Rights of the Holder Who Misses the Presentation Deadline for a Check
Rights of the Holder Who Misses the Presentation Deadline for a Check
Entrance
Checks, one of the most commonly used negotiable instruments in commercial life, are regulated as a means of payment in the Turkish Commercial Code (TTK) . The presentation periods stipulated in the law are extremely important for the validity of a check and for the protection of the holder's rights. However, in practice, it is a common occurrence for the holder to be unable to present the check to the bank within the specified time due to various reasons.
So, what rights does the holder lose and what rights do they retain if the presentation deadline for a check is missed?
Legal Nature of Checks
A check is a negotiable instrument payable on demand, issued in accordance with Articles 780 et seq. of the Turkish Commercial Code. Its most fundamental characteristic is that it serves as a means of payment. Unlike promissory notes, checks do not have a maturity date; the legislator has designed the check means of payment, not a credit instrument .
What is the submission period?
Article 796 of the Turkish Commercial Code , checks are subject to different presentation periods depending on where they are issued.
- If the place of issuance and payment are the same: 10 days
- In different locations: 1 month
- In different countries: 3 months
These periods begin running from the date the check is issued.
Consequences of Missing the Submission Deadline
Missing the presentation deadline does not completely extinguish the holder's rights arising from the check; however, it does lead to some important consequences:
1. The right to present the check to the bank is lost
Even if the holder takes the check to the bank after the presentation period has expired, the bank is not obligated to make the payment.
2. The Right of Recourse for Drawers and Endorsers Ends
A check, like other negotiable instruments, creates joint and several liability. However, a holder who misses the presentation deadline loses the right to recourse against the endorsers and the guarantor.
3. Rights arising from the original debt relationship are reserved against the drawer
Although the recourse rights arising from the provisions of commercial law cease to exist, the rights based on the underlying relationship (for example, a receivable arising from a sales contract) continue to exist.
4. Can the holder initiate enforcement proceedings?
- After the presentation period has expired, it is not possible to pursue legal action through attachment specific to negotiable instruments.
- However, a lawsuit can be filed through the general attachment procedure or within the framework of general provisions.
The Holder's Protected Rights
A holder who misses the presentation deadline continues to have the right to exercise the following legal remedies:
- Right to Base Claims on Underlying Debt Relationship:
If the debt relationship that gave rise to the check (e.g., sale of goods, service contract) is valid, the holder can file a lawsuit based on that relationship. - Direct Claim Right Against the Drawer
: The drawer is the primary debtor responsible for the debt stated on the check. The expiration of the presentation period does not relieve them of their primary liability. - Filing a Claim for Unjust Enrichment
: If the holder has not received the check amount and the transaction that led to the issuance of the check is invalid, they can claim their debt based on the provisions of unjust enrichment. - According to general provisions
, a claim for debt can be filed even if the deadline for presenting the check has been missed.
Rights of the Holder Who Missed the Presentation Deadline According to Supreme Court Decisions
- The 11th Civil Chamber of the Supreme Court of Appeals, Case No. 2014/12205, Decision No. 2015/4512, stated:
"A holder who misses the presentation deadline loses their recourse rights arising from negotiable instrument law; however, they may rely on the underlying debt relationship against the drawer." - The 19th Civil Chamber of the Supreme Court of Turkey, Case No. 2016/7384, Decision No. 2017/5432, ruled:
“A check loses its status as a negotiable instrument after the presentation period has expired; however, the contractual relationship on which the claim is based continues.” - The Supreme Court's Grand Chamber, in its decision numbered 2020/324 E., 2021/675 K., stated:
"Even though a check whose presentation period has expired is not subject to the provisions of negotiable instruments, it can still be the subject of a debt collection lawsuit according to general provisions."
Problems Encountered in Practice
- Burden of Proof on the Holder: In lawsuits filed after the check presentation period has expired, the holder is responsible for proving the underlying debt relationship.
- Cancellation of Bill of Exchange Proceedings: When bills of exchange proceedings are initiated due to expired checks, the cases are prolonged due to objections.
- Loss of Commercial Reputation: Failure to present a check on time can damage the trust relationship for both the holder and the drawer.
- Banks' Responsibility: Failure of banks to make payments after the presentation period has expired increases the holder's hardship.
Legal Remedies for the Holder
1. Enforcement Proceedings through General Attachment
Even if the possibility of pursuing collection through bill of exchange is eliminated, the holder can still claim their debt through general attachment in accordance with Articles 42 et seq. of the Enforcement and Bankruptcy Law
2. Filing a Debt Collection Lawsuit
A claim for debt can be filed according to general legal provisions, based on the contract underlying the check .
3. Unjust Enrichment Lawsuit
If no transaction is made in exchange for the check and the check amount is not paid, the holder can file a lawsuit based on unjust enrichment.
4. Commercial Compensation Cases
It is possible to file a compensation claim for additional damages incurred as a result of the submission deadline being missed.
Recommendations for Protecting the Rights of the Holder
- The check must be presented as soon as possible.
- If payment is not received within the presentation period, immediate legal action should be initiated regarding the exchange of bills and services.
- If the deadline for submission has passed, preparations for filing a lawsuit should be made in accordance with general provisions.
- In Czech transactions, written contracts and supporting documents must always be used.
Proposed Solutions
- Legislative regulations could be enacted to extend the presentation periods in line with current commercial conditions
- Banks could be required to assume additional responsibilities to mitigate the losses incurred by holders of overdue checks.
- By widespread adoption of electronic checks and digital payment systems, the chances of missing presentation deadlines can be practically eliminated.
Conclusion
Failure to present a check within the specified period terminates the holder's recourse rights arising from commercial law. However, the holder may still rely on the underlying debt relationship against the drawer, pursue legal action through general attachment, or file a claim for debt or unjust enrichment.
The established jurisprudence of the Supreme Court prevents the holder who misses the presentation deadline from suffering a complete loss of rights and protects claims based on general provisions.
Therefore, the loss of rights for the holder who misses the presentation deadline for the check is not absolute; the possibility of collecting the debt remains if the correct legal procedures are followed.
About Post Author
