Q: My friend and his business partner agreed to put up a business. My friend share is to rent the place and give some amount of money. My friend issued bank checks… A: Any action in which a person stops payment of the cheque is seen as a crime and the signatory of the cheque will be charged with…

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Is it a crime to stop payment of a cheque?

Good day. My friend and his business partner agreed to put up a business. Then they agreed to have a share to pay. My friend share is to rent the place and give some amount of money. My friend issued bank checks in place of cash. When they get the business permit my friend's business partner did not include my friend's name in the business. So, what my friend did, he asked the bank to stop payment for the business.

My question: is my friend liable for the bouncing check because he stopped the bank for the payment?

Nikhat Sardar Khan

Kochhar & Co Inc. Legal Consultants (Dubai Branch)

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22 Mar 2017, 08:50

Both are separate disputes. If your ex-partner promised you something and he didn't deliver, then your action lies with him alone. But if you sign a cheque in favor of a beneficiary then the privity of contract is between you and the beneficiary alone and he has nothing to do with your partner and the shareholding structure you were promised.

Any action in which a person stops payment of the cheque is seen as a crime and the signatory of the cheque will be charged with criminal proceedings.

With best regards,

Mrs. Khan

22 Mar 2017, 10:07

Dear Mrs. Khan,

The dispute is that the partnership did not push true, that's why my friend stopped cheque for the payment for the deal that they will put up a business partnership.

22 Mar 2017, 12:19

If the cheque (which was stopped for payment) was signed and handed over for a legitimate transaction, and eventually if the transaction was not completed for any reason whatsoever, and in the meantime, the cheque was presented for payment and the signatory stopped the payment, the signatory shall be subject to criminal proceedings.

The non-completion of the transaction could be considered in the civil case, but the same will not be a defense to the criminal prosecution (for a bounced cheque/cheque stopped for payment). The background of the transaction is not material and the same is not sufficient to stop a criminal proceeding or to acquit the signatory of the cheque.

With best regards,

Mrs. Khan

26 Mar 2017, 07:50

Mrs. Khan, thank you very much for your great help.

Is there any remedy on what to do so that my friend will be acquitted for the signatory of the cheque. Because she will be paying the check without benefit.

26 Mar 2017, 08:15

The cheque has to be honoured. Thereafter you friend will have to sue the business partner for recovery of all the payments made.

With best regards,

Mrs. Khan

26 Mar 2017, 08:19

Mrs. Khan, can you clarify the sentence "the cheque has to be honored".

26 Mar 2017, 08:22

The cheque has to be honoured (means when it is due for payment it should be paid). Thereafter your friend will have to sue the business partner for recovery of all the payments made.

With best regards,

Mrs. Khan

26 Mar 2017, 08:31

A great help from you, Mrs. Khan.

My friend is in the jail for this case. And I will tell him to pay all the cheques, then after he will sue for the recovery of the payments made by him.

Mrs. Khan, what case would he file in the court?

26 Mar 2017, 08:35

You need to take all the documents and evidence and consult an ADVOCATE firm who would advise your friend for both criminal and civil case. This criminal case will be the main evidence.

With best regards,

Mrs. Khan

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