Criminal Offense of Dishonored Bank Cheque in Iran

Criminal Offense of Dishonored Bank Cheque in Iran

Criminal offense of dishonored bank Cheque in Iran represents common category of bad Cheque, hot Cheque, and bouncing Cheque. You are probably familiar with these terms as they refer to a Cheque that could not be cleared due to insufficient funds in the drawer bank account or a few other reasons. The offense may be regarded trivial or a major crime like fraud in a variety of jurisdictions dependent on the different circumstances. But in Iran, the law considers issuing a Cheque incapable of being cleared a crime that could happen without malice or even criminal recklessness. The crime is punishable by up to two-year imprisonment and the whole process of prosecution and punishment will be stopped once the debtor paid the Cheque amount plus damages or the plaintiff withdrew the complaint. In the following text boxes, we discuss pivotal takeaways in this field.

 

Criminal Causes of Dishonored Bank Cheque in Iran

Generally speaking, there are five causes that may turn a failure to honor a bank Cheque into a criminal offense. Bouncing Cheque are the most frequent example, but there are some other causes that may also be considered a crime in the context of Cheque transactions. The five causes are:

1. insufficient funds in the balance account at the time specified in the Cheque date box or then after;
2. when the drawer or the owner of the bank account order the bank as not to pay a certain Cheque;
3. when the drawer writes the Cheque in a wrong way so the bank could not clear it;
4. non-conformity of the signature on the Cheque paper with the one that is submitted to the bank beforehand; and
5. issuing a Cheque from a closed account.

 

When Dishonored Cheque Are Not Punishable

More often than not, we face situations where the Cheque has been written in a proper manner, but at the same time the law put it outside the criminal scope. Here is an exhaustive list of these exceptional cases:

1. when it’s been proved that the Cheque had been handed down blank signed in the first place;
2. when the Cheque has been issued subject to a condition;
3. when the Cheque has been issued merely for the purpose of ensuring a transaction;
4. when it’s been proved that the Cheque had been issued without maturity date or the real date of issue is before the specified date on the Cheque paper.

 

Who Can Sue the Drawer of a Bad Cheque?

Cheque as a negotiable instrument is supposed to be used as an instant means of payment. For the matter of criminal analysis, it implies that only the one who first presented the instrument to the bank is on the position to sue the drawer for issuing a bad Cheque. So, after the bank bounced the Cheque, it still could be transferred, but the transferee is not entitled to sue the drawer.

 

Time Table for Suing the Drawer of a Bad Cheque

There are two deadlines concerning the time limit of suing the drawer of a dishonored bank Cheque. beyond these limits, the Cheque has no longer a criminal implication, but still is capable of civil judicial procedure. These time limits are:

1. the holder must submit the Cheque to the bank no later than six months after the date of the issue of the instrument;
2. the holder must sue the drawer no later than the date of issue of the certificate of non-payment by the bank.

 

Is Drawer the Only One That Holds the Criminal Responsibility?

The answer to this question in most cases is YES. But there are rare situations that involve the owner of the bank account who maybe another individual or a representative that acts on her own. The key is who stopped the Cheque. for example, if the drawer writes the Cheque in a wrong way so the bank could not clear it, but the owner of the account already had ordered the bank not to pay, the drawer is the one who stopped the Cheque and is the sole responsible in case of a criminal action.

 

Criminal Procedure of Cheque Involving a Foreign Factor

If a foreigner in Iran draws a Cheque on a foreign bank, and the latter bounces the Cheque, the crime of issuing a dishonored bank Cheque has occurred. The only evidence needed here is a statement or document or certificate issued by the foreign bank concerning the non-payment of the Cheque. the same is true when a Cheque has been drawn on Iranian banks outside the country and failed to be honored. In both cases, the criminal law of Iran is applicable and Iranian courts are competent to proceed.

 

Competent Courts for Persecution of Criminal Acts of Dishonored Cheque in Iran

Competent courts for legal actions concerning negotiable instrument have been always a tricky issue. In Iran, the jurisdiction where the drawee (bank) is located is the foremost authority to proceed. In addition, the jurisdiction where the bank issued the certificate of non-payment is another key to determine the competent court. If the bank is located outside Iran, the court where the Cheque has been issued has jurisdiction over the case. In a case of multiple actions, the court where the defendant is arrested is competent to hear the claims.

 

Punishments of Issuing a Dishonored Cheque in Iran

There are three categories of punishments which involve a spectrum of three-month to two-year imprisonment. However, the punishments will not apply if it is proved that the Cheque has been issued for illegal transactions. Here come these three categories:

1. if the amount of the Cheque is under 10 million, the criminal will be imprisoned up to six months;
2. if the amount of the Cheque is between 10 million to 50 million, the criminal will be imprisoned from six months to one year;
3. if the amount of the Cheque is more than 50 million, the criminal will be imprisoned from one year to two years and will be incapable of issuing any Cheque for two years.

For all these three categories, in case of issuing multiple dishonored bank Cheque, the accumulated amount of the Cheque will be considered for determining which category should be applied.

 

 

Don’t forget to Cheque out our other article on Iranian bank Cheque procedures in Iran. If you had any questions just give us a call. Iran Best Lawyer are 24/7 available to inform you of most recent laws and regulations in Iran for every and all legal fields.