Dealing with cheque default: My dad is in jail

I have owned a company in Dubai for the past six months. I received a post-dated cheque towards a Dh600,000 payment from another company in Dubai that I used to supply goods to. However, the cheque bounced due to lack of funds. I was then informed by an employee of the other company that it is a limited liability company (LLC) and its liability is limited to its capital of Dh500,000. The employee also said that the company had been dealing in a similar manner with other suppliers. Its manager used to issue post-dated cheques on orders for goods and tell everybody that the company belonged to a local sponsor. In my dealings with him, he never revealed that the company was an LLC. What is my position under the law if I go to court? Can I redeem the cheque amount in full although the amount is bigger than the company’s capital?

Answer: The questioner should file a police complaint against the individual who signed the cheque. The person might settle the cheque amount in full to avoid being jailed. In case of non-settlement, the questioner should file a civil case against the company and its manager on the grounds that the manager has cheated the questioner by not informing him that the company he represents is an LLC. The questioner shall prove before the court that he has been cheated by providing evidence that the company has not showed on its papers that it is a LLC. If the court finds that the manager is guilty, it might rule in the questioner’s favour and hold the manager and the latter’s company jointly responsible. Therefore, both these parties may be directed to jointly compensate the questioner.

Partnership share dispute

Question: My father is currently lodged in the central jail in cases related to cheque default. My father joined a company in Dubai as general manager in 2012. My father’s name was included in the trade licence as a 49-per-cent partner but his visa issued by the labour ministry showed his status to be that of an employee. In 2016, the local partner sold his 51 per cent stake to another local partner and the trade licence was amended to reflect the new partner.

My father remained the 49 per cent partner as per the trade licence but his visa status remained unchanged in labour ministry records. Unfortunately, the company ran into financial problems and many cases got registered against my father since cheques had been signed in his name. The new partner assured him that he would arrange funds and bail him out. My father has been lodged at the central jail since October 2016 facing various charges. The local partner approached me (I had power of attorney from my father) and told me he had managed to find a buyer for my father’s shares. He told me that if I were to give an undertaking in court offering to release my father’s shares, I would get the sale amount and would be able to secure my father’s release. But he took the money after the share sale was signed and hasn’t bailed my father yet and has also not paid for his cases. Meanwhile, the new partner, in his capacity as manager, also reported my father to the labour department as an absconder although he is aware that my father is in central jail and we both visited my father in jail three months back. How can we get back the money from the old partner? My father’s company shared rights to money in any share sale. Is this absconder report justified before the labour ministry? Can we object against that false report at the ministry of labour by stating that my father is in jail and not absconding? All cases pending against my father have to do with the company except three personal cases involving small amounts. My family has no other source of income and we are going through a difficult phase. How can I bring this to the attention of the authorities and find a solution? Is my father entitled to his salary and gratuity since he was running the company as a manager?

Answer: The sale of shares by the partner while denying the questioner’s father his right to the proceeds is deemed as a breach of law and such action is fraudulent and amounts to breach of trust. I would advise the questioner to file a criminal complaint against the partner before the Public Prosecution. As for the absconder complaint filed by the said partner against the questioner’s father while he was aware that he was in prison, this action is also deemed as a breach of the Labour Law and Ministry of Labour rules. The laws and rules penalise the employer if he files an absconder complaint while being aware of the employee’s location. Therefore, I would advice the questioner to approach the Ministry of Human Resources and Emiratisation to file a complaint against the partner and furnish proof that such a complaint is false and malicious.

Questions answered by advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.

source : gulfnews