New Criminal Penalties for Dishonoured Cheques In UAE
Posted by Awatif Mohammad Shoqi Advocates & Legal Consultancy on May 8th, 2022
I am assured that most of our readers are well versed with the criminal penalties imposed in UAE for a dishonored or bounced cheque. However, we keep on witnessing the amendments in the law by the government of UAE for ease of the parties registering the case or against whom cheque bounce cases are registered. UAE considered cheque bounce cases as a criminal offense against the drawer of the cheque who issued the cheque with insufficient funds in his bank accounts.
Federal Law number 18 of 1993 (Commercial Transaction Law) defines cheque under Article 483 as an order issued by an individual to his bank on a certain date to release payment from his account to an another individual. However, in certain cases, the cheques issued by the individual is dishonored or not accepted by the bank due to multifold reasons such as:
In the foregoing circumstances, a cheque will most likely be returned from the bank, which deprives the beneficiary of the cheque to en-cash the amount mentioned in the cheque and deprives him of his right under the law. Therefore, the law allows the beneficiary to register a criminal complaint against the drawer of the cheque to subject him to criminal penalties for committing such crime in the country.
On a recent order issued by the government of Abu Dhabi under Decision number 14 of the year 2020, the penalties imposed on the bounced cheques are now clearly defined and shall be followed by the public prosecutors in Abu Dhabi. The penalties imposed on the cheque bounce cases will be directly dependent on the amount of the cheque issued the drawer. It is apparent from the new decisions that the cheque issued to a maximum amount of AED 500,000 will only be subject to fine and the drawer will not face any arrest in the Emirate.
The cheque of an amount of AED 500,000 will be imposed a maximum fine of AED 20,000, whereas AED 10,000 will be imposed on cheques ranging between AED 200,000 – AED 300,000 and AED 5,000 will be imposed on cheque amounting to AED 10,000- AED 200,000. Lastly any cheque of AED 50,000 until AED 100,000 will be subject to a fine of AED 3,000 and AED 1,000 for any cheque lesser than AED 50,000.
In furtherance, the Attorney General has issued the public prosecutor to amend any fine imposed on the drawer of the cheque as per the foregoing rules within 7 days from issuing the decision of imposing fine. Lawyers in Abu Dhabi yet suggest all readers to be very careful while issuing the cheque which may get dishonored in future as apart from the criminal case, the beneficiary of the cheque has all authorities to register a civil case against the drawer of the cheque.
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About the AuthorAwatif Mohammad Shoqi Advocates & Legal Consultancy
Joined: February 3rd, 2021
Articles Posted: 91
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