Question:
My bank filed a criminal case against me for a bounced cheque in Dubai. The case is finished as I paid the fine in the court. At this stage, can bank take any further legal action against me even after receiving the claim from insurance company?
Answer:
Article 401 of Federal Law Number 3 of 1987, UAE Penal Code penalizes anyone who issues a cheque with insufficient balance. The provision is as follows:
Detention or a fine shall be imposed on anyone who, in bad faith, gives a draft (cheque) without sufficient and drawable balance or who, after giving the cheque, withdraws all or any part of the balance, making the balance insufficient for the settlement of the cheque, or if he orders a drawee not to encash the cheque or makes or signs the cheque in a manner that prevents it from being encashed.
The same penalty shall apply to anyone who endorses a cheque in favor of another or gives him a bearer draft, knowing that there is no sufficient balance to honors the cheque or that is not drawable.
It is an offense against the signatory of the cheque and a complaint can be raised against the signatory by the beneficiary of the cheque. In this regards, the court decides the quantum of the punishment depending upon the gravity of the offense, along with a travel ban until the criminal case is registered in the court.
Apart from the foregoing, the bank is empowered to register a civil suit against you for claiming the cheque amount along with the damages caused to the bank, relying on Article 644 of the Federal Law Number 18 of 1993 regarding the Commercial Transactions Law, which provides that:
if a penal action in any of the cheque-related crimes provided in the law of penalties have been filed against the drawer, the holder of the cheque the holder of the cheque who claims the civil right may sue the drawer for obtaining an equivalent amount to that of the cheque or to the extent of the unpaid amount of its value, apart from the compensation, when necessary.
In furtherance to above, the bank has complete authority to file a civil claim against you for seeking the damages and no law grants immunity to the drawer under an insurance policy.
