Understanding Cheque Bounce Cases in Dubai

Cheque bounce cases in Dubai are a common legal issue that individuals and businesses may encounter when dealing with financial transactions. A cheque bounce occurs when a cheque presented for payment is returned by the bank due to insufficient funds in the issuer's account or various other reasons. In this article, we will delve into the key aspects of cheque bounce cases in Dubai, including the legal framework, consequences, and potential defences.

Legal Framework :
In Dubai, the laws governing cheque bounce cases are primarily outlined in Federal Law No. 18 of 1993, also known as the UAE Commercial Transactions Law. According to this law, a bounced cheque is considered a criminal offence, and penalties can be severe, including imprisonment and fines. Legal professionals at Rashid Al Naqbi Advocates can provide more detailed information on UAE law.

The Process :
1.    Notice of Bounce: When a cheque bounces, the payee or holder must notify the issuer within 30 days of receiving the bounced cheque.
2.    Issuer's Response: Upon receiving the notice, the issuer has 15 days to settle the debt or make an arrangement with the payee. Failure to do, so can lead to legal action.
3.    Filing a Complaint: If the issuer does not settle the debt or respond within the specified time frame, the payee can file a complaint with the police. The police will investigate the case, and if they find evidence of wrongdoing, they will refer it to the public prosecutor.
4.    Legal Action: The public prosecutor may decide to take legal action against the issuer, leading to a cheque bounce case being filed in court.

Consequences :
Cheque bounce cases can have serious consequences for both the issuer and the payee:
1.    Issuer: If found guilty, the issuer may face imprisonment for up to three years and fines. Additionally, their creditworthiness can be adversely affected, making it difficult to secure future loans or financial services.
2.    Payee: On the other hand, the payee may suffer financial losses due to the bounced cheque. They will also incur legal expenses while pursuing the case.

Defences :
While the consequences of a cheque bounce case can be severe, there are certain defences that an issuer may use to mitigate their liability:
1.    Lack of Intent: If the issuer can prove that they did not intend to defraud the payee and the cheque bounced due to genuine financial difficulties, the court may consider this as a valid defence.
2.    Forgery: If the cheque was forged or signed without the issuer's consent, they can argue that they are not responsible for the bounced cheque.
3.    Dispute: In some cases, the cheque bounce may be the result of a genuine dispute between the parties involved. If this can be proven, it may serve as a defence.

Conclusion :
Cheque bounce cases in Dubai are a serious matter, and individuals and businesses need to be aware of the legal framework and potential consequences associated with them. It is advisable to handle financial transactions with caution, ensuring that there are sufficient funds in the account to cover issued cheques. It is crucial to seek legal advice and assistance from reliable sources like Rashid Al Naqbi Advocates when facing legal cases to navigate the process effectively. Ultimately, understanding the intricacies of cheque bounce cases can help individuals and businesses protect their interests and avoid legal troubles in Dubai.

To avail of the consultation of the lawyers of Al Naqbi Advocates, you may contact us

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