A 45-year-old Thimphu resident bought two units of flat in Simtokha in May last year. He paid an advance of Nu 2.9 million (M) to the owner.
The man, however, could not change the ownership of the flats, as the National Pension and Provident Fund (NPPF) seized the building.
When the man approached the house owner to refund his money, he was issued a cheque of Nu 1.1M and cash. But there was no balance in the bank account of the house owner and the buyer approached Thimphu police.
Police charged the man for fraudulent cheque writing, which is a criminal offence according to section 304 of the Penal Code of Bhutan and the sentence is value-based.
While the number of reported cases of fraudulent cheque writing is increasing over the years with six cases in 2015 to 23 cases last year and 41 cases in Thimphu police station this year, charging people for the offence is not easy.
Police explained that once a person is given a cheque, he or she should produce the cheque to the bank within a month from the date it is issued. Once the bank informs the individual that there is no balance, another two months will be given to the cheque owner to deposit the money.
“The case is registered as fraudulent cheque writing if the cheque owner does not deposit the money even in the two months period,” a police official explained.
Police officials explained the offence is considered deceptive practice when numerous cheques are issued without balance in the account and when the cheque issuer doesn’t have an account with any banks.
It’s not a straightforward case either.
Court officials say private moneylenders misuse the provision on fraudulent cheque writing by making the borrowers issue cheques even when they know there is no balance so that they could consider the case as fraudulent cheque writing and claim their money.
A Thimphu dzongkhag court official explained that after the rules and regulations on private money lending specified Nu 90,000 as the amount ceiling to lend money, sales deeds are backdated to support the claim.
The state prosecuting agency, the Office of the Attorney General (OAG) also dismissed a fraudulent cheque writing case, as it was found that both parties knew there was no balance when the cheque was issued.