No one jailed over property cheques

Not a single person has been sent to jail for a bounced property cheque since the setting up of a special Judicial Committee in September 2009.

The special Judicial Committee was established to address issues related to real estate transactions and has since helped to gradually restore confidence in the Dubai realty market, according to Judge Fahd Rashid Al Shamsi, a member of the committee.

The committee strives to promptly reach an amicable settlement while making efforts to preserve the rights of both parties (developers and investors) involved in the dispute, Al Shamsi told Emirates 24|7.

When a dispute comes up for hearing, the committtee considers the current market situation; the due date on the cheques issued by buyers to developers as well as the completion dates given by developers for that particular project, before reaching a settlement.

Al Shamsi said, currently the number of disputes before the committee is just in hundreds and not thousands like what some believe. No one has gone to jail after the committe was set up according to decree No56 of 2009 issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai. In fact, the committee has helped several prisoners jailed for bounced cheques to walk free.

Al Shamsi said when a dispute is referred to the Judicial Committe, it first studies the case and dispatches them to the relevant departments and judicial authorities. The committe takes up only cheque cases and has so far solved 50 per cent of the total disputes that came before the jurisdiction.

Before  the establishment of the committee, buyers were the most affected as they were obliged to issue cheques to developers. However, due to funding crisis, developers would not meet the said deadline but instead rushed to collect the cheques from buyers.

This led to buyers stopping payments, which in turn led to bouncing of cheques and criminal cases.

Al Shamsi said: "The committee has received 500 reports only from Jebel Ali police station since its establishment." This is excluding the reports which is out of the jurisdiction of the committee.

He added the committee is headed by Chancellor Omar Atiq. "The committee holds two meetings (Mondays and Wednesdays) every week, when they consider about 15 to 18 cases per session, averaging about 120 cases per month. Of the cases before the committee, 90 per cent are those referred by prosecutors, courts and police stations. Only 10 per cent are presented from the developer directly to the committee."

At present there are no more than 30 cases per month being referred to the committee.

He said the committee considers the request of a prisoner's release on the same day the case is submitted to them. Detention occurs as cheques are considered by law as a tool to pay the dues, he added.

However, the release of a prisoner also depends on other factors such as his age, assets in the country and the percentage of payment he has already made. Also considered is the developer's credibility and percentage of work completed on the said project. Then the buyer's release date from prison would be decided upon under the guarantee of his post, residence or passport of another guarantor.

Regarding litigation fees, which is a maximum Dh30,000 for one issue, Al Shamsi confirmed the committee, according to its terms of reference, could postpone the payment of fees until the completion of the deal with the parties. And the one against whom the verdict will be issued would be the party to bear the litigation fees.

The committee exercises its jurisdiction after confirmation of the fact that the bounced cheques relate to a dispute between a buyer and real estate developer and not any other commercial transactions. The committee also considers if the developer is worthy to encash the cheque in terms of the work completed on the project.

Then follows the dismissal of the criminal cases arising from bounced cheques.

The committee also, after studying the case in detail, issues directives to buyers to issue new cheques with an amount less than the disputed one considering the work completed or change the maturity date.

Resolution three of the judicial commitee involves referring the bounced cheque cases to the competant judical authourity who would check the contract aginst the accomplished work. It depends on whether the case was referred to the committee by the police, or public prosecution or the developer himself.

If the complaint was referred to by the court, then the committee would report its findings to the court and leave it to the legal authority to make a verdict.

Al Shamsi said: "According to the Court of Cassation, the work of the committee and its jurisdiction is one of the public affairs in relation to property cases." Therefore the police and public prosecutors as well as all relevant departments can refer property cheque disputes to the judicial committee.

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