Wednesday, August 20, 2008

Got a Bounced Cheque?

Salam,

Ever come across receiving a payment by cheque and when you try to bank in the cheque, it bounced? How do you feel? What could you do? You are angry, that is obvious!

Well, not many businessman or public know that if you receive a cheque being your payment for whatever reason, and when you present it to the bank it dishonored, you may (alternatively, beside go back to the drawer, and start shouting..hehe) sue the drawer in court and the chances of wining is very high.

Section 47 of Malaysian Bill of Exchange Act, provides a simple locus standi for you to sue the drawer without having to proof further or the reason behind the transaction. Just present you claim stating that you have received a cheque by so and so, and it has been dishonored. Simple, isn't it?

Well, start exercising your rights…good luck.

Regards,

Kamarul Irzuan Bin Busu Piah, Advocate & Solicitor, High Court of Malaya, Malaysia.

19 comments:

  1. Thanks for sharing the good info. Never knew that there is such a rule. Keep em coming :)

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  2. I am a foreigner who was interested in forming a company in Malaysia to conduct a business. With this in mind i discussed this idea with a friend of mine who is an Indian origin Malaysian. he agreed to become a partner and he was given 51% share of the company. He helped me to register the company throgh his connections in Malaysia. As per his request i sent RM7000 for the company registration but so far he did not produce any receipt for that. During the process of registration he demanded me to send him an additional RM50000 as the part of paid up capital of the total RM100000 declaired as the paid up capital of the company. I sent cash to him and asked him to open an account with the bank and depeosit the money. But till today ( now almost 4months) he has not opened the account. As i found that he was cheating, i asked him to return back my RM50000. With a lot of struggle he gave me two posted dated cheques on RM20000 dated as 31st January 2008 and RM25000 dated as 15th February 2009. He has deducted RM5000 from it saying that it is the expenses he incurred during the process of registration. I have now deposited the first cheque on 2nd February 2009 and it has gone for clearance. My questain is what is the banking rule if a cheque is bounced or dis-honored. And what legal action can be taken against such criminals. The procedure that has to be followed and the penalty according to Malaysian Law.

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  3. Thank you for your comment. As I mentioned in this post -establishing locus standi (ground to start legal action) is simple in a case of dishonored cheque. In the event that your cheque is bounced you may file a civil claim against the drawer (your 'supposed-to-be' partner) in any a magistrate court or session court (wherever if applicable).

    A civil claim may be institute by yourself or by any appointed lawyer at your choice.

    At the same time you may also (simultaneously) lodge a police report against him if you strongly believe that he had committed an illegal act deceiving you or tryinng to cheat you.

    good luck.

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  4. What if the Issuer of the Cheque chose to cancel the Cheque? Does it amount to dishonoured cheque under the purview of the Section 47 of Malaysian Bill of Exchange Act?

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  5. Just received a bounced cheque from a lawyer, after some facts findings, reason for bounce is due to signature different. Can the above suggestion applied?

    After calling and informing the the drawer, a lot of excuses. In facts, the law firms is still holding my money (selling of house) for more than 3 week since the bank releases the money.

    1. Any law stating how long can they hold your money?

    2. Shall I make a police report, followed by report to bar council and engage another lawyer to pursue on my behalf ie courtesy call and demand letter on my behalf?

    Apprec some help.

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  6. I intend to open a office in malaysia and market rice distribution in the super markets, restaurants and stores. if i ask the buyer to pay me by cheque, is it safe? if the cheque is dishonoured, how long will it take me to get the payment through court of law?

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  7. i am a foreigner in malaysia.one of my country man has given me a cheque instead of money received by hand.now according his statements his account has not sufficient money.i would like to know how much a cheque is powerful?or i need to recourse other way?
    thank you
    hossein

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  8. Hi,

    Thanz for the info!

    Does this cover if the drawer willfully stop the cheque for whatsoever reasons?

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  9. Hi,
    I have just received a dishonoured cheque from my client. I have been having difficulties claiming my outstanding payments for a few weeks now, and to date no other payment has been issued other than the dishonoured cheque. What should I do to get all of the outstanding bills settled?

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  10. 1.
    Pursuant to Bill of Exchange Act, issuing a dishonoured cheque is a prima facie ground for you to take legal action against the issuer of the cheque.

    2.
    We can help you to proceed with the legal action, to recover the said amount of money

    3.
    Feel free to query me more at khairul.aiman2@gmail.com

    Sincerely,
    Khairul Aiman

    Messrs. Irzuan

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  11. hi, do we need to keep a photocopy of the cheque before we deposit it to the bank?

    because the cheque deposit machine receipt usually is quite blur and not clear enough for later use.
    thanks.

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  12. Anonymous, it is better for you to have a photocopy of the cheque as a back up so that you can use it if you intend to file a suit in the court.

    Sincerely,
    Khairul Aiman

    Messrs. Irzuan

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  13. Bought a mattress and a bed frame made to our desired height at one of Malaysia's large exhibition and paid more than 50% deposit. The supplier indicated that their products are of high quality made for export. But when they delivered the bed frame and the mattress; the frame was of wrong specs with visible nails protruding under the cover and dents from large chip and the height was wrong; they tried to fix the problem at our home and when they took off the cover of the frame; we saw that the wood was rotten moldy and old. We wrote in a strong complaint letter and they redo a new frame; after that we paid the balance; but stopped payment when we found that the mattress emits strong moldy smell after we removed the plastic cover. We felt cheated and misled by their irresponsible action and we are trying to recover our deposit. They agreed to take back the mattress and they want us to keep the frame and apply the deposit to the frame which we disagreed. We are fed up of complaining and we just want our deposit back so that we could buy a new bed; the bed was ordered in June; and their irresponssible behavior has delayed everything till now and we still do not have a bed to rest on after 2 months. Can we recover our deposits and is it wrong for us to stop payment on the balance? We have asked them to return our full deposit and we will return all their products or let us keep the frame for RM800 which we were told that the price of the frame was RM800 at the exhibition and return the balance of the deposit to us.

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  14. i have issued a cheque on behalf of a friend with the promise from the friend that he will bank in the money before the due date (post-dated cheque). He failed to bank in the money and i have to stop payment. Am i wrong in doing so?

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  15. Hello Mr Kamarul,i am not a law student but also need to take subject on law. May I ask what is the name of Act that is specificly on cheque? And i do not know what are the cases that relates on crossing on a cheque.. I will be very grateful if you can help me.
    -Veronica Alexander Jok-
    Engineering student

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  16. dear anonymous, based on your comments on August 19, 2011 you do have right as consumer to get a replacement or refund and we would like to advise you to lodge formal complaint to National Consumer Complaints Centre about this matter because most of cases like these solved with the help of NCCC but bear in mind that NCCC is an NGO that helps solve your problem by sending your complaints to the respondent. give a try. sorry for the late reply..

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  17. dear veronica, the law is BILLS OF EXCHANGE
    ACT 1949. sorry for late reply. thanks for viewing our blog.

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  18. Hi appreciate your help. My company's shareholder who is not a director but made the sole signatory of the company's bank account issued 3 bounced checks! Can we sue him or will the directors be in trouble? Thks in advance . Mr Tan

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  19. Dear author,
    currently i have a case, want to sue bank , bank failed to provide reasonable service according to rules and regulations, and marked me bounced checks. is it possible?

    ReplyDelete