Bounced Or Dud Cheque And Its Legal Consequence In Nigeria
CRIME IN “BOUNCED”/ “DUD” CHEQUES.
A DUD (worthless) CHEQUE popularly known in Nigeria as “bounced cheque” is a cheque issued by a bank customer whose account is in debit or whose credit balance is lower than the amount indicated on the cheque. It is an empty cheque that has no monetary value as no money can pass through it. Therefore a dud cheque paid into a bank account is not only an embarrassment to the payee and bank but also a crime. A bank that is not vigilant can get itself involved in serious accounting and financial problems where it honours dud cheques.
The law cannot be partial, so it has spread protection nets over banks and payee against fraudulent customers (drawers) that offer dud (worthless) cheques. Just the way a bank is obliged to honour valid and regular cheque, so is a drawer duty bound to reasonably draw his cheque with care to avoid aiding forgery. Even an affected payee has a lot of remedies to avoid losing his money and goods for which such dud cheque had been drawn.
DISHONOURED CHEQUES (OFFENCES) ACT, 1977 has remedied the ugly situation, which even Section 149 of the CRIMINAL CODE couldn’t efficiently cripple, due to the limiting diction of the draftsman contrary to the futuristic nature of cheques. Section 1(a) (b) of Dishonoured Cheques Offences Act, 1977 defines the act of offering dud cheques for credit, goods and services as an offence. The definition in the law seems limiting and too narrow. By the definition it is arguable that it is not an offence under Dishonoured Cheques Offences Act, 1977 to issue dud cheque as gift, charity or for goods and services that are yet to be delivered.
On conviction under Dishonoured Cheques Offences Act, 1977; an individual shall be sentenced to imprisonment for 2 years without an option of fine while in the case of a body corporate (Companies, Business and Non-Government Organisations, etc) it shall be sentenced to a fine of not less than N5, 000. A company involved in issuance of dud cheque is liable as a corporate body while its owners and staff by whatever title or description that consented, connived or was negligent in duty is punishable and liable individually.
To successfully prove a dishonoured cheque, there must be a delivery of credit, goods or/and services in favour of a drawer (accountholder) or his agents, a presentation to bank, a communication/marking made by bank on the cheque or on any means showing that there is insufficient fund in accountholder’s account and often times, bank may be summoned to show account statement to establish account deficit on the date of presentation of cheque. In practise, I have noticed that most bank refuse to write on cheques, stamp cheques or even communicate in writing their reason for dishonouring cheques. Often banks may make marks on cheques interpreted as “Drawer’s Attention Is Required” instead of expressly stating that drawer does not have sufficient fund.
Issuance of a dishonoured cheque will not be an offence where the drawer (accountholder) sends a letter/Countermand Order of payment to bank instructing bank not to honour and pay a given cheque before such cheque is presented to the bank. It is also safer to also send a copy of such letter to the beneficiary of the cheque to avoid presentation of such cheque.
An accountholder who issued a dishonoured cheque may not be liable if he can prove to the satisfaction of court that at the time of issuance of the dishonoured cheque that he had reasonable ground to believe and that he did believe that the cheque will be honoured. See, Section 1(3), Dishonoured Cheques Offences Act, 1977. Such reasonable ground may be a reliable expectation of money to cover the value of cheque he issued at the time of issuance of such cheque. The expectation of money must be established for it to clear a criminal likelihood that the accountholder intentionally issued a dud cheque.
Offence of issuance of dishonoured cheque is triable summarily by Sate High Courts across the 36 States of Nigeria and the High Court of Federal Capital Territory. State High Courts have exclusive jurisdiction. See section 3, Dishonoured Cheques Offences Act, 1977. This means that Magistrate Courts and Federal High Courts cannot entertain cases of dishonoured cheque not minding the amount of money involved and status of parties (company or individual).
Now you can make good of your wrongfully dishonoured cheques; relate better with your bankers and deal severely with cheats that offered you dud cheques.
Onyekachi Umah is a private Legal Practitioner with amazing experience in business law, intellectual property, transaction and regulation advisory, corporate, commercial, investment law and energy law as well as litigation and arbitration arising from them. He is a Legal Awareness Expert and also a Certified Arbitrator both in Nigeria and the United Kingdom. He is a member of the Chartered Institute of Arbitrators (UK) and a Certified Conflict Management Practitioner and Negotiator. He is a member of prestigious “Young ICSID” of International Centre for Settlement of Investment Disputes (ICSID), Washington DC. Among other, he has a certificate in Law of Contract from a program of Harvard University, a certificate in International Environmental Negotiation from United Nations Institute for Training and Research, Geneva and recently, a certificate in Conflict Management from United States Institute of Peace, Washington, D.C. He also holds a master of laws degree from University of Jos and he is a doctoral student at the faculty of law, Nassarawa State University.
Onyekachi is the managing partner of a leading law firm; Bezaleel Chambers International. He is the founder and President of a free law awareness platform known as www.LearnNigerianLaws.com that promotes awareness and understanding of rights and laws of Nigeria (#SabiLaw) and offers free daily law tips (#DailyLawTips). Understanding the challenges of Administration of Criminal Justice in Nigeria, he dedicates his daily law tips every Mondays to promoting Criminal Justice (#CriminalJusticeMonday). Recently, he started a new series on Election Laws tagged (#SabiElectionLaws) to increase legal awareness on elections laws, policies and regulations in Nigeria. He is the convener of the Sabi Law Lecture Series (#SabiLawLectureSeries), travelling around Nigeria delivering free law awareness lectures. He also organises and sponsors a quarterly competition, titled "Sabi Law Video Challenge" (#SabiLawVideoChallenge) where Nigerians win money (over $130.00 per winner) for making videos of themselves talking on any law or right as a way to promote law awareness and have fun. To further promote legal awareness among Nigerians across the world, he started a law awareness show titled "Sabi Law With Onyekachi Umah, Esq" (#SabiLawWithOnyekachiUmahEsq) showing on social media platforms via @LearnNigerianLaws.
Mr. Umah has written over Three Hundred (300) free to access articles and materials on law with a desire to enlighten the public. He is also on the board of companies and non government organisations. Among others, he is serving as a member of the Advisory Committee for Law Clinics Partnership for Reforming Pre-trial Detention in Kuje Prison Project funded by the United States Department Bureau for International Narcotics and Law Enforcement. He is member of the Rotary Club of Abuja, Metro (RCAM), District 9125. He has been featured as the Legal Personality of the Week by This Day Newspaper (a leading national newspaper) on its September 11, 2018 edition and was featured on the NigeriaLawyer.com as the Legal Personality of the Week on November 14, 2018. He has won several honours and awards for his innovative legal practise across the world.
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