Middle East: The Crime of Drawing Worthless Cheques
| Date | 01 April 1996 |
| DOI | https://doi.org/10.1108/eb025776 |
| Pages | 187-188 |
| Published date | 01 April 1996 |
| Author | A.A. Al‐Melhem |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol.4 No.
2
— International
INTERNATIONAL
Middle East: The Crime of Drawing Worthless
Cheques
A. A. Al-Melhem
The process of drawing cheques instead of cash is
spreading, as a consequence of the expansion of
banking operations, multiplicity of civil and com-
mercial transactions and the simplicity of such
drawing. A cheque is considered an instrument of
payment, honoured instantly on demand. Thus a
cheque may not be drawn for obtaining credit, and
accepting a cheque by a creditor, as a form of
payment, docs not discharge a debtor's obligation,
unless the cheque value is paid by the drawee.1
The legislator in Kuwait regards drawing a
worthless cheque (uncovered cheque) as a crime,
in order to build trust in such an instrument, and
to satisfy the payee that the value of the cheque
will be paid. Article 237 of the Penal Code No. 16
of 1960 states that any person drawing a worthless
cheque with bad faith shall be imprisoned for a
term not exceeding five years and/or a penalty of
not more than KD500. Such a crime may be
divided into five categories:
(1) drawing a cheque on no or insufficient funds,
(2) drawing the balance from the relevant account
before presenting the cheque to the drawee-
bank,
(3) ordering the bank not to pay the cheque,
(4) drawing or signing a cheque in a particular
way, intending it not to be honoured,
(5) negotiating or delivering a cheque paid to
bearer, with knowledge of insufficient funds in
the account.2
However, despite such different categories, the
prosecutor has to satisfy three conditions for con-
victing a defendant: the instrument should be a
cheque,3 of no or insufficient funds,4 drawn with
criminal intention or in bad faith.5
As a consequence of the Stock Exchange crises
occurring in Kuwait in the eighties, many worth-
less cheque crimes have been committed, despite
severe punishments. Thus, depending on the enor-
mity of such crimes, courts tended to apply Arti-
cles 81–82 of the Penal Code, ie using clemency,
by either not rendering judgment (Article 81) or
suspending it (Article 82).
Article 81 provides that judgment may not be
given, if the court believes that the violator in
question may not reoffend, and according to his
past record or age may oblige him to present a
guarantee, and to place him under supervision for
a term not exceeding two years.6
Article 82 states that a court may after passing a
judgment, order the same to be suspended for
three years, if it is believed that the convict may
not reoffend according to his record or age.7
The Judicial Authority by resorting to clemency
has placed victims in a disadvantageous position,
due to the fact that a cheque may never be hon-
oured. Thus, the legislator in 1987 had intervened,
by amending Article 237, to the effect of forbid-
ding applying Articles 81–82, unless the value of
the cheque was paid.8 The rationale of such an
amendment is to impose pressure on violators or
encourage them to pay the value of the cheque,
otherwise a cheque will lose its value as the instru-
ment of payment, duly used instead of cash.
It is worth noting that honouring a cheque
means discharging a debtor (drawer) from his obli-
gation (the debt), while a cheque is not really hon-
oured, when the relevant complaint has been
withdrawn by the victim upon acknowledgment of
the debt by the accused.9
Of late it has been revealed, by actually applying
Articles 81–82 to the crime of drawing a worthless
cheque, that the Articles were insufficient to
encourage violators to honour their cheques,
because they remain under the threat of punish-
ment, even if cheques are paid. Therefore, vio-
lators may prefer not to honour these cheques,
especially where a long part of the imprisonment
Page 187
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