheque is presented for encashment. I have been asking my friends and family members for help, but I have not received any so far. Even the real estate company is not agreeing to withdraw the cheque. What will happen if the cheque bounces? Will there be a police case against me? Can I be evicted? What can be my next course of action in this situation? 
Answer
Pursuant to your queries, dishonour of cheque due to insufficient balance in your bank account will attract criminal proceedings against you in the UAE. This is in accordance with Article  401 of the Federal Law No. 3 of 1987 related to issuance of Penal Code (the 'Penal Law of UAE'), 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.
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."
As you have not specified the cheque amount, it may be noted that pursuant to Law no. 1 of 2017 called 'Criminal Order Law', if the cheque amount is less than Dh200,000, the punishment may be by fine and the fine may vary between Dh2,000 and Dh10,000 depending on the chque amount. The said provision of law is only applied to emirate of Dubai.
Based on the aforementioned provision of law, your landlord or owner of the apartment may file a police complaint if your cheque for May 6, 2019 is dishonoured and you may be prosecuted for it. Further, you may have to pay a fine or undergo imprisonment depending upon the decision of the public prosecution.
Further, your landlord or owner of the apartment has the right to approach Rental Dispute Center in the emirate of Dubai and demand your eviction and recovery of rental amount for non-payment of rent by commencing the process by issuing legal notice through a notary public. This is in accordance with Article 25(1)(a) of the Law No. 33 of 2008 amending some provisions of Law No. 26 of 2007 regulating relationship between landlords & tenants in the emirate of Dubai, which states "Landlord may demand eviction of tenant prior to expiry of tenancy period if the tenant fails to pay rent value or part thereof, within 30 days of landlord's notification for payment; unless parties agreed otherwise and for the purpose of this clause (1) of this Article, the landlord must notify the tenant through the notary public or by registered mail."
Based on the aforementioned provision of law, the landlord or the owner of your apartment may initiate legal action against you by filing eviction and recovery of rental amount in the Rental Dispute Centre, Dubai.
Know the law
Landlord may demand eviction of tenant prior to expiry of tenancy period if he fails to pay rent value or part thereof, within 30 days of landlord's notification for payment
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.


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