Online banking is today’s most opted means of transaction. However, some people still prefer transferring money using cheques, which is the most traditional way. In UAE, rent payments are necessary to be in the form of cheques.
When a cheque bounces, a payee has to file within thirty days from the return memo of a bank a legal notice for cheque bounce in UAE. After the filing, the drawer will make the payment. If not, a case will be filed against the drawee or issuer of the bounced cheque in UAE.
Process of Sending a Bounced Cheque Legal Notice in UAE
A civil case for bounced cheques can’t be filed without the proper serving of a legal notice for a bounced cheque in UAE.
Follow these steps to initiate the process of recovering your money:
Step 1: Check if the conditions for sending a legal notice apply
To issue a legal notice and begin the legal recourse for recovering your money from a bounced cheque, you need to check if the conditions listed below are satisfied.
- Legal action is begun within a month from the date the cause of action arose
- The cheque was returned because of insufficient funds
- The cheque was presented by the payee to the bank within six months from its validity
- the cheque was provided by the drawee to the payee for payment of a liability
Step 2: Create the bounced cheque legal notice
This can be done with the help of a public notary in Dubai. Your bounced cheque legal notice has to contain these crucial elements:
- Details of the issuer of the cheque
- Statement of cheque being used for discharge of liability or debt in part or as a whole and not provided as a loan or a gift
- Verification of cheque being claimed within the allowable or validity period
- Return date of the cheque accompanied with the reasons why the bank made the return
- Demand to make payment through the issuance of another cheque and time limit
- Consequence for non-payment of liability within reasonable time stipulated in the legal notice
Note: there’s no established format in UAE for legal notices. However, a legal notice for a bounced cheque has to be relevant and contain a demand for a payment within a stipulated time frame. The demand also has to be accompanied with legal consequences for the drawee should the legal notice still doesn’t result to a payment for the pending amount.
Step 3: Serve the Legal Notice for cheque dishonour
A legal notice for a cheque bounce in UAE should be delivered personally to the recipient. If the accused doesn’t make the payment within the prescribed period, a complaint can be filed with the Dubai Court or court that’s mentioned in an existing contract with the drawee.
You should know: Legal Notice For Recovery Of Money
Why Checks Bounce in UAE?
There are several reasons as to why a cheque may bounce in UAE other than insufficient funds. It does not necessarily mean that a drawee is making an attempt at skipping a payment for a debt or liability. When a cheque bounces, the bank will provide a reason to the payee.
Some of the common reasons why cheques are dishonored are:
- Irregular signature – people nowadays make use of digital banking. Cheques are some of the few left for financial instruments that rely on signatures. Banks in UAE won’t accept cheques when signatures of issues don’t tally with exemplar signatures that are available to them.
- Issue with date of cheque – the date that is on a cheque holds significance as any problem or difference can lead to dishonoring or disapproval. It’s a vital detail and thus it can’t be taken lightly. The date may also be illegible, disfigured, or has errors with the scribbling.
- Difference in amount and words – if the amount is incorrect as there is difference in numbers and words, then the cheque will bounce and it won’t be approved by the bank.
Importance of Sending a Legal Notice
You may be confused as to whether you should create and send a legal notice for a bounced cheque in UAE, most especially when you personally know the drawee. A legal notice for bounced cheques will only prove to be necessary when you want to start the journey of litigation. This when you’ve found there is no other way in resolving the matter.
A legal notice will allow you to:
- Give the person/organization liable to you an idea of your intention to file a complaint or lawsuit to resolve the issue of non-payment to which the drawee should respond immediately in order to save oneself or the business from court proceedings
- Provide the receiver of the bounced cheque legal notice the opportunity in resolving the matter cordially
- Describe your grievance in a legal way that will be upheld in court
To know more about bounced cheques and filing of legal notices in UAE, call us here in Notary Public Dubai today!