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How to resolve a bounced cheque dispute in the UAE

Know your legal rights in the UAE.

Question: I had a bounced cheque case against me when I defaulted on a rental payment. I have cleared the cheque now but my landlord is refusing to return my guarantee cheque that I paid while renting the apartment. I travelled outside of the UAE and now I have been told that my name is blacklisted and I could get arrested the moment I return to the country. I have already paid the due amount and don’t owe a penny. How can I legally resolve this and return to the UAE?

We assume that your landlord has filed a criminal complaint against you for dishonour of a cheque in the emirate of Dubai. Therefore, the provisions of Federal Law No. (3) of 1987 on Issuance of the Penal Code amended by Federal Law No. (34) of 2005 (the 'Penal Law') and the Dubai Law No. (1) of 2017 related to Criminal Order (the 'Dubai Criminal Order Law') are applicable.

It should be noted that a dishonour of cheque is a criminal offence in the UAE. This is in accordance with Article 401 of the Penal Law, which states: “A punishment of confinement shall be inflicted on any person who, in bad faith draws a cheque without no existing or drawable provision, or who, after issuing the cheque, withdraws all or part of the fund to that the balance becomes insufficient to settle the amount of the cheque, who orders the drawee not to pay cheque, or deliberately makes or signs the cheque in such a manner as to prevent it from being paid.

Any person who endorses or delivers to another a cheque payable to bearer, whilst being aware that there are no existing funds covering its value or that it cannot be drawn shall be liable to the same punishment.

The penal action shall lapse if payment is made or waived after the crime has occurred and before it has received a final ruling. If this occurs after the ruling has become final, its execution shall be stayed.”

Based on the aforementioned provision of law, even though the issuer of the cheque is subject to penalties or imprisonment or both, if the cheques are dishonoured, the latter part of the said provision of law states that punishment may be avoided if the amount of the cheque is paid in full to the payee or if the payee of the cheque waives his right to collect the proceedings of the dishonoured cheque.

Further, assuming that the criminal complaint was filed against you by your landlord in the emirate of Dubai for the dishonour of cheque, it may be noted that based on the provisions of the Dubai Criminal Order Law, if the cheque amount is less than Dh200,000, the punishment may be by fine and the fine may vary between Dh2,000 and Dh10,000 depending on the cheque amount.

Therefore, as you are outside the UAE, you may issue a power of attorney to a lawyer (the 'POA holder') in the UAE which should be notarised and legalised in the country where you are currently residing. Thereafter, the same needs to be attested by the Ministry of Foreign Affairs and International Cooperation in the UAE. The POA holder, on your behalf, may approach the Dubai Pubic Prosecution or the police station where the criminal complaint is filed against you by your landlord and present documentary evidence confirming that you have paid all rental amounts due to the landlord and the landlord should not have used the security cheque to file a criminal case against you.

The public prosecutor upon verifying all documents submitted by your POA holder may close the criminal case against you and open a criminal case against your landlord for misusing your cheques and filing a false complaint against you.

Know the law

Any person who endorses or delivers to another a cheque payable to bearer, whilst being aware that there are no existing funds covering its value or that it cannot be drawn shall be liable to punishment.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.