Bounced Cheque in Dubai: What are the new regulations?
As compared to other jurisdictions, UAE allows individuals possessing dishonored bank cheques to file a criminal case against the issuer of the cheque. Federal Law Number 3 of 1987 Penal Code by virtue of Article 401 imposes penalties by way of fine, not less than AED 1,000 or imprisonment not less than one month, as the case may be.
Empowerment to register a criminal case against the drawer of the cheque works as a deterrent theory for the beneficiary to obtain the money from the drawer without having to file a civil case. In order to initiate any legal proceedings against the drawer, need a lawyer who can assist you in criminal as well as the civil case. It is always advisable to register a criminal complaint against the drawer for the recovery of the amount along with the civil case. However, it is cumbersome for criminal courts to keep up with such complaints due to the sheer number of cheque bounce cases.
Consequently, UAE being the most proactive country to recognize the very demands of the public has introduced new regulations pertaining to Bounce cheques in Dubai. In striving to reduce the burden from police, public prosecutors, and criminal courts and to increase the gravity of penalties for low- value bounced cheques, the legislators have introduced a procedure to address minor bounced cheque cases swiftly, thereby establishing “one-day” courts. The new regulations have also amended the provisions wherein the punishment for some cheque bounce cases would be detention.
UAE Legislators have introduced a new system to deal with minor cases by setting up one-day courts post the issuance of Law Number 1 of 2017. The concerned courts are incorporated to issue a decision on minor matters within 24 hours. The courts are established within three major Emirates that is Dubai, Abu Dhabi, and Ras Al Khaimah.
One-day Courts aim in facilitating members of the UAE judicial system and to expedite the proceedings for minor cases and to strengthen the laws of the country for a misdemeanor. It will further allow criminal courts to be more focused on heinous crimes in order to punish the accused at the earliest.
Amendment in Criminal Orders
Apart from the establishment of One-Day Courts, the Emirate of Dubai has promulgated new law regarding criminal orders. The said law will allow the Criminal Courts to impose only a fine on simple crimes without any detention and simultaneously leaving room for both the parties to object to the decision within 7 days from the date of the decision. The objection shall be filed before the criminal courts and must follow a similar procedure as that of other criminal cases.
Practically, a cheque bounce case of a maximum of AED 200,000 will be categorized as a simple offence wherein the punishment will be fine not exceeding AED 10,000. Importantly, the Dubai Public Prosecution will be empowered to issue such a decision without referring the matter to criminal court. However, the objection shall be raised only before a criminal court.
The introduction of the new law will though expedite the proceeding for small ventures of individuals holding cheques of an amount less than AED 200,000 but it is predictable that it will no longer have a deterrent effect on the drawers of the cheque as the punishment does not include imprisonment. Nevertheless, the aims of issuing this regulation are as follows:
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