The check, which is frequently used as a means of payment in commercial life, is a tool that not only provides trust between the parties but also has both commercial and legal consequences if it is returned unpaid or dishonored. The uncertainty and bottleneck in the economy, the increase in inflation rates and the rise in interest rates, as a rule of economic science, impede commercial activities and negatively affect the cash flow of companies. As a matter of fact, reports published by the Risk Center of the Banks Association of Turkey clearly show that there has been a significant increase in the number of dishonored checks. According to the report, while the total amount of 13 million checks belonging to 544 thousand issuers submitted to banks in the January-September period of 2024 was 5.560 billion TL, checks belonging to 22 thousand issuers with a total amount of 123 billion TL were dishonored at the time of submission to the bank. While 146,886 checks were dishonored upon presentation to banks in 2023, this number reached 197,050 only in the first nine months of 2024.1 The fact that this number, which was around 104,000 in the first nine months of 2023, almost doubled in the same period of 2024, clearly shows the gravity of the situation in economic terms.
The increase in the number of dishonored checks also leads to increased activity in courthouses. In order to increase the collectability and compel debtors to pay, creditors who initiate enforcement proceedings through bill of exchange-specific procedures to recover their receivables file complaints for the offense of issuing dishonored checks under the Check Law No. 5941 ("Law"). Article 5 of the Law provides that "A judicial fine equivalent to up to one thousand five hundred days shall be imposed on a person who, upon the complaint of the bearer, causes a 'dishonored' transaction to be made in relation to a check when it is presented within the legal submission period based on the date of issue indicated on it. However, the judicial fine imposed shall not be less than the dishonored portion of the check. The court shall also rule on a ban on issuing checks and opening checking accounts, and if such a ban already exists, on its continuation. During the proceedings, the court shall ex officio impose a ban on issuing checks and opening checking accounts as a protective measure. This ban shall apply to natural or legal persons holding checking accounts, individuals who issue checks on behalf of such legal persons, and, if the dishonored check is issued on behalf of a capital company, to the management body and company officials registered in the trade registry." Accordingly, the drawer who fails to maintain sufficient funds in the account to cover the check at the time of its submission to the bank is subject to a judicial fine equal to at least the dishonored amount of the check, and shall also be prohibited from issuing checks and opening checking accounts. If the check is drawn by a legal entity, these penalties shall be imposed on the management body and authorized representatives of the drawer's legal entity.
In this case, the debt of the drawer of the check, whose obligation arising from the check remains unpaid, is increased by the judicial fine. Paragraph 11 of the same article stipulates that if the judicial fine is not paid, the fine shall be converted into imprisonment without the imposition of a decision to work in public service. Therefore, debtors, whose obligations are increased and who are at risk of imprisonment, are compelled to pay their debt to the creditor in order to clear the judicial fine. Although this method does indeed accelerate collection, failure to follow the proper procedures may prevent the imposition of penalties and significantly prolong the collection process, or may result in no collection being made at all.
The Law clearly defines the procedure for "dishonored" annotation to be executed by banks. Article 3/4 of the Law reads as follows: "If the bearer makes a request, the 'dishonored' transaction shall be processed by recording on the reverse side of the check the date it was presented to the bank for collection, the account status, the amount paid by the bank within the framework of its obligation, and the name and surname of the individual presenting it. If the amount is collected by this individual on behalf of a legal entity, this fact must be recorded and signed by both the individual and the bank official. The outstanding amount, after deducting the amount paid by the bank, must be clearly indicated. If the bearer declines to sign, the 'dishonored' transaction shall not be executed." The preamble of the Law states that "The fourth paragraph determines how the 'dishonored' transaction shall be carried out in relation to the check. The 'dishonored' transaction shall be carried out by recording on the reverse side of the check the date of presentation to the bank for collection, the account status, the name and surname of the individual presenting it, and also by signing under this information by both the bank official and the individual presenting it."
The essential elements of the offense of causing a check to be dishonored are that the check complies with the requirements set forth in the Turkish Commercial Code No. 6102, that the check is presented to the bank by lawful holder within the legal submission period, and that the bank has properly processed the "dishonor" transaction in accordance with the procedure stipulated in the Law.2 Therefore, if any of these elements is missing, it is possible that the drawer who fails to maintain sufficient funds in the account to cover the check will not be penalized. If it is determined that the "dishonored" transaction was carried out improperly during the trial phase, the court must issue an acquittal pursuant to Article 223/2-a of the Criminal Procedure Law No. 52713 or dismiss the case pursuant to Article 223/84. Failure to follow the proper dishonor procedure may also adversely affect the creditor's right of recourse.
For this reason, it is very important to carry out the "dishonored" transaction by paying attention to the matters stipulated in the Law, and to prevent the bank personnel from committing an improper or incomplete transaction, either intentionally or unintentionally. Pursuant to the Law, the following points must be met during the "dishonored" process:
- The date of presentation to the bank for collection must be written on the back of the check.
- The account status must be indicated.
- The amount paid by the bank in accordance with its obligation must be recorded. After deducting the amount paid by the bank, the remaining uncovered amount must be clearly indicated.
- The name and surname of the individual presenting the check must be written.
- If the individual presenting the check collects the amount on behalf of a legal entity, this fact must be stated.
- The check must be signed by the individual presenting it and the bank official.
At this point, it would be useful to highlight the most common mistake frequently encountered in practice. Even if the other elements are met, in practice, the name and surname of the individual presenting the check are often omitted. If the individual presenting the check acts on behalf of a legal entity, this fact is often omitted, and the signature of the individual presenting the check is not obtained, even if the bank official signs it. However, it is clear from the wording of the law that the omission of even one of these elements may result in the defendants being granted acquittal or dismissal. For this reason, it is crucial that all these issues are carefully monitored and controlled during each "dishonored" transaction.
There are other issues that need to be taken into consideration as equally important as the "dishonored" transaction. The offense of causing a "dishonored" transaction related to a check is a complaint-based crime. For this reason, the person who commits the offense cannot be prosecuted ex officio unless the creditor files a complaint. The limitation period for filing a complaint regarding this offense is 3 months from the date of the "dishonored" transaction and, in any case, 1 year from the commission of the act. These periods are considered by the courts even without a request. Since the right to file a complaint is a personal and non-transferable right, the right to file a complaint belongs to the lawful holder who presents the check to the bank for payment and who is the victim at the time the offense occurs. Endorsers who are not lawful holders do not have standing to file a complaint. The court with jurisdiction over this crime is the competent criminal court. The competent court is the court where the bank branch where the check was presented for collection is located, or where the checking account is opened, or where the account holder or the complainant resides.
Consequently, it is of critical importance to ensure that the bank personnel fully comply with the conditions specified in Law when processing the "dishonored" transaction in cases where the bank does not deem the check dishonored the upon presentation, to comply with the statute of limitations for the offense of causing the check to be dishonored, as it is a complaint-based crime, and to ensure that the complaint is filed by the lawful holder of the check. If these conditions are not met, the defendant may not be sentenced, and the debtor may not be compelled to pay.
Footnotes
1 Turkish Banks Association Risk Center Check Information Report - September 2024
(https://www.riskmerkezi.org/Content/Upload/istatistikiraporlar/ekler/4473/Cek_Bilgileri_-_Eylul_2024.pdf https://www.riskmerkezi.org/Content/Upload/istatistikiraporlar/ekler/4472/Bankalara_Ibraz_Edilen_ve_Karsiliksiz_Islemi_Yapilan_Cek_Bilgileri_-_Eylul_2024.pdf )
2 Yargıtay 19. CD 5.11.2018 T. 2018/6510 E. 2018/11325 K. – 10.3.2021 T. 2021/3107 E. 2021/2771 K.
3 Yargıtay 19. CD 27.1.2020 T. 2019/35817 E. 2020/415 K.
4 İstanbul Anadolu 7. İcra Ceza Mahkemesi 13.4.2018 T. 2018/103 E. 2018/181 K. (Finalized without appellete law)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
