Man ordered to repay Dh2.5 m in bounced cheque case that took 11 years to resolve

Dubai: The Dubai Civil Court of First Instance ruled that a man of Arab nationality must pay another person the sum of Dh2.5 million, the value of an amount he borrowed from him in 2015 to help him pay for goods belonging to his business establishment, after he had issued him a cheque for the same amount. The cheque bounced when presented to the bank due to a difference in the signature and its incompleteness, and the issuer of the cheque was criminally punished with three years imprisonment. Thus, the Civil Court brought back to the forefront a debt dating back more than a decade, stressing that issuing a cheque and delivering it to the beneficiary does not in itself mean the end of the debt or the discharge of the drawer’s liability, as long as payment of its value has not been proven. Specifically, the dispute began in 2015 when the defendant asked the plaintiff to lend him Dh2.5 million, explaining his need for the necessary liquidity to pay for the value of goods. According to what the plaintiff stated before the court, the defendant promised to return the money as soon as he received the goods and disposed of them, so he complied and handed over the required amount. In return, the defendant issued a bank cheque for Dh2.5 million, drawn at a bank from the bank account of the institution he owns, as consideration for the amount he received. However, when the cheque was presented for payment, the transaction did not end as expected, as the cheque was returned from the bank due to a difference in signature and its incompleteness. The dispute did not stop at the cheque, as the plaintiff took criminal action against the defendant, and the incident was referred to the criminal court, which issued a ruling in 2015 to punish him with imprisonment for three years. Then the criminal case was dismissed due to the statute of limitations, while the original amount remained subject to a claim by the plaintiff, who returned years later to the civil judiciary to claim the value of the debt. The plaintiff filed his lawsuit this year, requesting that the defendant be obligated to pay Dh2.5 million, in addition to legal interest at a rate of 5% from the due date until full payment. The plaintiff submitted several documents to the court, including a copy of the sole proprietorship license owned by the defendant, a copy of the cheque, the bank's statement regarding its return, as well as a certificate stating that the criminal case had expired due to the statute of limitations. The defendant did not appear before the case management office despite being legally notified, nor did he present to the court any proof of payment of the amount or anything that would invalidate the documents submitted by the plaintiff. In examining the origin of the debt, the court considered the nature of the cheque, and whether merely issuing and delivering it was sufficient to extinguish the debt or prove payment of it. The court affirmed that a cheque is, by its very nature, an instrument of payment, and that it is based on a legitimate and valid reason for the obligation to pay its value to the beneficiary. Therefore, merely issuing and delivering the cheque does not mean that the drawer is absolved of its value, unless it is proven that the beneficiary has actually received the amount. The court pointed out that whoever maintains that the cheque had no legitimate reason, or that it was issued as a guarantee, or that the original debt was paid, bears the burden of proving that, as he is claiming something contrary to the truth. Applying this rule to the dispute, the court found that the papers lacked any evidence proving that the cheque was issued without a legitimate reason, or that the plaintiff breached his obligations in the relationship that gave rise to the cheque, and they also lacked any evidence that the defendant had paid the amount, in whole or in part. Accordingly, the court found that the documents submitted, along with the defendant’s failure to provide any defence or evidence of payment, were sufficient to prove that the debt remained with him. The court concluded by obligating the defendant to pay the plaintiff Dh2.5 million, the value of the cheque, with legal interest of 5% per annum from the year it was issued until full payment, in addition to the court fees and expenses and an amount of Dh1,000 for attorney fees.