Criminal and Civil Checks

Criminal and Civil Checks

Among various financial instruments, the check has long been one of the most widely used means of payment in commercial transactions.

Criminal and civil checks can be distinguished by their respective legal characteristics. In modern transactions, parties often prefer a check that is criminally enforceable so that, in the event of non-payment, they may pursue the issuer more swiftly and effectively before judicial authorities and recover the amount of the check. For this reason, holders of dishonored checks often seek to initiate criminal proceedings against the issuer and to subject the issuer to legal sanctions.

The purpose of this text is to examine the nature of criminal and civil checks and to explain the differences between them, which requires a separate analysis of each category.

Judicial Procedures for Criminal and Civil Checks

What Is a Criminal Check?

A check is considered criminal when certain legal conditions relating to the issuer are satisfied, including the following:

• The issuer must not withdraw all or part of the funds on the basis of which the check was issued.
• The issuer must refrain from including any conditions in the text of the check, as banks do not honor conditional checks.
• The issuer must have sufficient funds in their bank account on the date stated on the check to enable payment.
• The issuer must exercise due care when issuing the check to avoid discrepancies in signature, inconsistencies in the check’s contents, or alterations, as such issues may prevent the bank from making payment.
• The issuer must not issue a stop payment order.
• The issuer must not issue a check when the bank account is closed. If a check is issued with knowledge that the account is closed, the check is deemed a dishonored check and constitutes the offense of issuing a check without funds, which carries the maximum statutory penalty.

Time Limit for Dishonor of a Criminal Check

For the purpose of filing a criminal complaint, the holder of the check must present it to the bank within six months from the due date stated on the check.

If the check is dishonored for insufficient funds, the holder must request issuance of a certificate of non-payment.

If the holder fails to present the check to the bank and obtain a certificate of non-payment within:

• first six-month period, the check will lose its criminal character.
• The second six-month period begins from the date of issuance of the certificate of non-payment.

If the holder does not file a criminal complaint within this period, criminal prosecution against the issuer will no longer be possible.

Accordingly, a check is considered criminal only if the holder completes the required actions within the prescribed statutory time limits.

Cases Where Criminal Proceedings Are Not Permitted

Criminal prosecution is not permitted in the following cases:

• Where the check is proven to have been issued as a blank signed check.
• Where payment of the check is made conditional upon the occurrence of a condition stated in the text of the check.
• Where it is stated in the check that it was issued as security or as a guarantee for the performance of an obligation.
• Where it is proven that the actual date of issuance precedes the date stated on the check, or where the check was issued without a date.
• Where payment of the check is subject to a condition that was not stated in the text of the check.

It should be noted that the right to file a criminal complaint belongs exclusively to the person who presented the check to the bank and in whose name the certificate of non-payment was issued.

Steps Required to File a Criminal Complaint

• Presenting the check to the bank within the statutory time limit for payment.
• Requesting dishonor of the check and issuance of a certificate of non-payment by the drawee bank.
• Submit the original check, identification documents, and file the criminal complaint with the public prosecutor’s office.

Note: Filing a criminal complaint requires completion of the relevant application form by the complainant, payment of court fees, and compliance with all procedural requirements.

What Is a Civil Check?

In addition to the right to pursue criminal proceedings, the law also grants the holder of a dishonored check the right to file a civil claim. Under this mechanism, the holder may seek recovery of the amount of the check through civil proceedings.

Unlike criminal checks, claims relating to civil checks are not subject to a specific statutory time limit, and the holder may initiate a civil action to recover the amount at any time. An exception applies with respect to claims against guarantors and endorsers, which are subject to specific statutory deadlines.

In cases where criminal prosecution is not available, the holder must pursue recovery through a civil action. In such circumstances, the check is classified as a civil check.

Procedures for Filing a Civil Claim Based on a Check

• Presenting the check to the bank for payment.
• Requesting dishonor of the check and issuance of a certificate of non-payment by the drawee bank.
• Preparing and submitting a civil petition against the liable parties before the general civil court.

For checks with an amount of less than 200 million rials, jurisdiction lies with the Dispute Resolution Council.

Differences Between Criminal and Civil Checks

Penalties for Issuers:

If a dishonored check is criminal in nature, issuance of such a check constitutes a criminal offense under Article 7 of the Check Issuance Law and may result in penalties, including imprisonment. In contrast, issuance of a civil dishonored check does not constitute a criminal offense and does not result in criminal punishment.

Liable Parties:

• Civil Check: In civil checks, the issuer, guarantor, and endorser bear civil liability, and the holder may file a civil claim against all liable parties.
• Criminal Check: In criminal checks, only the issuer bears criminal liability. Guarantors and endorsers are not subject to criminal responsibility.

Frequently Asked Questions About Criminal and Civil Checks