1) If the drawer signed a cheque and left it blank, then he is legally authorizing the beneficiary to fill it. Whereby in such case the beneficiary can write any amount he desires on it in addition to its due date, without being challenged by the drawer.
2) Bounce cheque crime can take place in one of the following forms: There were not enough funds in the account, the drawer closed his bank account, the drawer issued an order to the bank to not pay the cheque's amount without a legal stands, and the drawer attempted any act that shall make the cheque invalid.
3) In case of companies cheuques the drawer of the cheque remains legally liable for the cheque's validity even after he leaves the company.
4) Lodging a bounce cheque complaint is not limited to 6 month period; such period can be up to 5 years counting from the date the drawer gives the cheque to the beneficiary.
5) In case there were not enough funds in the account to cover the cheque, the beneficiary has the right of submitting a request to the bank in order to pay him the reaming amount in the account as a partial payment.
New Update:
The United Arab Emirates has enacted the
federal degree number 14 of 2020 (Issued on 27 Sep 2020) which has
amended and added new articles to the UAE commercial transaction law
no. 18 of 1993.
The new changes are in force from January 2022 onwards and one of the most
significant changes introduced concerns the limited scope of
criminalization in instances of returned cheques on account of insufficient
funds.
Narrowed Criminality: The new amendments bring in narrowed criminality in
matters concerning cheques. Pursuant to the new changes, only the following
actions will invite criminal action, such as:
- Intentionally falsifying of cheques
- Instances of fraud: This covers circumstances wherein the issuer instructs the respective bank, not the pay the cheque amount, pursuant to clause… the signature on the cheque would be considered as acknowledgement of the debt
- Providing counterfeit cheques
- Withdrawing the account balance before the date of the cheque encashment in order to prevent the cheque from being cleared.
Reference
: Federal degree number 14 of 2020 amending the UAE commercial transaction
law no. 18 of 1993.
Issue Date:
27 Sep 2020
Follow this link to read our latest article on this topic: “What are the
new changes in bounce cheque in the UAE effective 2022?”
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