Cheque case in UAE (Sharjah,Dubai,Ras Al Khaima, Abu Dhabi,Fujeirah)


Under UAE law, bouncing a cheque is a misdemeanour that could be punished by jail or a fine, depending on the nature of the case and the amount.


In the UAE, the cheque bounce is a very frequent problem faced by people during their span in the country. It is covered under the purview of a criminal offence in the UAE, and legal implications/penalties can be financially severe and daunting. Bounced cheque issues may arise in a variety of commercial transactions, including but not limited to, companies’ exchanges, bank loans, property rents or purchases and individual transactions

Bounced cheque complaints and cases can be attributed to several reasons but primarily due to the debtor’s failure of paying the debt to a creditor on a specific date agreed thereon. Under the UAE Federal Law No. (3) of 1987 Promulgating the Penal Code, both criminal, as well as civil proceedings, can be initiated against the perpetrator. Therefore, it is crucial for every individual dealing with cheques in the UAE, specifically those who are not desiring to “intentionally” commit a crime and face the consequences, to know how to issue and accept cheques properly, or how to handle situations when deposited cheques returned unpaid

The Federal Law No. (18) of 1993 Issuing the Commercial Transactions Law regulates issuing and circulation of cheques in the UAE. The Article (483) of the law defines a cheque as “an order issued by a person (the Drawer) to a bank (the Drawee) to pay on the date indicated therein (Date of Issuance), a specific sum of money to the order of a third person (the Payee), being the beneficiary, or the bearer thereof. The cheque issuer shall be aware that according to the law a cheque needs to satisfy the conditions mentioned below. As per the Article (598) of the UAE Commercial Transactions Law, cheques issued and due for payment in the UAE must be drawn on a bank.

What is Bounced Cheque?


A bounced cheque (also known as ‘dishonoured cheque’ or ‘bad cheque’) is a cheque presented by the payee and rejected by the drawee bank when:

  • The bank indicates that the funds available in the account of the drawer at the date of issuance are insufficient to cover the amount mentioned on the cheque, either partially or fully; the cheque is consequently rejected and marked by the bank.

  • The bank receives an order from the issuer to refrain from paying the cheque.

  • The drawer makes or signs the cheque in a manner that prevents it from being paid, like omitting or changing his signature.

  • The drawer's bank account was closed before the issued cheque is presented for payment.


The cheque is a payment instrument contingent to the availability of funds, through the drawee’s acceptance to pay the cheque issued by the drawer. Accordingly, the Article (632) of the UAE Commercial Transactions Law entitles the bearer of a cheque to have recourse against the drawer, endorsers and/or any other parties found liable thereon if the cheque is presented within the prescribed time limit but remained unpaid, and this fact is established by protest.

In lieu of the protest, failure to pay may be established by a statement from the drawee bank. Refrainment from paying a cheque shall be established before the expiry of the time-limit prescribed for presentment.

A cheque is due for payment on the date stated thereon as the date of issue. It may not be presented for payment before such date (Article (617)) and shall be presented for payment within a time-limit of six months from the date stated on the cheque as the date of issue (Article (618)). 

It is important to note that the drawer shall provide the consideration for payment on the date of issue and such consideration shall continue to exist with the drawee until the expiry of the time-limit for presentment of the cheque. Otherwise, the Article (634) grants the bearer the right to have recourse against the drawer, even when the former fails to present the cheque to the drawee bank, make a protest, or take a similar action within the prescribed time limit. 

The Limitation Period

The Article (638) states that the actions of recourse initiated by the cheque bearer against the drawer, endorsers and other obligors for the payment of its value, will not be heard after a period of two years from the expiry of the time-limit set for presentment thereof. 

In case a lawsuit is initiated, this time limitation shall only apply from the day of the last action taken thereon. In addition, such time limitation shall not run if the debt is adjudicated or when it is acknowledged by a separate deed resulting in the renewal of the debt (Article (640)).

The Course of Legal Proceedings


When a cheque is deemed bounced, failure to pay may be established by a statement from the bank. The bank cannot refuse a request to issue such a statement but may request a grace period not exceeding three working days following the presentment of the cheque to contact the drawer.

The bearer has no legal obligation to resolve the matter with the drawer through direct contact, and may rather initiate legal proceedings. Such proceedings may take the course of a criminal or a civil case.

Criminal Case Proceedings


I. The Police Complaint

In order to file a case for a bounced cheque, the bearer of the cheque must formally lodge a complaint with the police of the respective emirate against the drawer. In Dubai, such complaint may be filed through the Dubai Police mobile application.After receiving the complaint, the police should contact the issuer of the cheque to notify him of the same and request his presence. At the police station, the drawer is allowed to settle the issue through paying the amount of the bounced cheque. In that case, no further legal proceedings will be taken.

The issuer of the bounced cheque has the right to request some time to settle the issue. Upon such request, the issuer may be granted a reasonable period secured by the deposit of his passport at the police station. However, it highly depends on the cheque’s amount as in many cases such guarantee of depositing the passport is rejected by police officers if the amount drawn on the cheque is high (AED 1 Million and above).

Since the bounced cheque is a criminal offence in the UAE, upon filing the complaint at the police station, a travel ban/arrest warrant on the drawer will be issued automatically. Hence, the issuer of the cheque will be banned from leaving the country and arrested if he tries to escape, or will be detained on arrival if he enters the UAE from outside. Such ban/warrant can be removed only upon settlement of the bounced cheque issue, or after serving a sentence.

II. The Public Prosecution

In case the opponents failed to resolve the bounced cheque dispute at the police station, the police then transfers the complaint to the public prosecution in the court, to further conduct its investigations. Thereafter, the public prosecution makes decisions in the case upon hearing the opponents.

Based on the evidence presented in the court, the decision could be a bail either by paying the value of the bounced cheque or by depositing the passport of the defaulter or another guarantor. In case bail was denied, the public prosecutor may order the detention of the drawer until the court hears and decides on the case.

III. The Criminal Court

The role of the criminal court is to dive deeper into the case details, opponents’ arguments, and available evidence. The court then proceeds to examine whether the crime elements are satisfied or not. The crime elements are the material element and the mental element.The material element (Actus Reus) means that the perpetrator had physically committed an act which is considered a crime by law. Examples on that can be many, like failing to provide the amount of money or withdrawing it from the issuer’s account after the cheque’s date of issuance, or making mistakes with the name, amount, and/or signature in the cheque.

Such acts shall not constitute a crime without the coexistence of material element and mental element (Mens Rea). The mental element means the perpetrator’s intention to bring financial damages to the complainant.Once both of the crime elements are satisfied, and by the authority vested in it in the Article (401) of the UAE Penal Code, the court may decide the sanction of the perpetrator. This can be confined to a fine assessed solely by the court, based on the conclusion reached and the amount claimed and usually ranging between AED 1,000 and AED 30,000, or more. The court may also decide the sanction of the perpetrator to be serving jail time of between one year and three years.

    Civil Case Proceedings


The criminal court and the civil court function separately. Hence, the sentence issued by the criminal court comes only as a sanction for the act of issuing a cheque in bad faith without sufficient funds or withdrawal all or part of the funds after giving the cheque, so that the remaining balance is insufficient to cover the amount of the cheque.

Nevertheless, the court conducting the criminal trial may transfer the civil claim to the civil court for determination. The claimant may present his case to the civil court as well to claim his right to the disputed amount.

The civil court may be any competent judicial authority other than the courts. For example, in Dubai, the Rent Disputes Settlement Center (also known as Rental Committee) is a competent authority carrying out settlement of all rental disputes arising between property landlords and tenants in the emirate.

After reaching a conclusion based on the evidence and facts presented by the opponents, the civil court can then demand the issuer of the bounced cheque to pay a sum equal either to the value of the cheque or its outstanding balance. In case the perpetrator fails to pay the said amount, his assets may be attached, and he may be subjected to another jail term for failing to comply with the civil court decision.

If there are no pending cases against the issuer of the bounced cheque, once the jail term is completed, he is free to leave the country after collecting his impounded passport.

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