Crime of Issuing a Dishonored Check and Its Penalty

A check is one of the three types of promissory notes listed in the Turkish Commercial Code. The crime of issuing a check without sufficient funds is a criminal offense that is often subject to prosecution and should be taken seriously.

Regulations regarding checks, which are a means of payment, are included in the Check Law numbered 5941. The penalty for issuing a check without sufficient funds is also regulated in Article 5 of Law No. 5941.

Article 5 - (1) A person who causes an "insufficient funds" transaction regarding the check within the statutory presentation period according to the written arrangement date on it, is sentenced to a fine up to one thousand five hundred days for each check upon the complaint of the holder. However, the criminal fine to be imposed cannot be less than the amount of the check that remains insufficient. The court also rules on the ban on issuing checks and opening check accounts; in case of the existence of such ban, the court rules for the continuation of the ban on issuing checks and opening check accounts. During the trial, a ban on issuing checks and opening check accounts is also imposed as a protective measure by the court ex officio. The ban on issuing checks and opening check accounts applies to the check account holder, real or legal persons who issue checks on behalf of this legal person, and management organs and company officials registered in the commercial registry in case of issuing an insufficient funds check on behalf of a capital company. In case of objections to the decisions on the ban on issuing checks and opening check accounts given as a protective measure, the provisions of the first paragraph of Article 353 of the Enforcement and Bankruptcy Law dated 9/6/1932 and numbered 2004 apply. Cases opened for this offense are heard in the enforcement court and the provisions regarding the trial procedure specified in Articles 347, 349, 350, 351, 352, and 353 of the Enforcement and Bankruptcy Law apply. These cases are heard in the court located where the bank branch where the check was presented for collection or the check account was opened, or where the account holder or complainant resides.

(2) According to the first paragraph, the person who is obliged to have sufficient funds in the relevant bank account to cover the check is the check account holder. If the check account holder is a legal entity, the member of the management body who is responsible for managing its financial affairs, or if no such designation has been made, the real person or persons who make up the management body, are responsible for having sufficient funds in the relevant bank account to cover the check. Those who are subject to a ban on check writing and check account opening under the first paragraph cannot serve on the management bodies of capital companies during the term of their prohibition. However, the current membership of those subject to the ban will continue until the end of their term.

(3) A natural person who is the holder of a check account cannot appoint another person as a representative or proxy to issue checks on their behalf. If a check is issued as a representative or proxy of the natural person, the legal and criminal responsibility for this check belongs to the check account holder.

Legal Interest in Crime of Issuing a Dishonored Check

The legal interest protected in crime of issuing a dishonored check includes:

1- Ensuring the reliability of checks as a payment instrument in the eyes of the public, and

2- Safeguarding the property of the check holder.

Legal Elements of Issuing a Dishonored Check

1- In order for the issuance of a dishonored check to be punishable, the check must be presented to the drawee bank within the legal period of presentation. Presentation refers to the submission of the check by the legal holder to the drawee bank for payment. The legal presentation periods are as follows:

If a check is to be paid where it was issued, it must be presented to the drawee within ten days: The place where the check was issued, i.e. the place of issuance indicated on the check, and the place where the drawee bank is located, as indicated on the check, are the same.

If a check is to be paid in a place other than where it was issued, it must be presented to the drawee within one month: The place where the check was issued, i.e. the place of issuance indicated on the check, and the place where the drawee bank is located, as indicated on the check, are different.

If a check issued in a country other than where it will be paid, is to be paid in another country on the same continent, it must be presented within one month, and if it will be paid on a different continent, it must be presented within three months.

2- At the time of presentation, the check's funds must be partially or entirely unavailable, and the absence of funds must be established. This is usually accomplished in practice by the bank writing "insufficient funds" on the check.

The Perpetrator of Issuing a Dishonored Check Crime

The perpetrator of the offense of issuing a bounced check is the person who causes the "insufficient funds" transaction, as clearly stated in the law.

If the check owner is an individual, then the person responsible for keeping the check balance in the bank is the check owner himself/herself. According to Article 5/3 of the Check Law, a real person who owns the check account cannot appoint another person as a representative or agent to issue a check on their behalf.

If the check account holder is a legal entity, the person who is liable to be sentenced to a criminal fine is the member of the management body responsible for managing the financial affairs of the legal entity. If no such determination has been made, the real person or persons who constitute the management body will be responsible for keeping the check balance at the recipient bank.

The Right to Complaint

The crime of causing the endorsement of "dishonored" on a check is a complaint-based offense.

According to the decision of the 19th Criminal Chamber of the Court of Cassation dated 10.05.2018, numbered 2018/3072 E., 2018/5874 K., "the right to complaint in the crime of issuing a dishonored check belongs to the holder who presents the check to the bank for collection and the legitimate holder who owned the check in the valid and lawful previous period before the endorsement of dishonored is made, and who holds the check at the time of endorsement of dishonored."

Therefore, the right to complaint belongs to the person who holds the check and to the legitimate holder who was the holder of the check in the valid and lawful previous period before the endorsement of dishonored, as long as the holder who caused the endorsement of dishonored makes the necessary payment and the person who receives the check is also the holder of the check.

Legal Period for Filing a Complaint

The period for filing a complaint is three months from the date of learning about the offense and in any case, one year from the date the offense was committed. These periods are prescriptive periods.

Competent Courts

The competent courts for the crime of causing a "dishonored" transaction in checks are the criminal enforcement courts.

The competent courts for jurisdiction are the place where the check is presented to the bank for collection, the location of the bank branch where the check account is opened, the residence of the account holder, and the residence of the complainant.

Penalty Amount

If the crime is proven after the trial, a judicial fine of up to one thousand five hundred days is imposed. However, the judicial fine to be given cannot be less than the amount of the dishonored check. Provisions on prepayment, reconciliation, and deferment of judgment cannot be applied for the crime of issuing a dishonored check, and if the judicial fine imposed for this crime is not paid, this fine is directly converted into a prison sentence without a decision on working in a public service.

In case of issuing a dishonored check, the issuer will not only face a judicial fine but also a ban on opening a check account.

Pınar Öksüz

References

1.         Law on Checks No. 5941

2.         Bahtiyar, Law of Negotiable Instruments, Beta Publication, 2021

3.         Öztan, Law of Negotiable Instruments, Yetkin Publication, 25th Edition

4.         Court of Cassation 19th Criminal Division, Case No: 2019/33988 Decision No: 2019/14958

5.         Court of Cassation 19th Criminal Division, Case No: 2018/6510 Decision No: 2018/11325

6.         Court of Cassation 19th Criminal Division, Case No: 2019/35817 Decision No:2020/415