Amendments in dealing with check issues towards UAE nationals and foreigners FHS Legal Consultants - FHS Law Firm

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Amendments in dealing with check issues towards UAE nationals and foreigners FHS Legal Consultants

Under Article 401 of Federal Law No. 3 of 1987: (The Penal Code, the law stipulates the following:

“Attachment or punishment shall be imposed on any person who, in bad faith, issues a bond (check) without sufficient and withdrawable funds, or after issuing the check withdraws all or part of the balance, making the balance insufficient for the settlement of the check, or if he requires the drawee not to cash the check or makes or signs the check in such a way as to prevent him from cashing it. The same penalty shall apply to any person who endorses a check in favor of another person or gives him a bearer bond, knowing that there is insufficient funds to pay the value of the check or that it is not payable to withdraw”

So someone may write you a check knowing that his balance does not cover it or sign in a different way than he usually signs so that the check comes with a refusal, or he may write you a check and then withdraw his balance to prevent you from cashing this check

What is the opinion of the UAE law in this case? 

1-If the check is returned, the issuer is liable to criminal prosecution

2-The issuer of the bounced check shall be liable for a contract or condition as per 2. Recent directives and circulars issued by the Presidency of the State, the Public Prosecution and the Police, the provisions stipulated in Article 401 of the Penal Code have actually been amended in cases where the offender is an Emirati citizen, and since the issuance of this amendment in cases where it is proven that the check was issued as security for the payment of a financial obligation in favor of the financial institution in which the debt was incurred (for example, a bank), there will be no bias or consequences on the authenticity of the check in proving the debts and it is considered a commercial paper proving Responsibility, and then gives all the rights of the Emirati citizen, to demand civil litigation procedures, so the complainant will get his right, if he is a right holder, regardless of the nationality of the defendant who wrote the check without balance. Required installments, or security deposit checks, on which we write the amount of the check, but without a date and the checks will only be cashed in the event of damage, and therefore security checks should be considered a type of check issued to secure payment due at a later date, rather than a check issued to pay an immediate financial obligation. Therefore, the circulars stipulate that when a security check is issued by an Emirati citizen, the fact that the check has been issued cannot be used as evidence that the issuer was at any time responsible for the amount of the check. However, the circulars allowed the judicial authorities in the courts, the Public Prosecution and the police to search for the purpose behind issuing a check to ascertain whether it was a security from a citizen of a country. Emirates towards the payment of its financial obligations or not.

In cases where it is proved that the check was issued as a guarantee tool only, the case can be terminated, and the Public Prosecution may release any Emirati citizen detained or under investigation for such kind, regardless of whether it happened before the aforementioned directives were issued. and circulars

In practice, the police should inquire of the bank upon complaint regarding the reason behind the issuance of the check by the Emirati citizen, with the aim of determining whether the citizen issued the check as a security tool pursuant to the issued circulars and amendments. In addition, the police must take a copy of the cheque, and return the original copy to the complaining bank after marking it with an official seal, register the complaint under the crime number, and submit the application to the Public Prosecution.

It is worth noting that the procedure for registering complaints according to the crime number is a way to keep the complaint at the level of the Public Prosecution, if. The check was a guarantee instrument issued by an Emirati citizen 

So the usual practice is to refer the criminal complaint from the police to the Public Prosecution in order to investigate the facts, after which it is referred. Matter to the criminal court  

The court usually replaces the severe penalties stipulated in the Penal Code and imprisonment by obliging the foreigner who refused the check he wrote to pay the money due to solve the problem

From the foregoing, we see that in cases where checks are issued as a guarantee tool by an Emirati citizen, he has a certain degree of protection from criminal prosecution, according to the Penal Code and its new amendments. As for the case in which the source of the check is foreign, criminal courts often do not apply the law strictly, but rather in the spirit of the law that takes the merits into account. We must also take into account the fact that the criminal courts have limited power in relation to the order. The financial obligation shown by the check is binding – so the court may issue a judgment in favor of the recipient, ordering that the issuer pay what is owed, or serve a period of imprisonment. It may initially appear that the pragmatic approach taken in cases of bounced cheques is detrimental to the intended benefit and the bank however, regardless of the circumstances or the parties involved the bank has the option of pursuing a civil case against the defaulting party. The judgment of the bank in the civil courts will prove to be of greater benefit than in the criminal courts, for while the criminal courts may imprison the defaulting party or seize his property, the civil courts may order the payment of the actual debt amount. In addition, any judgment issued by the civil courts may include, but not limited to, the debtor’s financial accounts, cash and tips from the workplace, and stocks in the UAE stock market. and vehicles, not to mention assets such as real estate.

If the litigating party is not aware of the full amount of the debtor’s assets, then a request can be submitted to the judge to investigate the amounts and property of the debtor. In the meantime, a request may be submitted for temporary seizure of the debtor’s property pending a decision on the case.

It seems reasonable to conclude that despite the fact that citizens are now provided with certain anesthesia with regard to the rejected checks, the precedents indicate that foreign citizens may not punish the maximum punishment that the law is permitted, and the means of recession claimed by the civil law must be taken into account, including) in that amount Within the return of the amount of the check to the beneficiary party without entering the severe penalties. Like a prison

It is worth noting that the legislative authority in the United Arab Emirates continues to make amendments to its laws, with the aim of establishing. The principles of freedom, justice, and security that characterize this beautiful country

For more information and to obtain assistance, contact a group of the most skilled legal advisors in Abu Dhabi. We have gathered them in our company, FHS Legal Consultants, for you to obtain the best legal services.

Where #FHS Legal Consultancy is considered one of the leading companies in its field, as it provides integrated legal services by providing all possible legal assistance related to companies or persons, and even judicial disputes alike, while providing all these services in one place.

 For FHS Consulting, do not hesitate to contact us at the FHS office. 

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