DISHONOURED (UNCOVERED) CHEQUES FROM A LEGAL PERSPECTIVE

PART ONE

§ 1 HISTORICAL DEVELOPMENT OF THE USE OF THE CHEQUE

From a historical perspective, we may say that the cheque began to appear from the very first days on which persons deposited their (paper and even metal money, such as gold and silver) with certain persons for safekeeping, and that it has developed and come down to the present day. Indeed, the owner of money deposited first with money-changers and later, in the technical sense, with bankers or banks could, in line with his needs, not only demand his money back from these persons in cash, in whole or in part, but could also have this money transferred to an account belonging to himself or to a third person, or could dispose of this money by delivering to his creditor an instrument addressed to the person with whom he had deposited his money and containing an order to pay. The name given in international trade and in law to the instrument used for this last-mentioned method of payment has been the “cheque”. Thus the cheque began to perform the function of an instrument enabling a person, without having to use cash, to make payments out of his holdings (funds) with certain persons, and its use became widespread and has reached the present day.¹ Today, owing to its function, more privileged protective measures have been adopted for the cheque than for similar instruments. In the course of history, one of the primary reasons for attaching particular importance to the cheque must be, in addition to the economic nature of the cheque, the benefits that the use of cheques provides to the parties.

Until the Cheque Law entered into force on 3 April 1985, there were no special provisions on the punishment of dishonoured cheques. The Grand National Assembly accepted, by an interpretative decision, that the drawing of a dishonoured cheque would, where intentional, be subject to the provisions on fraud, and the courts punished the person drawing a dishonoured cheque where the elements set out in Articles 503 et seq. of the Turkish Criminal Code were present. However, for fraud to arise, in addition to the cheque holder suffering loss, the drawer must also have deceived the other party by taking advantage of his sincerity and good faith and by resorting to tricks and artifices (TCK.503)². Since the coming together of all these elements is a very rare occurrence, the application of the criminal provision had become exceptional. In particular, in the case of post-dated cheques, the application of the fraud provisions had become almost entirely impossible. This situation naturally shook confidence in the cheque to a great extent.³

In response to this, the Law on the Regulation of Payments by Cheque and the Protection of Cheque Holders (Law No. 3167), enacted as a reaction law, not only failed to prevent the issuing of dishonoured cheques despite containing severe criminal sanctions, but also, because of the number and complexity of the formalities it introduced, led to genuine blockages in the judiciary. The law was amended once again and Cheque Law No. 5941 was introduced. Over time it became apparent that this Law, which entered into force on 20 December 2009, could not prevent extraordinary increases in the number of dishonoured cheques either.⁴

§ 2 DIFFERENCES BETWEEN THE CHEQUE AND SIMILAR COMMERCIAL INSTRUMENTS

Just like the bill of exchange, the cheque is an instrument of circulation (tedavül senedi). However, despite this similarity, the cheque is not, like the bill of exchange, a means of credit, but a “means of payment”. It is this difference between them in terms of their economic nature that gives rise to the legal differences between the bill of exchange and the cheque.⁵

Nevertheless, the following differences in particular are observed between the cheque and the bill of exchange:⁶

(1) In a cheque, the drawee can only be a bank (TK 782/1,815). A cheque drawn on another natural or legal person in disregard of this rule is deemed to have only the effect of a money order (havale) (TK 782/2).

(2) Unlike the bill of exchange, there is no “acceptance” in a cheque. For this reason, it is provided that no acceptance may be made in respect of a cheque and that an acceptance notation placed on a cheque shall be deemed unwritten (TK 784).

(3) The cheque, which is by law structured as an order instrument, may be issued as a registered (nominative) instrument by means of an express notation on it and, unlike the bill of exchange (and the promissory note), may also be issued to bearer (TK 785). It is for this reason that specifying the payee is not a mandatory formal requirement in a cheque, and a cheque that does not indicate in whose favour it has been issued is deemed to be payable to bearer (TK 785/3)

(4) While the non-payment of a bill of exchange (and of a promissory note) at maturity gives rise only to certain consequences in terms of civil liability, the dishonour of a cheque presented in time has additionally been made subject to an administrative sanction. (Çek K 5/1)

(5) Moreover, since the cheque, unlike other negotiable instruments, is in principle not a means of credit but a means of payment, it is presumed that the cheque was issued for the purpose of performing a debt. For this reason, the person alleging the contrary of this presumption, namely that the cheque was given for a purpose other than payment, bears the burden of proving it.

§ 3 FEATURES THAT THE CHEQUE SHARES WITH SIMILAR COMMERCIAL INSTRUMENTS

In the Turkish Commercial Code, the matters specific to the cheque are regulated in the third part concerning cheques; by contrast, in order to avoid unnecessary repetition, in matters where the cheque shares the same nature as the bill of exchange, the Code has confined itself merely to cross-references. Which provisions relating to the bill of exchange are to be applied to the cheque is set out in detail in Article 818.⁷ Owing to the matters in which the cheque resembles the bill of exchange, the features of the bill of exchange have also found application in the cheque.

§ 4 LEGAL NATURE OF THE DISHONOURED CHEQUE

I- The Dishonoured Cheque

A. In General

Under the Cheque Law, certain conditions must come together in order to be able to speak of a dishonoured cheque. – First of all, and above all, there must exist a cheque meeting all the formal requirements (TTK 780, 781); secondly, this cheque must have been presented to the drawee bank within the presentment period (TTK 796). – The third point is that, at the moment of this presentment, the funds (TTK 783) in the cheque account at the drawee bank are wholly or partly lacking. Fourthly, this fact must be written on the cheque by the bank (ÇK 7/4)⁸

1. Existence of a Formally Complete Cheque

For an instrument to be characterised as a “dishonoured cheque in law”, it must first of all be deemed a cheque under Articles 780-782 of the Turkish Commercial Code. Indeed, where an instrument is not deemed a “cheque” because it does not bear even one of the mandatory or alternatively mandatory elements prescribed by the Turkish Commercial Code, either at all or in the form prescribed by the legislator, there can be no question of a “dishonoured cheque”. In such cases, the drawee bank should write on the instrument, as the reason for non-payment, not the absence of funds but the lack of one of the elements.⁹

Another condition for creating a valid cheque is that no element which the law does not permit to be written on a cheque has been written on it. In other words, where an element not permissible by law has been written on the cheque, for example where payment of the cheque amount has been made subject to a condition (such as “pay upon delivery of the goods sold” or “pay upon delivery of the leased property”), the instrument is not deemed a cheque, since this is contrary to the mandatory element that payment must be unconditional.¹⁰

2. Absence of Funds for the Cheque “at the Moment of Presentment”

When the cheque is presented to the drawee bank, the account to which the cheque belongs must hold funds equal to the cheque amount.

The absence of funds may stem from many causes:

• The most commonly encountered classic form of lack of funds is that the account does not hold enough money to make the payment. Even if the uncovered portion is very small, the result does not change.¹¹

• The fact that the person issuing the cheque (the drawer) has money at the drawee bank, and even at the same branch, but in another account rather than in the cheque account, does not affect the status of lack of funds. The cheque is still dishonoured. Unless the bank has been given authority to make a transfer between accounts (virman).¹²

• A cheque drawn on an account opened in the name of a fictitious (imaginary) person may also be dishonoured.¹³

• Where the cheque account has been closed before presentment, the cheque will be dishonoured.¹⁴

• Where an “enforcement attachment” has been placed on the drawer's cheque account with the drawee, the cheque may be dishonoured.¹⁵

Where part of the funds for the cheque amount is held in the cheque account, the existence of partial payment of the cheque is accepted. The authorised holder cannot refuse partial payment (TK.818/I-h; TK.621/II).

However, even in cases where the account holds no funds at all, or only partial funds, for the cheque amount, where the cheque amount will be paid to the holder in full because of the statutory guaranteed amount that the drawee bank is obliged to pay to the holder, the cheque is not deemed a dishonoured cheque. Indeed, this point is confirmed by paragraph 3/2 of the Cheque Law, which provides that the “no funds” (karşılıksızdır) procedure shall be carried out limited to the uncovered portion of the cheque amount, excluding the amount that the drawee bank is legally obliged to pay to the holder. However, it should not be forgotten that, where the cheque is not presented to the drawee bank within five years from the printing date written on it, the drawee bank's liability for the statutory guaranteed amount will come to an end (ÇK.md. 3/9).¹⁶

3. Presentment of the Cheque to the Bank within the “Presentment Period”

Paragraph 5 of the provisional article added to Cheque Law No. 5941 by Law No. 6273 provides that, until 31.12.2017, the presentment of post-dated cheques to the drawee bank for payment before the date of issue written on them shall be invalid. Accordingly, the cheque must have been presented to the drawee bank for payment within the statutory presentment period calculated according to the date of issue written on it. For this reason, since early presentment of the cheque is invalid, the bank returns the cheque to the holder without carrying out any procedure on it.¹⁷ Case law on this matter has also been established by the decisions of the high court.¹⁸

Another condition for carrying out the “no funds” procedure on a cheque is that the cheque has been presented to the drawee bank or to the clearing house within the periods prescribed in the provision of TTK m.796.¹⁹ When the periods set out in this part of the Law are calculated, the day on which they begin is not counted (TTK 817). Therefore, the day following the date on which the cheque was issued must be taken into account in calculating the presentment period. Where the presentment of the cheque and its protest, or the making of an equivalent determination, within the periods fixed by law has not been carried out owing to an insurmountable obstacle such as the legislation of a State or any force majeure, the periods fixed for these acts are extended. The holder is obliged to notify his own endorser of the force majeure without delay and to record this notice on the cheque or on the allonge, writing the place and date beneath it and signing it. The provisions of Article 723 also apply here. After the force majeure has ceased, the holder is obliged to present the cheque for payment without delay and, where necessary, to have a protest or an equivalent determination made. If the force majeure continues for more than fifteen days from the day on which the holder notified the preceding debtor of this cause, provided that this occurs before the expiry of the presentment period, he may exercise the right of recourse without any need for presentment of the cheque or for an equivalent determination. Facts relating solely to the holder, or to the person whom he has entrusted with presenting the cheque, drawing up the protest or having a determination of the same nature made, are not deemed force majeure. (TTK 811).

II. Procedures to Be Carried Out by the Drawee Bank in the Event of Non-Payment of the Cheque

Article 3 of the Cheque Law, entitled “Presentment, payment, determination that the cheque is uncovered and late-payment penalty”, provides: (1) A cheque for which funds are available shall be paid, when presented to any branch of the drawee bank where the account is held, after the holder's tax identification number, if any, has been ascertained. However, where the cheque is presented to a branch other than the branch where the account is held, it shall be paid after that branch has enquired about the funds. (2) The “no funds” procedure shall be carried out limited to the portion of the cheque amount that cannot be covered, excluding the amount that the drawee bank is legally obliged to pay to the holder.

Banks are under an obligation to pay valid cheques that are presented in time and for which funds are available. If there are no funds for the cheque, the bank has no obligation to pay either. For various other reasons as well – a stop-payment order, an interim injunction, a pledge or precautionary attachment on the account, etc. – banks do not pay even cheques for which funds are available, and return them to the holder after writing the reason for non-payment on the back of the cheque. With regard to cheques bearing the “no funds” annotation, the Cheque Law has imposed various obligations on banks under threat of penalty – a warning to the drawer to rectify; notification to the Central Bank of the Republic of Turkey (T.C Merkez Bankası); notice to the public prosecutor's office; not opening cheque accounts for, and not issuing cheque books to, prohibited persons; paying dishonoured cheques up to a certain amount. The drawee bank must write the date of presentment of the cheque, as day and hour, on the cheque and on the account card, and thus, where money is deposited into the account on the same day, must document, again by indicating the hour, that the money was not in the account at the moment of presentment. This obligation of the drawee bank exists not only where the cheque is presented to the branch of the bank at which the account was opened, but equally where it is presented to any other branch and the availability of funds (provision) is enquired about.²⁰

The presentment periods applicable to the cheque are set out in Article 796 of the Turkish Commercial Code.

(1) A cheque payable at the place where it was issued must be presented to the drawee within ten days, and a cheque payable at a place other than the place where it was issued must be presented within one month.

(2) A cheque issued in a country other than the country in which it is payable must be presented to the drawee within one month if the place of issue and the place of payment are on the same continent, and within three months if they are on different continents. In this respect, cheques issued in a European country and payable in a country with a Mediterranean coastline, and likewise cheques issued in a country with a Mediterranean coastline and payable in a European country, are deemed to have been issued and made payable on the same continent.

(3) The periods set out in the first and second paragraphs begin on the day following the date of issue written on the cheque.

In relation to presentment periods, determining the concept of the “same place” is not always easy. In particular, it must be determined how the concept of the same place is to be treated with regard to districts located within metropolitan municipality boundaries. Since the boundaries of metropolitan municipality areas have been set as the provincial administrative boundaries by Law No. 6360, all of the districts located within metropolitan municipality boundaries will have to be characterised as the same place. For this reason, the districts of Yakutiye and Palandöken, or of İspir and Tortum, located within the boundaries of the Erzurum Metropolitan Municipality, are characterised as the same place.²¹

§ 5 THE CHEQUE HOLDER'S RIGHT OF RECOURSE

The drawer, the endorsers and the guarantors (avalists) have all, in a sense, guaranteed to the right-holders coming after them that the cheque will be paid. It is precisely for this reason that the legislator has granted the holder a right of recourse against all liable persons in respect of cheques which, although presented in time, are not paid owing to the lack of funds. (TK 808 et seq.). The recourse debtors other than the drawer who, recourse having been taken against them in that capacity, have paid the cheque amount (voluntarily or through legal action or enforcement proceedings) also have the same possibility. (TK 818/1-(1),726). In this case, the recourse debtors are held liable, as joint and several debtors, towards the holder who takes recourse against them. (TK 818/1-(k),724). Accordingly, the holder may take recourse against any one, some or all of these persons together without being bound by the order in which they became indebted under the cheque (TK. 724/2), and taking recourse against only one of them does not – provided that this is within the limitation period – result in the loss of the right of recourse against the other debtors or against those coming after the person first proceeded against (TK 724/4). Any of the liable persons who has paid the cheque within the scope of the right of recourse likewise has a right of recourse against those preceding him. (TK 724/3)²²

Of course, the person in possession of the cheque must be the authorised holder. After a cheque payable to bearer has been presented to the bank, it cannot be transferred to another person by hand delivery without endorsement. A person who is not in the chain of endorsements after the cheque has been presented to the bank is not an authorised holder.²³

I. In General

The exercise of the right of recourse depends on a number of “substantive and formal conditions” coming together. First, the right of recourse must arise. This right must arise so that it can be exercised. The exercise of the right that has arisen has, in turn, been made subject to certain formal conditions.²⁴ In our opinion, since some of the formal conditions will at the same time be regarded as means of proof, they also have a number of functions.

A. Legal Conditions for the Exercise of the Right of Recourse

1.Substantive Conditions

We can examine the substantive conditions in two parts, namely for ordinary cheques and for cheques for account only (mahsup çekleri).

a) For Ordinary Cheques

For ordinary cheques, the substantive condition for the exercise of the right of recourse is the “non-payment” of the instrument. Where the cheque, although presented “within the period”, is not paid in whole or in part, the substantive condition for the holder's exercise of the right of recourse is fulfilled (TTK 808)²⁵

b) For Cheques for Account Only

For a cheque for account only, the situations constituting the substantive conditions for the exercise of the right of recourse are as follows:²⁶

(aa) In a cheque that is to be credited to an account, where the drawee has gone bankrupt, or has suspended its payments even if this has not been established by a judgment, or any enforcement proceedings brought against it have been fruitless, the payment not having been made when the holder requested payment of the cheque amount in cash (TTK 806);

(bb) In a cheque issued to be credited to an account, it having been proved that the drawee has refused to credit the cheque amount to the account unconditionally as a claim (TTK 807);

(cc) It having been proved that the clearing house at the place of payment where the cheque issued to be credited to an account was presented has declared that this cheque is not capable of being set off against the holder's debts. (TTK 807)

2. Formal Conditions

Article 808 of the Turkish Commercial Code refers to the non-payment of a cheque presented in time and to the fact that non-payment is established in three ways. These are: by a protest, which is accepted as an official document; by a dated declaration of the drawee written on the cheque indicating the day of presentment; and by a dated declaration of a clearing house establishing that the cheque, although delivered in time, has not been paid. Where these situations exist, the formal conditions for the exercise of the right of recourse are fulfilled.

a) Establishment of the Situation by a Deed of Protest

The non-payment of the cheque may be established by protest, as with promissory notes and bills of exchange (TK. 808/I-a). By virtue of the reference in Article 818 of the Commercial Code, the provisions on the protest of bills of exchange also apply to cheques. In this respect, protests concerning the non-payment of cheques (protest for non-payment) are the same as those for bills of exchange in terms of form and content.²⁷

b) Establishment of the Situation by the Drawee's Declaration

The non-payment of the cheque, that is, the fact of refusal to pay, is established by a dated declaration written on the cheque by the drawee, also indicating the day of presentment (Vorlegunsbeschenigung, declaration of presentment) (TTK 808/I/b). This declaration of the drawee produces the same result as a protest.²⁸ Here, unlike a protest, what is involved is not an official document but merely a determination (a determination made by the drawee) (Privaturkunde). The “declaration of presentment” confirms the facts that the instrument “was presented” and “was not paid”. This declaration must be “in writing”, and it must be “signed” at the bottom. Merely affixing a stamp is not sufficient. The declaration must also necessarily indicate “the date on which the cheque was presented” to the drawee. It is not sufficient to write that the cheque was presented for payment in time. The signature under the declaration must have been affixed by an authorised officer of the bank. The declaration shall be written “on the cheque” (TTK 808/b). In this respect, there is no difference between using the front or the back of the cheque. However, the Cheque Law states that the declaration in question is to be written on the back of the cheque. The Cheque Law has the character of a “special law” in relation to the Turkish Commercial Code.²⁹

c) Establishment of the Situation by the Clearing House's Declaration

The presentment of a cheque to a clearing house is equivalent to presentment for payment (TTK 798). The authorised holder delivers the cheque to the clearing house, and the non-payment of the cheque may be established by the clearing house.

B. Scope of the Right of Recourse

By way of recourse, the holder may claim the unpaid amount of the cheque, the costs of the protest or of the equivalent determination and of the notices sent, other costs, and a commission not exceeding three per thousand of the cheque amount (TTK 810)

The recourse of a recourse debtor who has paid the amount of the instrument, after that payment, against the recourse debtor preceding him (Einlösungssrückgriff) is regulated by reference to Article 726 concerning bills of exchange (TTK 818/1/1)³⁰

C. Loss of the Right of Recourse

We have explained that the substantive and formal conditions required for the authorised holder to be able to exercise the right of recourse must be fulfilled. Where there is a deficiency in the substantive and formal conditions explained, the authorised holder will not be able to exercise the right of recourse. Since the holder's right of recourse will have lapsed, he will thereafter be able to make claims under the general provisions. For the cheque will then lose its specific character.

§ 6 CONSEQUENCES OF ISSUING A DISHONOURED CHEQUE UNDER THE CHEQUE LAW

The Cheque Law has not affected the legal consequences provided for in the Commercial Code in the event of drawing a dishonoured cheque; by contrast, the drawer must fulfil obligations such as returning the cheque books to all banks, not drawing new cheques and, if he wishes to pay the dishonoured cheque, paying 10% compensation and default interest.³¹ Endorsers bear no liability for the cheque compensation.³²

For a dishonoured cheque, in addition to a judicial fine, the court shall, pursuant to the provision of ÇK m. 5 fık.4, also order, as a security measure, a prohibition on issuing cheques and opening cheque accounts. However, where a decision imposing a prohibition on issuing cheques and opening cheque accounts has previously been given as a protective measure by the judge of the peace or the criminal judge at the investigation stage, or by the court at the prosecution stage, the court shall, in addition to the judicial fine, order the continuation of the prohibition on issuing cheques and opening cheque accounts as a security measure. In this case, where the cheque is dishonoured, the prohibition on issuing cheques and opening cheque accounts as a security measure is imposed at the investigation stage upon the request of the public prosecutor (C. savcısı), and at the prosecution stage by the court of its own motion.³³

The Cheque Law provides for the mandatory return of cheque books in the event of a dishonoured cheque being drawn – whatever the reason may be. The fact that the drawer obtains the right to draw cheques again by exercising the right of rectification cannot be a reason for not returning the cheque books. Banks may, if they wish, open a new cheque account for, and issue cheque books to, customers who have returned their cheque books but who, because they have exercised the right of rectification, are once again in a position to draw cheques – just as, indeed, in the case of drawing a dishonoured cheque – or, if they wish, not deeming it appropriate to take on risk again, they may refrain from issuing cheque books.³⁴ The bank must promptly notify the Central Bank that the drawer who has exercised the right of rectification has exercised that right. A bank that fails to fulfil this obligation may have to pay compensation to the drawer.³⁵

Where, while the proceedings against the person who drew the dishonoured cheque are pending, he pays the cheque amount and its accessories and the case is discontinued, or where, after the case has become final, the judgment is set aside by the court with all its consequences, and the prohibition on issuing cheques and opening cheque accounts is not lifted (ÇK 6/1). Upon the lapse of 3 years from the date on which the penalty was executed, and in any event, the record concerning the prohibition on issuing cheques and opening cheque accounts is deleted ex officio by the Central Bank of the Republic of Turkey upon the lapse of ten years in any event from the date on which the record was entered, and this action is announced. Otherwise, the prohibition of the person who drew the dishonoured cheque continues; he cannot open a cheque account and cannot draw cheques.

The Cheque Law has also imposed liability on banks in the event of a dishonoured cheque being drawn. The drawee bank is obliged to pay the authorised holder, for each cheque leaf satisfying the substantive and formal requirements, an amount that changes from period to period.

The reason for the said payment is to induce banks, when opening a cheque account and issuing a cheque book, to carry out thorough research into the moral, social and economic situation of the account holder. Banks must be careful in particular with regard to joint-stock companies (AO) and limited companies (LO) with small capital, as well as foundations and associations. Çek K m.3, f. 2 is a concrete application of Çek K m.2,f.1 concerning diligence. This is because, in a cheque book of twenty leaves, the amount that the bank is obliged to pay may reach 20.000,00 TL. We may call this money that banks are obliged to pay “diligence warning money” (özen ikaz akçesi).³⁶

§ 8 CONSEQUENCES OF ISSUING A DISHONOURED CHEQUE UNDER THE TURKISH COMMERCIAL CODE

Article 783 of the Turkish Commercial Code contains a special provision on dishonoured cheques. Pursuant to the article: a person who issues a dishonoured cheque is, where the funds for the cheque with the drawee are wholly or partly lacking, obliged to pay ten per cent of the uncovered portion.

This compensation is a kind of “civil penalty”; for this reason, the holder having suffered loss and fault on the part of the drawer will not be required for it to be paid.³⁷

In addition, the drawer shall make good the loss suffered by the holder as a result.

Where the default interest that the holder may claim on the basis of Article 810 of the Turkish Commercial Code (TTK 810/1/b; Law No. 4489 on Amending Law No. 3095 on Statutory Interest and Default Interest, 1,2) does not cover the losses he has suffered, he is also entitled to claim the difference from the drawer (TTK 783/3). The holder's ability to claim damages in this way is likewise not dependent on the drawer being at fault. The only matter required is that the holder's loss can be linked to the drawer's drawing of a dishonoured cheque within the concept of an “adequate causal link”.³⁸

Where the cheque he has presented turns out to be dishonoured, the holder may pursue and collect by way of enforcement proceedings, from any debtor within the group of recourse debtors, the amount of the instrument that he may claim together with the additions set out in Article 810 of the Turkish Commercial Code. Likewise, in cases where the holder makes a claim against the drawer or has enforcement proceedings brought against the drawer, he is also entitled to request that the addition in paragraph 3 of Article 783 be made to this sum.³⁹

§ 9 COMPETENT COURT

Since we are examining the dishonoured cheque here from a legal (civil) perspective, we will not examine its competent courts from a criminal perspective. However, although in this study we examine the dishonoured cheque from a legal (civil) perspective, it is useful to examine the competent authorities for the prohibition on issuing cheques and having cheque accounts opened.

The prohibition on issuing cheques and having cheque accounts opened is imposed by the public prosecutor upon the request of the holder of the dishonoured cheque. In order to make matters easier for the holder, the Çek K has not confined itself to empowering a single prosecutor, but has conferred this power on several prosecutors and has granted the holder the possibility of applying to the prosecutor most easily accessible to him. Accordingly, in order to obtain a prohibition decision, the holder may apply to the prosecutor of the place (a) where the cheque was presented for collection, (b) where the branch at which the cheque account was opened is located, (c) of the domicile of the holder of the cheque account, or (d) of the domicile of the holder (Çek K m.5,f.1)⁴⁰

On the other hand, as long as the cheque retains its substantive and formal conditions, the holder will be able to make claims before the competent courts and enforcement offices to be determined within the framework of the jurisdiction rules applicable to proceedings specific to negotiable instruments. Since a cheque that cannot retain its substantive and formal conditions will thereby lose its character as a cheque, the courts and enforcement offices to be determined within the framework of the general jurisdiction rules will be competent.

§ 10 LIMITATION IN RESPECT OF CHEQUES

The holder's rights of recourse against the endorsers, the drawer and the other cheque debtors become time-barred upon the lapse of three years from the expiry of the presentment period (TTK 814/1).

The rights of recourse that one of the cheque debtors has against another become time-barred upon the lapse of three years from the date on which that cheque debtor paid the cheque or on which the cheque was asserted against him by way of legal action (TTK 814/2)

Undoubtedly, for this provision on the limitation period to be applicable, it is first of all a requirement that the holder has not lost his right of recourse. Therefore, in the event that the cheque – subject to the provision of TK 811/1 on force majeure – was not presented in time, or that, despite presentment – except for the provision of TK 811/4, likewise concerning force majeure, and a clause waiving protest (TK 818/1-(i),722) – non-payment was not established by one of the means provided for in TK 808, the right of recourse specific to cheques will also be lost, and consequently the three-year period here will no longer apply either.⁴¹

PART TWO

§ 11 LIFTING OF THE PROHIBITION ON ISSUING CHEQUES AND OPENING CHEQUE ACCOUNTS

The lifting of the prohibition on issuing cheques and opening cheque accounts is regulated in Article 6 of the Cheque Law. Where the conditions required by the article are fulfilled, the prohibition on issuing cheques and opening cheque accounts is lifted by the public prosecutor. The fact that the prohibition on issuing cheques and opening cheque accounts has been lifted is notified to the Central Bank of the Republic of Turkey in accordance with the procedures set out in the eighth paragraph of Article 5 and is announced.

a) At the trial stage, the court decides that the case be discontinued,

b) After the conviction judgment has become final, the court decides that the judgment be set aside with all its consequences.

I. Payment in Full of the Dishonoured Cheque Amount and Its Accessories

Where the uncovered cheque amount is paid in full together with interest calculated at the default interest rate applicable to commercial matters under Law No. 3095, running from the statutory presentment date according to the date of issue written on the cheque. (ÇK 6/1)

II. Where the Cheque Holder Withdraws His Request

The provision of the first paragraph also applies where the request is withdrawn by applying to the Chief Public Prosecutor's Office of the place where the decision imposing the prohibition on issuing cheques and opening cheque accounts was given (ÇK 6/2). In this case, the complainant holder's withdrawal of his request will produce the same result as if the cheque amount had been paid together with its accessories. Whether or not the cheque amount has been paid is of no importance.

III. After the Penalty Has Been Fully Executed and the Period Prescribed by Law Has Elapsed

The record concerning the prohibition on issuing cheques and opening cheque accounts is in any event deleted ex officio by the Central Bank of the Republic of Turkey upon the lapse of ten years from the date on which the record was entered, and this action is announced (ÇK 6/3).

§ 12 CONCLUSION

When the regulations on cheque legislation were being made, the aim was to prevent the drawing of dishonoured cheques by imposing heavy sanctions on those who draw cheques in the event that the cheque is dishonoured. However, when the regulation was made, the realities of the country were not sufficiently taken into account. The abolition, in the European Union harmonisation process, of the prison sentence applied to the drawing of dishonoured cheques increased the number of dishonoured cheques drawn further compared with the past and reduced the confidence felt in the cheque. The cheque has now taken on the character of an ordinary negotiable instrument, like the promissory note. As a result of this, the sanction of imprisonment for drawing dishonoured cheques has been reintroduced.

The reintroduction of the application of imprisonment for drawing dishonoured cheques will cause the act of drawing dishonoured cheques to decrease and will increase the sense of confidence in the cheque. In our opinion, although the application of imprisonment for dishonoured cheques is an appropriate practice, it will not solve the fundamental problems. Drawing a dishonoured cheque is a result. What is essential is the fact that cheques can easily be given by banks to their customers without the necessary diligence being exercised. A limited liability company with capital of 10.000,00 TL can be given 20 cheque leaves. Moreover, the fact that companies are very easy to establish, or that no serious criterion whatsoever is required for individuals to become taxpayers, may be counted among the other reasons. These reasons could be multiplied. Applying the said conditions very strictly may, of course, also produce negative consequences owing to the economic function of the cheque. At this stage, placing the conditions for the establishment of capital companies and ordinary partnerships, and for becoming liable to tax, on serious legal and economic foundations will reduce the act of drawing dishonoured cheques.

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