Bounced Cheque in Pakistan
When a cheque is presented for the payment and the bank refused payment against the cheque because of insufficient funds or it is not in order. dishonestly issuing a cheque is a criminal offence in Pakistan. Section 489-F of the Pakistan Penal Code, 1860 deals with dishonored cheque.The section is read as “Dishonestly issuing a cheque: Whoever dishonestly issues a cheque towards re-payment of a loan or fulfilment of an obligation which is dishonoured on presentation shall be punishable with imprisonment which may extend to three years and with fine unless he can establish, for which the burden of proof shall rest on him, that he had made arrangements with his bank to ensure that the cheque would be honoured and that the bank was at fault in not honouring the cheque.
Bounced Cheque In The United Arab Emirates
One significant change in cheque bounce in UAE punishment mostly is the reduction of jail time. A criminal case can be pursued if any of the following situations occur:
In the United Arab Emirates, bounced cheques is a common challenge occurring in a variety of commercial transactions including business exchanges, bank loans, property rentals and purchases, and personal dealings, and the consequences and penalties can be financially burdensome and daunting.
It is necessary for any individual using cheques in the UAE, especially about how to issue and accept cheques in commercial deals and trasnsactions, and when the cheque is dishonoured due to insufficient funds in the account or wrong signature. It is a criminal offense in United Arab Emirates, Article 663 of Commercial Transaction Law 2022 deals with bounced cheque, The law briefly described the circumstances in which it is determine that the cheque has been bounced
- The cheque is bounced due to insufficient funds.
- The drawer instructs the bank not to cash the cheque prior to the specified day.
- The drawer closes the account/ withdraws the available balance before the due date.
- The cheque is intentionally signed inaccurately.
- The drawer deliberately writes/ signs the cheque incorrectly.
Consequences for Issuing Bounced Cheques
Article 674 of the Commercial Transaction Law states “everyone who endorses or delivers a cheque to another person, knowing it lacks sufficient funds or cannot be drawn, shall be subject to a fine of not less than 10% of the cheque’s value, a minimum of 1,000 Dirhams, and not exceeding the cheque’s value.” .
Bounced cheques can result in criminal charges, including fines and imprisonment, in the UAE.
Under the latest rules, banks are required to make a partial payment to the cheque holder. This has to be done in case the full amount is not available in the account. However, the bank still retains the right to refuse such a payment.
Going Through The Course of Legal Proceedings
When a cheque is considered bounced the bank shall issue a statement mentioning the reason why the cheque has been bounced. These proceedings may take the form of either a criminal case or a civil case in order to recover the due amount.
Filing The Complaint
To initiate legal action for a cheque bounce in UAE, the bearer must formally file a complaint with the police of the relevant sovereign against the drawer. This complaint can be filed through Dubai Police Mobile Application in Dubai or at the police station, usually the drawer has the opportunity to settle in pending amount in given time period by keeping his passport in Guarantee and govt. automatically put a travel ban on the drawer until he or she resolve the issue.
Settlement in the Court
If the settlement is not finalized in the police station, the case would be transferred to court, evidence shall be presented and either the bail shall be initialiated by surrendering the passport or gaurentor passport or settlement of payment would be done by drawer, in case of guilty the drawer must pay fine and imprisonment shall be faced.
According to the latest amendment, fine for a cheque bounce in UAE relies on the amount due.
Cheque Amount
Fine Amount
Less Than AED 50,000
AED 2,000
AED 50,000 – AED 100,000
AED 5,000
AED 100,000 – AED 200,000
AED 10,000
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