New Rules On Bounced Cheques In Qatar
Riyaz had newly started a textile showroom in Qatar. He wrote a cheque to the wholesaler who he bought the stock from but forgot to sign it. Due to this reason, his cheque bounced. Riyaz then started wondering what could be the other reasons why cheques bounce.
Why do cheques bounce?
A bounced cheque is a cheque that cannot be processed primarily due to an insufficient amount of money in the account holder’s account. But there are various other reasons as well due to which a cheque may bounce:
When the bank finds a cheque fraudulent, it bounces it.
When the signature is not correct, or the cheque is not signed at all.
The cheque is post-dated or more than six months old.
If the cheques are not correctly signed.
The amount in words is different from the amount in writing.
Riyaz knew that Qatar is a country with low crime rates. Does it have cheque related disputes, though?
Qatar and it’s bounced cheques!
Qatar is a country with low crime rates. However, modest crimes take place there as well. The Qatar courts hear about 20,000 cheque related cases yearly. Of which, bounced cheque cases are highest in number.
According to Hawas Menawer Al Shammari, Lawyer and Co-founder of Al Shammari and Al HajrI Law Firm, most of the cheque related cases are due to the misuse of cheques.
Nowadays, cheques are being used as a guarantee in Qatar; for house rent, loans, etc. while it is considered as a method of payment by the law.
The only way of reducing cheque related disputes are by using cheques in the way they are to be used, i.e., as a tool of payment rather than a guarantee measure.
Riyaz believed that it is necessary to have these cheque related disputes sorted out in order for businesses to run smoothly. He was relieved when new rules for the same were implemented.
New rules on bounced cheques in Qatar
Cheques have the very same status as that of cash. Thus, the Qatari law has provided it with legal protection as enjoyed by actual cash.
Around 70% of the total cases under the Qatar courts are related to bounced cheques. Thirty to one hundred and fifty cases being reported daily!
This rising number of bounced cheque cases compelled the Qatar government to take steps for preventing bounced cheque cases.
The court, by the help and coordination of the concerned authorities, has begun preparing a blacklist of the people who habitually issue cheques without adequate balance in their account and thus have faced several convictions or those who have failed to pay the cheque due amount. In August 2019, the Criminal Courts formed a cooperative mechanism with the Qatar Central Bank to commence the implementation of the procedures set out in Article 604.
Also, the-Court of Misdemeanours have begun implementing a supplementary penalty provided in Article 604 of Law No. 27 of the Trade Law of 2006, which states that if the court convicts someone for cheque related crime, then it may order the withdrawal of his/her cheque book and also prevent him/her from getting a new chequebook for over a year.
This initiative of the government falls hand-in-hand with Article 357 of Qatar Law No. 11 formed in 2004. According to Article 357 of the Penal Code, courts will oblige the convicted person for paying the value of the cheque and the expenses of the beneficiary, without filing a case in civil court.
According to the Penal Code No. 11 ( 2004 ), the crimes related to cheque without balance is punishable under article 357 by imprisonment for a period between 3 months to 3 years and a fine of minimum QR 3,000. The Qatar Court of Misdemeanours has already judged 34,882 cases out of 37,130 cases filed in 2018.
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