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Dishonouring a cheque is a criminal offence

July 10, 2013 By LegalSolutions.in 1 Comment

We had a car repairing garage in Sharjah. But when my father returned to India for a long time due to some work and I could not handle the business. Rent cheques for the garage were issued from my father’s personal account to the landlord. As soon as I realised we could not pay, so I vacated the place. I was cleared from the case, but the landlord filed a police case against the cheque issued by my father. Unfortunately, the landlord expired recently. What happens to the case against me?

Dishonour of a cheque is a criminal offence punishable with detention or fine in accordance with Article (401) of the Federal Law No 3 of 1987 on the Issuance of Penal Code, which states: “Detention or a fine shall be imposed upon anyone who, in bad faith, gives a draft (cheque) without a sufficient and drawable balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque, or if he orders a drawee not to cash a cheque or makes or signs the cheque in a manner that prevents it from being cashed.

The same penalty shall apply to any one who endorses a cheque in favour of another or gives him a bearer draft, knowing that there is no sufficient balance to honor the cheque or that it is not drawable.”

It is assumed that you are not a signatory to the cheques issued to the landlord. Therefore you shall not have any criminal liability on the cheques signed and issued by your father to the landlord. The criminal case filed by the landlord against your father will not go away due to the demise of the landlord. Should your father return to the UAE, he will have to deal with the consequences of this criminal case filed by the deceased landlord against him.

more @ http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=data/legalview/2013/July/legalview_July2.xml&section=legalview

Filed Under: Law, UAE

Central Bank of UAE to introduce the Direct Debit System

April 11, 2013 By LegalSolutions.in Leave a Comment

The Central Bank of UAE has announced the introduction of the ‘Direct Debit System’ in the UAE with effect from 15th June 2013.

It added that the implementation of Direct Debit will enable customers to make regular, automatic payments from their bank accounts towards mortgage loans or credit card payments or personal loan installments.

“The facility is designed to eliminate the need to sign several post-dated cheques for installments upon obtaining a loan/finance, allowing banks to reduce their reliance on post-dated cheques. The benefit for account holders is that they can plan their expenses more efficiently,” the bank said .

more: http://www.globalpost.com/dispatch/news/asianet/130409/central-bank-uae-introduce-the-direct-debit-system

Filed Under: News, UAE

UAE banks say cheque technology ‘not at fault’ for high failure rate

March 7, 2013 By LegalSolutions.in Leave a Comment

The high failure rate of cheques in the country is not the fault of the cheques themselves, say banks and ATM vendors. Nor is the UAE’s clearing infrastructure to blame.

Manufacturers of ATMs say that there are no technical reasons that cause more cheques to fail in the Emirates than other markets where the same technology is used and that recent improvements have made cheque use almost foolproof.

NCR, the world’s biggest vendor of ATMs by market value and a major manufacturer of cheque-counting devices used in the Emirates, said its cheque-acceptance systems were robust and there were no specific technological challenges causing cheques to fail.

“NCR specifically does not face any technical issues with cheque deposits on its ATMs,” a spokesman for the company said. A total of 1.4 million cheques were returned as invalid at the point of use last year, representing payments worth Dh46.8 billion (US$12.74bn), according to the Central Bank.

The proportion returned as invalid – about one in every 20 cheques – is nearly 10 times higher than in developed markets such as the United Kingdom.
The Central Bank does not distinguish in its data between cheques that fail for technical reasons and those that bounce.

Bouncing a cheque in the UAE is a criminal offence, although Emiratis have been immunised from being sent to jail for bounced security cheques. Customers whose cheques fail four times are cut off from the financial system, which can impair banks’ ability to recover funds if customers have debts spread across multiple lenders.

Read more: http://www.thenational.ae/thenationalconversation/industry-insights/finance/uae-banks-say-cheque-technology-not-at-fault-for-high-failure-rate#ixzz2PIDTjwtq

Filed Under: News, UAE

UAE relaxes penalties in cheque bounce cases

January 2, 2013 By LegalSolutions.in Leave a Comment

The UAE will stop imprisoning expatriates for writing cheques that bounce, Abu Dhabi daily The National reported on Tuesday, citing a senior official.

The UAE’s tough penalties for defaulting on loans, which is a criminal offence in the Gulf monarchy, were relaxed for Emirati citizens in October after a royal decree.

“In line with the directives of Sheikh Khalifa… and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters,” Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs was quoted saying.

more @ http://www.tradearabia.com/news/LAW_228240.html

Filed Under: News, UAE

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