Dubai court orders man to repay Dh2.5 million loan from 2015 after his cheque bounced

Dubai: The Dubai Civil Court of First Instance ruled that an Arab national must pay another person the sum of 2.5 million, the value of a debt dating back about 11 years, after it was proven to the court that he received the sum and issued a bad cheque that bounced due to a difference in the signature and its incompleteness. The court relied on a criminal ruling of conviction issued against the defendant, and the court punished him with three years imprisonment. The details of the case date back to 2015, when the defendant asked the plaintiff to lend him Dh2.5 million, to be used to pay for goods belonging to the institution he owns. He promised to return the amount as soon as he received and disposed of the goods. Based on mutual business relations between them, the plaintiff lent him the amount, while the defendant issued him a cheque for the same value drawn on the account of the institution he owns. However, the cheque bounced when presented to the bank due to the signature not matching and its incompleteness. The plaintiff filed a criminal complaint against the defendant at the time, which led to his being referred to court and a verdict being issued convicting him and sentencing him to three years imprisonment, before the criminal case was dismissed due to the statute of limitations. In the absence of his money being recovered, the plaintiff filed a civil lawsuit demanding that the defendant be obligated to pay the principal amount and legal interest, based on the cheque and the bank’s statement of its return, as well as the documents of the criminal case and the certificate of its expiry by prescription. The court affirmed in its ruling that a cheque, by its very nature, is a payment instrument based on a legitimate and valid reason for the obligation to pay its value, and it inherently contains the reason for its issuance even if that reason is not stated in it, as it is assumed that it was issued in payment of a debt due to the beneficiary. It explained that anyone claiming otherwise bears the burden of proving their claim, whether by arguing that the cheque was not based on a legitimate reason, that it was issued as a guarantee, that the beneficiary breached their obligations arising from the original relationship, or that the debt has already been settled. The court based its reasoning on rulings by the Dubai Court of Cassation, which stipulated that merely issuing a cheque and delivering it to the beneficiary does not, in itself, prove the drawer's discharge of liability or payment of its value, unless evidence is provided that the beneficiary has actually received the amount. It pointed out that the documents lacked any evidence proving the illegality of the reason for the cheque or the plaintiff's breach of his obligations. The defendant also did not provide any evidence of paying any part of the debt, especially since he did not appear before the court, despite being legally notified, and he did not present a defence that undermines the submitted documents. Accordingly, the court ruled that the defendant must pay the plaintiff the sum of Dh2.5 million, plus legal interest at a rate of 5% from the date the debt became due until full payment, in addition to the court fees and expenses.