Bill to repeal the Act on Offences Arising from the Use of Cheques, 1991

Keywords: Mazars, Thailand, Legal, Ministry of Justice, Civil and Commercial Code, Cheques

15 August 2022

The Act imposes criminal penalties, including a fine and / or a prison sentence, on those issuing cheques who:

1. seek to prevent the use of the funds to be received for the cheque;

2. issue cheques when there are no funds in the chequing account;

3. seek to use more funds than are in the chequing account;

4. withdraw all or part of the funds from the chequing account, resulting in insufficient funds to pay the cheque; and

5. dishonestly seek to prevent the bank from using the cheque, such as issuing a cheque which the issuer knows the bank will refuse to cash.

The repeal of the Act would mean that those issuing cheques for the reasons mentioned in the paragraph above would no longer be criminally liable under the Act. In addition, the repeal would apply retroactively to those currently on trial or serving a prison sentence for such an offence.

Therefore, if the bill approved by the parliament is passed into law and the Act is repealed, those issuing cheques for most of the reasons listed above would instead be liable for the civil offence of breach of contract. While Chapter 4 (Sections 987 through 1000) of the Civil and Commercial Code addresses the use of cheques, it does not mention a penalty for issuing a cheque which a bank refuses to cash. However, if someone issuing a cheque has no intention of paying the debt for which the cheque is issued or otherwise issues a cheque dishonestly, that person may be held criminally liable for fraud.

The repeal of the Act would also be beneficial for commercial banks, as they can take measures to increase the reliability of cheques by using customer screening, without the need to file criminal charges. This would also reduce the burden of having to impose criminal penalties on some debtors to enforce the payment of debts.

Reference: The Secretariat of the Senate (in Thai) dated on 21 June 2022