Ask Elhais

Question:

Hi, I just want to ask, what should I do? I have borrowed from someone money and i failed to pay it as per agreed date then he added an interest of almost 70%. He was nice at first because he has interest on me, when he ask me for a date and i back out he got angry and suddenly he is very tough in getting his money back to the point that he is threatening me that he will destroy me and he will let my company and my manager about it. And also he is saying a lot of degrading words against me as well as to do bad things like go to the bar and club so you can pay me. All insulting words. I have given him a cheque for this money. I am so stress and have sleepless nights and even felt bad because he insulted me too much. What shall I do? Thank you.

Answer:

We understand that your enquiry pertains to the following: (i) you borrowed some money from an individual; (ii) the lender has charged an interest on the borrowed money; (iii) the lender is defaming you; (iv) you have given a cheque to him as a security against the borrowed money.

Whereas we understand that you borrowed a certain amount from an individual. Accordingly, that individual has the right to claim this amount from you. This right can be exercised by filing a civil case against you. In order to file a civil case, the lender will need to establish that you owe this amount to him by producing relevant documentary evidence. Further, the lender also needs to pay a percentage of the claim amount as court fees to register his claim against you. In Dubai, the maximum court fees is capped at AED40,000/- only.

You must note that Article 204 of the UAE Civil Code provides, “If the subject matter of the disposition or the consideration thereof is money, its amount and type must be specified without any increase or decrease in the value of that money at the time of payment having any effect.”

Accordingly, in the UAE, there is a prohibition on any increase or decrease in the value of the money lent by the lender to you by virtue of any added interest. Further, we will also request you to consider Article 714 of the UAE Civil Code, which provides that “If the contract of loan provides for a benefit in excess of the essence of the contract otherwise than a guarantee of the rights of the lender, such provision shall be void but the contract shall be valid.”

Therefore, any loan agreement, which provides for interest in excess of the principal amount shall be considered void to extent of the interest alone whereas the lender’s right to claim the principal amount shall be upheld.

We also note that you have issued a cheque to the lender. Here, we must inform you that with effect from December 2017 any bounced cheque in the Emirate of Dubai for an amount not exceeding AED200,000/- shall be considered as a misdemeanor and punished with fines alone instead of a jail term.

You may also note that the use of degrading words and the act of insulting someone constitutes a crime on reputation (libel and abuse) under UAE Federal Law No. 3 of 1987 (as amended) (“the  Penal Code“). Further, there is a limitation period of three months running from the time of the commission of the offence if the victim desires to register a criminal case. Accordingly, you should visit your nearest police station where the crime was commissioned and submit a complaint to file a criminal case against the accused for committing the crime of libel, abuse or slander and provide the investigating officer with all the relevant documents and proof to evidence the abuse of the accused. In so far as three months have not passed since the commission of the crime, such a complaint may be accepted subjects to the merits of the case and the discretion of the prosecution.