What Is a Check?
A check is a negotiable instrument governed by Book Three of the Turkish Commercial Code No. 6102, the Check Law No. 5941, and the regulations issued pursuant to these laws. A check is a type of negotiable instrument used to meet the needs of commercial life and to overcome various difficulties associated with carrying cash.
The use of a check as a means of payment offers various advantages to both the drawer and the holder. First and foremost, payment by check provides a faster and more certain means of payment compared to cash. Additionally, payments made by check offer convenience in terms of payment documentation.
The absence of even one of the mandatory elements renders the document invalid, thereby aiming to protect the interests of the parties involved. However, despite this strict approach, the legislature has continued to recognize the document as valid even in the absence of certain formal requirements.
What are the elements that must be present on a check?
1) The Word “Check”
2) An Unconditional Order to Pay a Specific Amount
3) Payee
4) Barcode and Serial Number
5) Date of Issuance
6) Issuer’s Signature
7) Place of Issuance
Non-payment of a Check:
To receive the check amount, the holder must present the check to the drawee bank for payment within the valid presentation period. This matter is regulated in the relevant article of the Check Law as follows: “A check containing sufficient funds is paid when presented to any branch of the drawee bank where the account is held, provided the holder’s tax identification number, if any, has been verified. However, if the check is presented to a branch other than the one where the account is held, the branch must verify the funds before payment is made.”
The check holder has no authority to verify whether there is sufficient balance in the account. The check holder may present the check to the paying bank even if the date of issuance has not yet arrived; however, payment is contingent upon there being sufficient funds in the account. In other words, checks presented before the date of issuance are paid by the bank if there are sufficient funds in the account; however, even if there are no funds in the account, the check is not subject to a “insufficient funds” transaction.
What Is a Check with Insufficient Funds?
A check is classified as a dishonored check if the amount specified on the check is not available in the relevant bank account at the time it is presented to the bank. For a check to be deemed dishonored, it is not sufficient that the drawer’s account lacks funds. For a check to be classified as a dishonored check, certain elements must be present together.
These elements are as follows:
o The document presented to the drawee bank for payment must be in the form of a check.
The check must have been presented to the drawee bank by the legal holder.
The check must have been presented to the drawee bank within the legally prescribed presentation periods. If the check is presented before the date of issuance or after the presentation period has expired, the “bounced check” procedure can no longer be applied.
What Are the Collection and Enforcement Procedures for Bounced Checks?
For checks that meet the validity requirements and have been marked as bounced, enforcement proceedings specific to negotiable instruments may be initiated. In addition to enforcement proceedings, if the check holder exercises their right to file a complaint regarding the offense of issuing a dishonored check, the debtor may face criminal penalties, thereby facilitating the collection of the unpaid check.
What We Need to Know About the Offense of Issuing a Dishonored Check
– This is a complaint-based offense.
– For the crime to be established: The check must have been presented to the drawee bank by an authorized holder within the statutory presentation period. The amount of the check presented within the statutory presentation period must have been unpaid in full or in part. The notation “insufficient funds” must be present. Additionally, the holder must file a complaint within three months from the date the “insufficient funds” notation appears.
– The offense is committed at the moment the “insufficient funds” notation is recorded.
– Penalty for the Offense of Issuing a Worthless Check: Upon the holder’s complaint, a fine of up to 1,500 days may be imposed for each check. If the imposed fine is not paid, it is automatically converted into a prison sentence.
Special Enforcement Procedures for Negotiable Instruments;
Special enforcement procedures for negotiable instruments constitute a specific enforcement method established under the Turkish Commercial Code (TCC) for negotiable instruments.
A person holding a claim for money or security may initiate enforcement proceedings through general attachment; however, if the debt is secured by a negotiable instrument, they may utilize the special enforcement procedures specific to negotiable instruments, which are specifically regulated by law and offer greater advantages compared to general attachment. Since negotiable instruments are listed in limited numbers in the Turkish Commercial Code and consist solely of promissory notes and checks, a creditor may only resort to the enforcement procedures specific to negotiable instruments if the debt is based on one of these instruments.
In enforcement proceedings initiated through attachment, the debtor may exercise the right to object to the signature or the debt by filing a petition with the enforcement court to which the enforcement office conducting the proceedings is affiliated, within 5 days of the service of the payment order. Objecting to the payment order does not suspend enforcement proceedings other than the sale. However, a debtor who objects to the payment order may request the enforcement court to temporarily suspend the enforcement proceedings to prevent the seizure of their property or the payment of funds held by the enforcement office to the creditor.