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The offence of bouncing a cheque and the defendant's possible defences at the hearing

cheque-bouncing -crime

Legal Insight

June 2021

George Psarakis LL.M. (mult.), PgCert

(republished from taxheaven.gr

Summary: This article summarizes the possible allegations of the defendant for the offence of issuing a bounced cheque through the practical application of the law.

A criminal offence whose discussion is quite common in Greek courts is that of issuing a bounced cheque. When a cheque is not paid, it is then stamped and within three months a complaint (complaint) is filed by the bearer against the issuer. After about 3 years the case is brought to the competent court and sentences of 3 months to 5 years imprisonment are imposed. In criminal courts, the discussion procedure seems to be completely standardised. However, the truth is that the defendant-publisher's lawyer has a palette of legal arguments that he can put forward. Supporting the defendant in any offense is a paramount calling of the highest order. When the attorney-at-law enters the courtroom, he or she must be absolutely certain that he or she has done everything possible to support the client's positions and to uphold the law, shedding light on all the necessary aspects of the case and pointing out any procedural invalidities that may ultimately lead to an acquittal. 

The offence of bouncing a cheque is provided for in Article 79 of Law 5960/1933. The following elements are objectively required to establish it:

a) The issuance of a formally valid cheque, i.e. the completion of the information on the form in accordance with Article 1 of Law 5960/1933,

b) The signature of the issuer, which must be handwritten and usually in his own handwriting, while it is irrelevant whether the cheque is issued for an individual debt of the issuer and charged to his personal account or for a debt of another person and a company represented by him and drawn on the account of the other person or the company,

(c) The timely appearance for payment and

(d) The lack of corresponding funds available to the payer both at the time of issue and at the time the cheque is presented for payment, with the obvious consequence of non-payment of the last bearer/beneficiary of the cheque. Acknowledgement of the refusal to pay the cheque is not an element of the crime, which can be made either by a public document (protest) or by a dated statement of the payer and/or the clearing office.

We are therefore in the courtroom at the hearing of the case and are defending the defendant. These are some of the possible allegations that can be raised and strengthen his position:

1. 1.Failure to file a formal complaint in accordance with the law

A classic allegation that is found in many cases in hearings is that of improper filing of an indictment. Since the complaint (i.e. the complaint submitted by the bearer of the cheque) must be submitted within three months of the commission and knowledge of the offence, any defects in the submission procedure ultimately result in the impossibility of resubmission due to the expiry of this period. Thereafter, therefore, there is a ground for discontinuing the criminal proceedings. Such defects are the failure of the attorney representing the instigator to certify the authenticity of the signature of the instigator at the time of submission of the statement of defence, or the failure of all the members of the board of directors of a company limited by shares to certify the authenticity of their signatures, for example, where the latter is the comptroller and the instigator. In the case where the board of directors of a company entrusts a third party to file a complaint against the issuer of the bounced cheque, it is required, in view of the fact that the aforementioned third party is a mere proxy-agent of the latter, that the minutes of the board of directors, which contain the relevant decision and which are attached to the complaint, bear a certificate of the authenticity of the signature of the "principal", i.e. the members of the board of directors of the company. Therefore, since the lawyer submitting the complaint is acting as a mere agent of the board of directors of the SA for the execution of a specific act entrusted to him, and not as a substitute of the board of directors (i.e. as a representative body of the SA appointed by a board of directors' minutes), the lawyer submitting the complaint must be considered as a representative of the SA. which is published in the GEMI), it is necessary that his authorization document, which is submitted together with the statement of continuation of the proceedings, be signed by all the members of the company's Board of Directors and certified by an Authority or a lawyer as to the authenticity of their signatures (OolomAP 4-6/2006).

2. Unlawful service of a writ of summons

Sometimes there are also omissions/defects in the procedure for the service of the writ of summons. For example, we have argued that service was invalid, which was accepted by the court because a simple copy of the writ of summons was served by fax sent to the police station concerned. However, service of the writ of summons must take place on the original which is issued for that very purpose by the competent public prosecutor (Article 320(2) of the CCP).  

The relevant argument is set out below, which was finally accepted by the court which annulled the writ of summons and terminated the criminal proceedings: 'According to the settled case-law of the courts of substance and of the Court of First Instance, the writ of summons must contain, among other things, an official stamp and the signature of the prosecutor who issued it. In accordance with paragraph 4 of Article 4 of the Code of Criminal Procedure, in addition to the official stamp of the Public Prosecutor's Office, the Court of First Instance must also have the signature of the person who issued the warrant and the official stamp of the person who signed it. 321 CCP, compliance with the provisions of paragraphs 1 and 2 is subject to the penalty of nullity of the writ of summons. Consequently, the service of a photocopied copy of the writ of summons is absolutely invalid. Moreover, a photocopy of the writ of summons is also a photocopied copy of a faxed copy at the end of which the original official stamp of the office and the signature of the Public Prosecutor who issued it do not appear (see the following cases cited: AP 407/1994, NOMOS - Efthes 3729/2004, NOMOS - Efthes 3865/1993, NOMOS - Pllar 5521/2001, NOMOS - Pllar 727/2004, NOMOS). 

This distinction between the original and the copy of the writ of summons can be readily seen by comparing the current law with the previous law. According to Article 5 par. 9 of Law No. 1738/1987 'the public prosecutor is entitled to serve the accused with an exact copy of the writ of summons, provided that the original exists in the relevant case file as an element of the case file'. This provision was repealed on 18/3/1991 by Law no. 1941/1991, which now requires the summons to be drawn up in two copies, one of which is served on the accused, and expressly prohibits the service on the accused of an exact copy of the summons. 

In this case, the summons served on me by the police officer Mr. ................ (see the service stamp on the body of the served fax copy) is allegedly a fax copy of the original summons which was allegedly sent to the relevant police station on 2/5/2017 by the Athens Prosecutor's Office (fax number: 2108832177) and therefore the requirement of serving a genuine copy is not met. There is no original signature of the issuing Public Prosecutor on the subpoena served on me and therefore it should be cancelled".

3. Invalidity of the writ of summons

The subpoena must contain the charge in detail so that the accused, even without legal support, is able to know the charge and be able to defend himself in court. It is rare, indeed, that omissions or incomplete descriptions in the respective summonses are found in the particular offence. 

E.g. problematic wording sometimes found in the subpoena enactments is as follows: "(...) did not have the corresponding funds available at the time of issue or payment (...)". However, the disjunctive wording of 'not having the corresponding available funds at the time of issue or at the time of non-payment of the cheque' does not specify at what point in time the lack of available funds existed and therefore the required precise definition of the act does not exist (see also AP 657/1972, Penchron 1972, p. 766). Since the crime in question is considered to be a mixed crime according to the prevailing jurisprudential view, in order to fully inform the accused, it should be specified in the summons which of the two different objective hypotheses has been fulfilled. Specifically, the two descriptions in art. 79 of the Check Act essentially indicate the description of two different objective hypotheses. In the first case, the issuer issues a valid cheque to the payer to whom it does not have corresponding funds available at the time of issue and, despite this action, fails to place such funds with the payer so as to prevent the result of non-payment of the bearer. In the second case, the issuer has corresponding funds available at the time of issuing the cheque and fails to maintain them at the time of payment, resulting in the non-payment of the bearer. 

4. Late sealing

Since the prerequisite for the commission of the offence is the timely sealing of the cheque, if this element is not present, even for one day, the offence of issuing a cheque in bad faith is not established. In particular, the cheque must be presented to the paying bank by the last day of the eight-day period beginning on the day following the day marked on the date of issue.  

5. Allegation of a manifest error of law

According to the provision of para. 2 of Article 31 of the new Criminal Code, the offender is not liable for the offence if he was not aware of the offence due to an error and the error is excusable, i.e. he could not avoid it even though he exercised due diligence. It follows from this provision that a legal error exists where the offender knows what he is doing but is either unaware that his act is in principle unjust or falsely believes that he is entitled to do it and the error consists in a wrong perception of a rule of law and, in the circumstances specifically mentioned, there is a situation which precludes the offence. However, the error must be excusable for not imputing the offence, in the sense that whatever care the perpetrator took in the specific circumstances and conditions in which he found himself, in view of his age, his intellectual and professional abilities and the efforts he made to obtain information about the matter from other experts, he could not diagnose the wrongfulness of the act (Ol AO 1179/1986).

It has been held, therefore, that a charge of issuing a bad cheque on the ground of a manifest error of law cannot be founded against the defendant who instructed the bank not to pay a cheque given to secure a future claim for building work which was never carried out. This was because the issuer reasonably believed that it had the right to revoke the cheque and therefore not to pay it (PlenumHalk 66/1996).

In order for a similar allegation to be accepted, however, the specific circumstances and facts which gave the defendant the misguided impression that he had the right to perform the acts must be stated, with specific reference to the fact that, in the circumstances in which he acted, in view of his age, his mental and professional capacities and the actions he took in order to ascertain whether the above conduct was lawful, his error was excusable because he was unable to diagnose the wrongfulness of his actions (see 165/2016 decision of the Supreme Court).

6. Claim for the validation of the Reorganisation Agreement

Based on the respective legislative frameworks for the law of reorganisation/reconciliation, special provisions were and are foreseen with regard to the effect of the reorganisation agreement on the offence of issuing a bounced cheque. Under the prevailing law of the old bankruptcy code of 2007, there was in the context of the reorganisation, as it was formed by Law 4013/2011, a regulation on the elimination of the merit of the debtor's bounced cheques issued by the debtor and held by any bearer-creditor (SC 1538/2013).

Today, the current law (Article 61 of Law 4738/2020 - New Bankruptcy Code) provides for the following: 

"In case of full and timely fulfilment of the debtor's obligations arising from the reorganization agreement, the criminality of the acts referred to in par. 6 of Article 60', paragraph 6 of which includes the offence of writing a bad cheque'. 

7. Allegation of forgery

An independent allegation which contributes to the acquittal of the accused is the allegation made by the latter that the cheque has been forged by its recipient with regard to certain formal elements necessary for its validity (CC 228/2013). Therefore, if the signature has not been forged by the alleged perpetrator, the latter may apply for his acquittal, having possibly requested a corresponding handwriting expert examination. In many cases, however, in practice the court may accept that the signature is not that of the perpetrator, but may convict the latter as the perpetrator, with a permissible modification of the charge (provided, of course, that the relevant conditions are met).

8. Allegation that the defendant himself did not sign a charge of conspiracy

The crime of issuing a bounced cheque is not committed jointly with another defendant when only one signature (the signature of the other) exists on the bodies of the cheques (Council of State, 23/2006 PrLog 2007/156). No complicity is constituted, i.e., when the defendants do not sign the cheque jointly, as co-authors. Therefore, a corresponding charge cannot be established, and if there is a conviction, any judgment lacks specific and thorough reasoning, and is therefore voidable. 

9. Claim of Lack of a Dome

If it is proved in court that the non-payment of the disputed cheque was due to a totally unforeseeable event when at the time of actual issue the corresponding funds were available, the accused should be acquitted. In other words, in order for the act of issuing a cheque to be punishable, the issuer of the cheque must be aware, at the level of knowledge, even as a possibility, and at the level of willfulness, that he seeks or simply accepts all the elements necessary for the realisation of the objective element of the offence in question, including the lack of available funds.

See, for example, CP 2216/2009: 'However, this reasoning is not specific and comprehensive, as explained in the legal reasoning. In particular, with regard to the element of the lack of funds necessary to pay the cheques at the time when, as the legal representative of the above-mentioned company, he actually issued the three post-dated cheques referred to therein, which he accepted (...), he does not set out any facts showing that there were no funds available in the account held at the branch of the paying bank referred to in the body of the cheques at the time of their actual issue and throughout the period from the date of issue to the date of payment. In particular, it does not state whether a certificate was produced from the paying bank as to whether or not the funds necessary for payment of the three cheques were available in that account throughout that period, a fact to which is also directly linked the element of knowledge, in the sense referred to in the legal opinion, of the defendant, as the legal representative of the company, of the absence of those funds, which is of interest in the present case, in the light of the foregoing. The reasoning of the judgment that the lack of the necessary funds at the time of the actual issue of the cheques and the defendant's knowledge of that fact is inferred from the fact that the cheques were post-dated by 7-8 months is not specific and conclusive, since the issue of post-dated cheques, which is part of the regular practice in recent years of changing the cheque from a means of payment to a means of providing credit, does not in itself demonstrate the lack of the funds necessary to pay them at the time of their issue, since that can be attributed to the financial planning of the issuer and payer of the cheques and to a desire to maintain financial liquidity and to the long-term regulation of his obligations'.

Cf. and AP 772/2015: "The defendants, acting jointly within the framework of the above authorizations, on behalf of the company, in May 2006 issued the disputed, no. ... two-line post-dated cheque of ALPHA BANK, with the date of issue 26-2-2008, amounting to 114,000 euros, to the order of CHROFIN S.A.. That cheque was presented in due time on 4/3/2008 by the plaintiff joint stock company under the name 'SFS HELLAS FINANCE ANONYMOUS CAR LENDING AND TRADING COMPANY', as CHROFIN S.A. was renamed, but was not paid due to lack of corresponding available funds. The non-payment of the contested cheque was due to a completely unforeseeable event, namely the fact that at the beginning of January 2008 RENAULT France suddenly terminated the multi-year exclusive agency agreement it had concluded with MAVA. The latter, which had been active on the car market since 1964, had been the exclusive distributor of RENAULT vehicles since 1975. Following the complaint, MAVA, which no longer had any business activities, collapsed financially because the financing of the company and the banks ceased to provide it with finance, ceased its activities in February 2008 and dismissed its staff. At the time the defendants issued the disputed cheque, they knew that there were funds available for payment, because MAVA's financial situation was good and indeed the disputed cheque had been issued in 2006 together with thirty-four (34) other cheques at the order of the defendant, which at the time belonged to the same group of companies as MAVA (A.M. Group), and of these cheques, the first twenty (20) were duly paid, for an amount of EUR 154,000 each. On the basis of the above evidence, the offence attributed to the defendants is subjectively established. It is therefore necessary, rejecting the independent claim of the second defendant that there was a factual error on his part, to declare the defendants innocent, in the absence of malice, of the infringement of Article 79 of Law 5960/1933.

Cf. also in civil litigation, TREfAthens 801/2019: "It was not proven that the defendant-appellant, who in his capacity as the legal representative of a joint-stock company issued post-dated cheques on behalf of the company on the order of the plaintiff-appellee, knew that there were no funds available at the time of their issue or would not be available when they were paid, nor did he know that the accounts of the issuing company would be without available funds and that he accepted this so as to incur liability in tort'.

10. Allegation of bankruptcy

Where the drawer of a cheque is bankrupt, either himself or the company he represents and is alleged to be responsible for payment of the cheque, an independent claim of lack of imputability may be raised. This is because it is argued that during the suspect period the subsequent bankrupt cannot pay the cheque as he would then be guilty of the offence of preferential treatment of a creditor (now Article 198 of the new Insolvency Code in conjunction with Article 33 of the new Criminal Code). In order for this claim to be admissible, the time of issue of the cheque must be within the suspect period, i.e. after the time of suspension of payments set by the bankruptcy court (SC 1007/2009 and SC 1008/2009). Some judgments even require proof that at the time of actual issue the necessary funds were available in the issuer's bank account. Under the new bankruptcy law (Law 4738/2020), this period may extend up to two years before the declaration of bankruptcy. There are, however, also court decisions which accept that the bankruptcy of the issuer does not have an exonerating effect but, on the contrary, increases the amount of the fraudulent conduct, and therefore the amount of the penalty, after it has been calculated (CC 1263/2002).

See e.g. TrimEfthes 437/2006: "The defendants accused of the act of issuing a bounced cheque within the suspect period are declared innocent, because their fraudulent conduct is not proven as a consequence of their subsequent bankruptcy, since at the time of their issuance there were available funds".

Cf. and CP 280/2007: 'It does not follow from the provision of Article 79 § 1 of Law 5960/1933 that if the issuer of a bounced cheque had, at the time of its issue, become bankrupt or ceased to pay as a trader, this fact does not remove the wrongfulness or eliminate the criminality of the act of issuing a bounced cheque, nor does it remove the capacity of the perpetrator to impute it'.

Cf. and AP 1007/2009: 'An independent claim is the declaration of bankruptcy with a cessation of payments prior to the time of issue of the cheques, in which case the non-payment of the cheques is regarded as unjustified and the subjective element of the crime of Article 79 § 1 of Law 5960/1933 is not established'.

Cf. and AP 565/2007: "The bankruptcy of the debtor has a legal influence on the criminal liability of the debtor provided that the declaration of bankruptcy took place before the debt was confirmed or the debt was due, in view of the fact that the bankruptcy of the debtor under Art. Law No 635/1937, the bankrupt is automatically deprived of the administration of the bankrupt's property and any legal transaction concerning the bankrupt's property is invalid as regards the group of creditors, and Article 679(4) of the EBN establishes the bankrupt's criminal liability in the event of the payment of his creditors after the day on which payments cease'.

11. Claim that a civil claim is time-barred

A civil claim arising from a cheque is time-barred after 6 months from the date of sealing. This means that if the bearer does not take action by way of an action or an order for payment within six months, his claim will be time-barred and the debtor will be able to refuse payment. It has therefore been argued that the limitation period can be seen as a specific ground for removing the wrongfulness and in particular as the exercise of a legal right (granted by the above-mentioned provisions), which removes the fundamentally wrongful nature of the issuer's conduct. This is because the refusal to pay is ultimately based on the exercise of a right.

12. Late submission of a statement of objections 

If the bearer's complaint is submitted after the three-month period from the date on which he became aware of the lack of available funds, the prosecution is declared inadmissible. This is because, in the case of the crime of issuing a bounced cheque, the three-month period for filing a complaint for the prosecution of the perpetrator begins on the day on which the bearer of the cheque in question became aware of the lack of funds to pay it (CP 1374/2019, CP 561/2017). He sometimes becomes aware at the time the cheque appears for payment, irrespective of the time when it is sealed, which may be a few days later.

See for example. TrPliMtHes 14941/2011: "Moreover, the representative of this defendant (civil plaintiff) examined at the hearing expressly testified that on the date of the appearance of the cheques, the bank that appears them knows whether or not there are funds for the payment of the cheques and the non-payment of the cheques due to the lack of relevant funds, and this, namely the non-payment of a cheque, appears on the same day of its appearance for payment, in the computer centre of the defendant, even if it is not the paying bank. In view of all of the above, it follows that, in relation to the five cheques in question, at the time when they were presented by the last compilers, when they were not paid because there were no funds available in the account of the issuing general partnership, the compilers and the instigators were aware of the lack of a counterpart cheque for payment'.

Therefore, since the complaint was filed out of time, the relevant allegation, if properly pleaded, will result in the defendant's acquittal. 

13. Claim of invalidity of a cheque

In order for a defendant to be convicted of the offense of writing a bad check, there must be a valid check. Since only a valid cheque gives rise to a valid claim for payment and thus the obligation to have available funds etc. It is not an offence, for example, to issue a dishonoured cheque when the cheque does not indicate the time of issue but the time of expiry, which is an element of the bill of exchange (Council Regulation 4721227/2002 Coll. 2002/159) or when it indicates a non-existent date as the time of issue (Council Regulation 1359/2001 Coll. NGS/659) or when the time of issue is not clear (CP 1264/2009 Coll. 2009/512).

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