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Introduction:
A cheque is a written, dated, and signed document that instructs a bank to pay the bearer a certain quantity of money. The individual or entity that writes the cheque is referred to as the payor or drawer, while the individual to whom the cheque is made is referred to as the payee. On the other side, the drawee is the bank on which the cheque is drawn. Cheques may be deposited or cashed. When a payee delivers a cheque to a bank or other financial institution, money is deducted from the payor’s bank account. It is another method of instructing the bank to transfer payments from the payor’s account to the payee’s account. In principal, the cheque is a tool of payment and is not an instrument of credit which is considered as money and replaces it when settling obligations. However, people are misusing cheques and are using it as an instrument of credit (guarantee) for several purposes such as house rents or loans which leads to “bounced cheques”. A bounced cheque is a cheque that was presented for payment but could not be completed due to the cheque writer’s insufficient money to cover the payment. When a cheque writer’s account does not have sufficient amount of money, his or her bank will reject the payment request and return the cheque to the payee’s bank. Rather of paying money to the recipient, the payment request “bounces.” Qatari Courts are suffering from the huge number of cheques related cases due to such misuse and behavior. Therefore, new regulations were introduced lately in a try to cure this misbehavior.
Bounced cheque case procedures in Qatar:
If the cheque is returned due to insufficient cash, the payer may face punishment under Qatari law. The payee holding returned cheques can contact the prosecution’s cheques cases division for the purpose of prosecuting the payer. However, if the payer made the payment at any time after the bank returned the cheque and after the payee has filed a cheque case, the payment of the cheque amount alone does not absolve the payer of criminal assaults. The payer must notify the court of the payment and the defendant must make a motion for withdrawal of prosecution. Otherwise, the Court procedures will be resumed in the absence of knowledge of the parties’ settlement. Not settling the conflict relevant to the bounced cheque will lead to both civil and criminal consequences on the payer.
New Measures:
Firstly, the court, with the assistance and cooperation of the relevant authorities, has begun compiling a blacklist of those who routinely write cheques without an acceptable balance in their account and have therefore faced many convictions, as well as those who have failed to pay the cheque due amount. The Criminal Courts established a cooperation mechanism with the Qatar Central Bank to begin implementing the Article 604 of Law No. 27 of the 2006 Trade Law processes. Additionally, the Court has begun enforcing a supplementary penalty outlined in Article 604 of Law No. 27 of the 2006 Trade Law, which states that if a person is convicted of a cheque-related crime, the court may order the withdrawal of his or her cheque book and prohibit him or her from obtaining a new cheque book for a period of one year.
The Penal Code:
According to Article 357 of the Penal Code, courts will obligate the guilty person to pay the value of the cheque and the beneficiary’s expenditures without requiring the convicted person to file a civil lawsuit. Moreover, offences involving cheques without balance are punished by imprisonment for a term of three months to three years and a fine of at least QR 3,000.
Further discussion in relation with the capability of payees to use the cheques as a proof for their debts and rights in confrontation of their payers will be introduced in our coming Articles. For further Information about cheques regulations in Qatar, don’t hesitate to contact any of our Professionals at Alhababi Law Firm.
Author: ‘Mohammad Mufid’ Ratib Qurashi