Enforcement Proceedings for a Check

Negotiable instruments are regulated under Articles 670-823 of the Turkish Commercial Code No. 6102. According to this law, negotiable instruments are listed in a limited number. Pursuant to the Turkish Commercial Code No. 6102, negotiable instruments consist of a bill of exchange (policy), a promissory note (bond), and a check. The enforcement of these instruments, which are regulated in a limited number by the law, is specifically addressed within the Enforcement and Bankruptcy Law. Since negotiable instruments are regulated under the Commercial Code, they are considered commercial transactions.

The significance of these instruments in commercial life arises from their use as a means of payment and credit. The most important distinction between negotiable instruments and other valuable papers lies in their negotiability. Due to their negotiability, they can be transferred and circulate in the market as valuable instruments. The debt in a negotiable instrument is independent of the underlying contract, meaning that it remains valid even if the contract itself is invalid. For these reasons, negotiable instruments, as a type of valuable paper, hold great importance in commercial life.

A check, pursuant to the Turkish Commercial Code, qualifies as a negotiable instrument and is one of the types of negotiable instruments, as stated.

The enforcement of checks, which are among the negotiable instruments of significant importance in commercial life, is also subject to a special regulatory framework. Under the heading “Seizure Specific to Negotiable Instruments” in the Enforcement and Bankruptcy Law, a specific enforcement procedure for negotiable instruments has been established.

In the Enforcement and Bankruptcy Law, the enforcement procedure specific to negotiable instruments is divided into two different methods: enforcement through seizure regulated under Articles 168-170b of the EBL (İİK), and enforcement through bankruptcy regulated under Article 171 and subsequent articles.

The enforcement of negotiable instruments can be carried out either through the coercive enforcement rules stipulated under the bankruptcy enforcement provisions of the law or through the general enforcement by seizure. However, for an enforcement proceeding to be pursued specifically as an enforcement through bankruptcy, the debtor must be a person subject to bankruptcy.

The check, as one of the negotiable instruments, is one of the most frequently used instruments in commercial life. It is regulated under Articles 780-818 of the Turkish Commercial Code.

According to Article 780 of the Turkish Commercial Code, for a check to be considered valid, it must contain the elements required by the law. Pursuant to Article 780 of the TCC:

(1) A check must:
a) Contain the word “check” in the text of the instrument, and if the instrument is written in a language other than Turkish, the equivalent term for “check” in that language.

b) An unconditional order to pay a specific sum,

c) The trade name of the payer, referred to as the “drawee,”

d) The place of payment,

e) The date and place of issuance,

f) The signature of the drawer,

g) (Added: 15/07/2016 – Law No. 6728/Article 70) The serial number provided by the bank,

h) (Added: 15/07/2016 – Law No. 6728/Article 70) The QR code.

(2) (Additional paragraph: 15/07/2016 – Law No. 6728/Article 70) Check holders can access information regarding the check account holder and the issuers of the check through the QR code on the check. Through the QR code:

a) The name, surname, or trade name of the check account holder,

b) If the check account holder is a merchant, the names, surnames, or trade names of the authorized persons registered in the trade registry,

c) The total number of banks where the check account holder has check accounts,

d) The number and total amount of checks issued by the check account holder that have not yet been presented to banks,

e) The number and total amount of checks issued and delivered to banks,

f) The number and total amount of checks paid upon presentation in the last five years,

g) The presentation date of the first check presented,

h) The presentation date of the most recent check presented,

ı) The presentation date of the most recent check paid upon presentation,

i) The number and total amount of unpaid checks that were marked as “insufficient funds” in the last five years,

j) The number and total amount of checks that were initially marked as “insufficient funds” in the last five years but were later paid,

k) The presentation date of the most recent check that was marked as “insufficient funds” in the last five years,

l) Whether the check account holder is subject to a restriction on opening a check account, and if so, the date of the restriction decision,

m) Whether there is a precautionary measure recorded for each check leaf,

n) If the check account holder is a merchant, whether they have been declared bankrupt, and if so, the date of the bankruptcy decision.

This information is made available to third parties without requiring the consent of the check account holder or the endorser.

(3) (Additional paragraph: 15/07/2016 – Law No. 6728/Article 70) The QR code scanning and information-sharing system, which enables access to the data specified in the second paragraph, is established by the Risk Center of the Banks Association of Turkey, in accordance with the additional Article 1 of Law No. 5411. The Risk Center is authorized to share the data in the system with the company with which it exchanges information pursuant to the eleventh paragraph of additional Article 1 of Law No. 5411. If this authority is exercised, the system may be established within the company to which the information is shared.

(4) (Additional paragraph: 15/07/2016 – Law No. 6728/Article 70) The definition and content of the MERSIS number and the QR code to be included on the check, as well as the procedures and principles for the implementation of this article, shall be determined by a communiqué jointly issued by the Ministry of Customs and Trade and the Undersecretariat of Treasury.

Cases in Which Enforcement Proceedings Can Be Initiated for a Check

For enforcement proceedings to be initiated for a check, the check must be in a state of insufficiency. In other words, if a check presented to the bank for payment cannot be paid due to insufficient funds in the account, it will be marked as “insufficient funds” on the back of the check, thereby making it a dishonored check. In the event that the check presented to the relevant financial institution becomes a dishonored check, the creditor can initiate an enforcement procedure specific to negotiable instruments to collect the amount of the check.

Presentation Periods for the Check to the Relevant Financial Institution

If the check is payable at the place where it was issued, it must be presented to the relevant institution within 10 days.
If the check is payable at a place other than the place where it was issued (within the same country), it must be presented to the relevant institution within 1 month from the date of issuance.
If the check is payable in a different country than the place where it was issued: If the countries are in the same continent, it must be presented to the relevant institution within 1 month from the date of issuance; if the countries are in different continents, it must be presented within 3 months from the date of issuance.

The presentation periods for a check to the bank are crucial in order to initiate enforcement proceedings specific to negotiable instruments. That is to say, if the check is not presented to the relevant institution by the holder within the specified time frame, once the presentation period has passed, the creditor will not be able to initiate a non-judicial enforcement procedure for the negotiable instrument.

Statute of Limitations for Enforcement Proceedings for a Check

The statute of limitations for initiating non-judicial enforcement proceedings specific to negotiable instruments related to a check is regulated under Article 814 of the Turkish Commercial Code (TCC). According to Article 814 of the TCC:

(1) The holder’s right to claim against the endorsers, the drawer, and other check debtors expires three years after the end of the presentation period.

(2) The right of a check debtor to claim against another check debtor expires three years after the date the check was paid by the debtor or presented against them through legal action.

According to the provisions of the law, non-judicial enforcement proceedings specific to negotiable instruments must be initiated within 3 years after the check is presented to the bank. Since this 3-year period is a time-barred period, if 3 years pass after the check is presented to the bank, the check will lose its status as a check, and it will no longer be possible to initiate non-judicial enforcement proceedings for its collection under the negotiable instruments law.

Competent Enforcement Court for Enforcement Proceedings for a Check

If enforcement proceedings for a check are initiated within the specified period, it is necessary to determine the competent enforcement office. The competent enforcement offices for enforcement proceedings specific to negotiable instruments related to a check are as follows:

The enforcement office at the place where the check was issued (place of issue),
The enforcement office at the location of the bank where the check is presented,
The enforcement office at the debtor’s place of residence may also be considered as the competent enforcement office.

What the Holder Can Request in Enforcement Proceedings for a Check

The holder who presents a check issued by the payee to the relevant bank within the specified time but is unable to receive payment due to insufficient funds in the account, thereby making the check dishonored, has the right to initiate non-judicial enforcement proceedings specific to negotiable instruments for the dishonored check. In the initiated enforcement proceedings, the holder may request the following:

The amount of the dishonored check,
10% of the amount of the dishonored part of the check as check compensation (only the payee is liable, and the endorser is not responsible for check compensation),
A check commission not exceeding 3/1000 of the amount written on the check,
The accrued late interest during the period from the presentation of the check to the relevant bank until the initiation of the enforcement proceedings.

Kambiyo senetlerine özgü ilamsız icra yoluyla çek için takip başlatan hamil tarafaından icra dairesinden talep edilebilecektir.

Other Legal Remedies That Can Be Pursued for a Dishonored Check

If the check issued by the payee is presented to the relevant bank by the holder within the specified time, and the amount written on the check is not paid, resulting in the check becoming dishonored, the holder has the right to file a complaint. Under our legal system, issuing a partially or completely dishonored check constitutes the crime of “issuing a dishonored check.” Due to the fact that issuing a dishonored check is a criminal offense, the holder who presents the check to the bank within the prescribed time must file a complaint with the enforcement court within 3 months, starting from the presentation of the check to the bank. It should be noted that the 3-month period, which begins with the presentation of the check, is a time-barred period. Additionally, the holder filing the complaint must have presented the relevant check to the bank within the specified time frame. A complaint cannot be filed for a check that was not presented within the specified time, even if it is claimed to be a dishonored check.

If the conditions mentioned above are met, the holder can initiate enforcement proceedings specific to negotiable instruments. Referring to what has been explained in our article about non-judicial enforcement procedures specific to negotiable instruments:

Enforcement Proceedings for Negotiable Instruments

Payment Order

The holder (creditor) of the negotiable instrument who wishes to initiate enforcement proceedings specific to negotiable instruments at the enforcement office shall submit their request for enforcement to the competent enforcement office in accordance with the provisions outlined in Article 58 of the Enforcement and Bankruptcy Law (İİK). After the enforcement office’s director confirms that the negotiable instrument in question is indeed a negotiable instrument and that the maturity of the instrument has arrived, the director will issue a payment order to the debtor, who is responsible for the negotiable instrument, in accordance with Articles 168/1 and 171/1 of the İİK.

rticle 168 – (Amended: 18/2/1965-538/81)

If the enforcement officer finds that the document is a negotiable instrument and its maturity has arrived, they will immediately send a payment order to the debtor along with the copy of the instrument. This payment order will include the following:

(Amended: 2/7/2012-6352/33) The details that must be included in the enforcement request, except for the creditor’s or the agent’s bank account number.
(Amended: 2/7/2012-6352/33) A notice to pay the debt and enforcement expenses to the bank account of the enforcement office written in the payment order within ten days.
If the document that the enforcement is based on does not have the qualities of a negotiable instrument, the debtor must file a complaint with the enforcement court within five days.
(Amended: 9/11/1988-3494/31) If the debtor claims that the signature on the negotiable instrument does not belong to them, they must clearly notify the enforcement court within five days with a written petition. Otherwise, the signature on the negotiable instrument will be considered as having been made by them for the purpose of the enforcement proceedings. If they unjustly deny their signature, they will be penalized with a fine of ten percent of the amount of the debt subject to the enforcement based on that instrument. If they do not bring a decision from the enforcement court accepting their objection, the enforcement proceedings will continue.
(Amended: 6/6/1985-3222/21) If the debtor claims that they are not liable, that the debt has been paid, postponed, or has expired due to limitation, or if they raise an objection to jurisdiction with the reasons, they must notify the enforcement court with a petition within five days. If the debtor does not bring a decision from the enforcement court accepting their objection, the enforcement proceedings will continue.
(Amended: 17/7/2003-4949/45) If no objection is made and the debt is not paid, a notice to provide a property declaration according to Article 74 within ten days will be issued. If the debtor objects and the objection is rejected, they will be required to make a property declaration according to Article 75 within three days, and failure to do so will result in imprisonment. If the debtor fails to declare their property or makes false declarations, they will be additionally punished by imprisonment. The last two paragraphs of Article 60 will also apply here.

Article 171 – (Amended: 18/2/1965-538/86)

The following is written in the payment order:

(Amended: 2/7/2012-6352/36) The records that must be included in the request for enforcement, excluding the creditor’s or their representative’s bank account number;
(Amended: 2/7/2012-6352/36) A warning to pay the debt and enforcement costs within five days to the bank account of the relevant enforcement office indicated in the payment order;
A warning to notify the enforcement office within five days with an additional petition copy, stating any objections or complaints regarding the negotiable instrument and debt, along with the reasons, to be notified to the other party;
A warning that if the debt is not paid or objected to within five days, the creditor may request the debtor’s bankruptcy from the commercial court.

The last two paragraphs of Article 60 are also applicable here.

The debtor has the right to object to the enforcement proceeding initiated against them. The debtor can object to the enforcement proceeding by applying to the competent enforcement court within 5 days from the service of the payment order. The objection can be made in two ways: one being an objection to the signature, and the other being an objection to the debt. If the debtor does not object to the enforcement court within the prescribed period, the enforcement proceeding becomes final, and the debtor must pay the debt based on the negotiable instrument within 10 days. Likewise, if the debtor does not object to the payment order, they will be required to make a statement of assets to the enforcement office within 10 days following the finalization of the enforcement proceeding. If the debtor does not make a statement of assets within this 10-day period after the finalization of the enforcement, they will be subjected to imprisonment. An objection made within 5 days from the notification of the payment order will release the debtor from having to make a statement of assets and can prevent the creditor from proceeding with the sale of assets or payment of money from the enforcement office to the creditor. (Article 169 of the Enforcement and Bankruptcy Law: “The debtor, according to paragraph 5 of Article 168, notifies their objection to the debt in writing to the enforcement court. This objection does not stop other enforcement proceedings except for the sale.”)

Objection to the Payment Order

Objection to the payment order will be made by the debtor through a written petition to the enforcement court. If the enforcement court examines the substance of the objection and, upon the request of the debtor to suspend the enforcement proceedings, the court may decide to halt the enforcement proceedings until the examination of the objection is completed. If the enforcement court rejects the debtor’s objection to the payment order, the debtor must submit a declaration of assets within 3 days starting from the notification of the decision. Otherwise, the debtor will be subject to imprisonment for failure to comply.

As stated, the objection to the payment order may be made in the form of an objection to the debt or an objection to the signature in accordance with Articles 169/a and 170 of the Enforcement and Bankruptcy Law (İİK).

Article 169/a – (Added: 18/2/1965-538/83)

(Amended first paragraph: 17/7/2003-4949/46) The enforcement court judge shall summon both parties to a hearing within thirty days at the latest to investigate the reasons for the objection. At the conclusion of the hearing, if the debtor proves that the debt does not exist, has been paid, or is extinguished through an official document or a signed acknowledgment, the objection will be accepted. If the issue concerns an objection to jurisdiction, the court will give its decision even if the parties fail to appear.

(Amended second paragraph: 17/7/2003-4949/46) If the enforcement court judge, based on the documents submitted by the debtor along with the objection petition, concludes that the debt has been paid or extinguished, or that the note has expired according to the text of the instrument, or that the debtor is not liable, or that the enforcement office is not authorized, the judge may decide to temporarily suspend the enforcement proceedings until a decision is made on the substance of the objection.

1288

(Amended: 9/11/1988-3494/32) If the signature under the document presented by the debtor is denied by the creditor, the enforcement court judge, after conducting an examination according to the procedure in Article 68/a, and if the judge concludes that the signature belongs to the creditor, will accept the debtor’s objection and impose a fine on the creditor in the amount of 10% of the value or amount related to the document in question. If the creditor fails to attend the hearing as required by the first paragraph, the enforcement court judge will decide to temporarily suspend the enforcement proceedings regarding the disputed part of the debt. Following this, the creditor may request a hearing before the enforcement court within six months at the latest and prove that the signature on the receipt is not theirs, in which case the court may decide to continue the enforcement proceedings. If the enforcement court decides that the signature does not belong to the creditor, it will fine the debtor in the amount of 10% of the value or amount related to the document in question.

The enforcement judge, if the debtor raises an objection based on the statute of limitations, will assess this objection according to the date on the negotiable instrument provided by the creditor. If the creditor fails to prove that the statute of limitations has been interrupted or suspended with an official document or a signed acknowledgment, the judge will accept the objection; otherwise, the objection will be rejected.

If the objection is accepted, the enforcement process will stop. However, the creditor retains the right to file a lawsuit according to general provisions.

If the creditor files a lawsuit in the general court, the collection of the denial compensation and the fine will be postponed until the conclusion of the case. If the creditor wins the case, the denial compensation and the fine previously imposed will be lifted.

(Additional paragraph: 9/11/1988-3494/32) (Amended first sentence: 17/7/2003-4949/46) In case the debtor’s objection is accepted by the enforcement court on substantial grounds, the creditor, if acting in bad faith or with gross negligence, will be liable for compensation of at least 20% of the debt in question; if the enforcement is temporarily suspended, and if the objection is rejected, the debtor, at the request of the other party, will be liable for compensation of at least 20% of the debt. If the debtor files a negative determination or restitution lawsuit, or if the creditor files a lawsuit in the general court, the collection of the compensation ordered will be postponed until the end of the case. If the case results in favor of the debtor, the previously ordered compensation will be annulled.

(Amended final paragraph: 2/3/2005-5311/13) Filing an appeal against the rejection of the objection does not stop any enforcement actions. However, if the debtor provides a guarantee according to Article 33, paragraph 3, the enforcement will be suspended.

b) Objection to the signature:

Article 170 – (Amended: 9/11/1988-3494/33)

The debtor, according to paragraph 4 of Article 168, notifies the enforcement court with a petition stating that the signature on the negotiable instrument does not belong to them. This objection does not stop enforcement actions, except for the sale.

Before the hearing, if the enforcement court judge, after reviewing the debtor’s petition and attached documents, deems the objection serious, they may decide to temporarily suspend the enforcement process, without notifying the creditor, until the decision regarding the objection is made.

(Amended third paragraph: 17/7/2003-4949/47) After reviewing the case according to paragraph 4 of Article 68/a, if the enforcement court judge determines that the denied signature does not belong to the debtor, they will accept the objection. If the objection is accepted, the enforcement will stop. The creditor retains the right to file a lawsuit according to general provisions. If the denied signature is found to belong to the debtor and the enforcement is suspended based on the objection in the second paragraph, the debtor will be liable for a denial compensation of at least 20% of the debt in question and a fine equal to 10% of the debt in question, and the objection will be rejected. If the debtor files a negative determination or restitution lawsuit, the collection of the compensation and the fine will be postponed until the conclusion of the case, and if the case results in favor of the debtor, the previously ordered compensation and fine will be annulled.

If the debtor wishes to object to the signature on the document, claiming that it does not belong to them, they must clearly state this in a petition submitted to the competent enforcement office. If the petition does not explicitly state the objection to the signature, the court will accept that the signature on the document belongs to the debtor and will reject the objection. It should be noted that an objection to the signature by the debtor will not stop any enforcement actions other than the sale.

If the objection is accepted by the court, the court will decide to suspend the enforcement process, and the debtor’s rights under general provisions will be preserved. If the objection is rejected by the court, the debtor will be ordered to pay a denial compensation of at least 20% of the debt and a fine equal to 10% of the debt.

The debtor can only stop the payment of the denial compensation and the fine by filing a negative determination or restitution lawsuit in the general courts under general provisions regarding the debt. If the objection made by the debtor to the competent enforcement court is accepted, and the creditor is acting in bad faith or with gross negligence, the court will order a denial compensation of at least 20% of the debt in question and a fine equal to 10% of the debt. If the creditor appeals the enforcement court’s decision to the general courts, the payment of the amounts will be suspended until the conclusion of the case.

If the debtor wishes to object to the debt in the enforcement court, they must clearly state in the objection petition that they are objecting to the debt. The subject of the objection to the debt may include the non-existence of the debt, the expiration of the debt due to the statute of limitations, the postponement of the debt, the payment of the debt, or the lack of jurisdiction of the enforcement office. As with the objection to the signature, the court may rule on the denial compensation and fine for the debtor or creditor following the decision.

Article 172 of the Enforcement and Bankruptcy Law regulates the procedure for objections made against enforcement through bankruptcy specific to negotiable instruments. According to this article, an objection to enforcement via bankruptcy specific to negotiable instruments can be made within 5 days from the notification of the payment order to the debtor, and it will be examined by the competent enforcement office, which will forward the objection to the competent commercial court that handles bankruptcy cases. The objection must be made through a written petition. If the objection is not made through a written petition, the objection will be rejected without examining its merits, and the enforcement process via bankruptcy specific to negotiable instruments will become final.

If the objection is made in accordance with the procedure, it will suspend the enforcement process. If the debtor objects to enforcement via bankruptcy specific to negotiable instruments, the creditor can file for bankruptcy in the commercial court. If the objection of the debtor is found to be unfounded, the court will decide to declare the debtor’s bankruptcy. In order for the debtor to avoid the bankruptcy decision, the debtor must pay the debt based on the negotiable instrument, including interest and expenses, to the creditor, and deposit the amount of the debt into the court’s treasury as per the court’s order.

Article 172 – (Amended: 18/2/1965-538/87)

The debtor who wishes to object or complain against the payment order must notify the enforcement office within five days from the notification of the payment order, submitting a petition with the reasons for the objection or complaint, along with one extra copy of the petition to be served on the other party. A copy of this petition shall immediately be served to the creditor.

Article 173 – (Amended: 18/2/1965-538/88)

If the debtor does not pay the debt or file an objection or complaint within five days, the creditor may request the commercial court to decide on the debtor’s bankruptcy, using the copy of the payment order as evidence.

(Added: 9/11/1988-3494/35) When the bankruptcy process becomes final, it is announced according to the procedure in the second paragraph of Article 166. Within fifteen days from the announcement of the bankruptcy request, other creditors can intervene in the case or object, claiming that there is no condition warranting bankruptcy and asking the court to dismiss the request.

The court will bring the case file and, after examining it through a simple trial procedure, if it finds that the debt has not been paid and no objection or complaint has been made, it will order the payment of the debt, including interest and enforcement costs, or the deposit of that amount in the court’s treasury within seven days, in accordance with Article 158. If this order is not complied with, the court will decide on the debtor’s bankruptcy. However, if the debtor submits an official document proving payment after the period specified in the payment order has expired, the request for bankruptcy enforcement and the bankruptcy case will be dismissed.

The debtor may file a late objection under Article 65 with the commercial court. If the court finds the excuse valid, it will decide on the bankruptcy case in accordance with Article 174.

b) Objection or complaint:

Article 174 – (Amended: 18/2/1965-538/89)

The creditor may request the commercial court to lift the debtor’s objection and complaint and decide on the debtor’s bankruptcy. The court will decide on the bankruptcy case in accordance with Article 158.

B) Complaint Against the Payment Order

In the case of a claim based on a negotiable instrument, the creditor has the opportunity to file a complaint against the payment order sent in the course of the enforcement based on the negotiable instrument in the event of actions contrary to the law by the enforcement and bankruptcy offices. The provisions related to complaints in enforcement or bankruptcy proceedings based on negotiable instruments are regulated under Article 171 of the Enforcement and Bankruptcy Code (İİK). According to Article 170a of the İİK – (Added: 18/2/1965-538/85):

The debtor can argue that the creditor does not have the right to enforce under these provisions by filing a complaint pursuant to Article 168, paragraph 3.

In the case of a complaint or objection filed within the prescribed period, the enforcement court can, ex officio, annul the enforcement proceeding if it finds that the negotiable instrument does not have the characteristics required by this chapter, or that the creditor does not have the right to enforce under the rules of negotiable instrument law.

(Added: 9/11/1988-3494/34) In any case, if the objection to the signature denial has been withdrawn or the debt has been partially or fully accepted, the provisions of this article shall not apply. The main provisions subject to complaint in enforcement proceedings based on negotiable instruments are regulated in Articles 16-18 and Article 22 of the Enforcement and Bankruptcy Code (İİK). According to this, a complaint may be made in cases where an action that is contrary to the law or inappropriate to the case has been taken by the enforcement and bankruptcy offices, a right has not been fulfilled, or a right has been delayed. The complaint period is 7 days according to Article 16/1 of the İİK. However, there are exceptions regarding the time limits in enforcement proceedings based on negotiable instruments. In complaints asserting that the instrument subject to enforcement is not a negotiable instrument, that the creditor is not the authorized holder of the negotiable instrument, or that the debtor is not the responsible party for the negotiable instrument, the complaint period is 5 days in the case of enforcement through bankruptcy proceedings based on negotiable instruments. Other reasons for complaint are subject to the time limits specified in other provisions of the İİK related to complaints.

Other and Common Provisions Applicable in Enforcement Proceedings Based on Negotiable Instruments

The other provisions to be applied in enforcement proceedings based on negotiable instruments are specified in Article 170/b of the Enforcement and Bankruptcy Law. (Added: 18/2/1965-538/85; Amended: 17/7/2003-4949/48)

The second, third, fourth, and fifth paragraphs of Article 61, as well as Articles 62 to 72, shall also apply to enforcement proceedings based on negotiable instruments, unless they contradict the provisions of this chapter. As seen in the article, the provisions of Articles 62 to 72 may be applied in enforcement proceedings based on negotiable instruments, provided they do not conflict with the relevant provisions of the law regarding negotiable instruments.

The common provisions that can be applied in enforcement proceedings based on negotiable instruments are outlined in Articles 176/a and 176/b of the Enforcement and Bankruptcy Law. According to these provisions, they may be applied as long as they do not contradict the provisions related to enforcement proceedings based on negotiable instruments. These provisions apply both in general enforcement proceedings and in enforcement proceedings based on negotiable instruments.

Article 176/a – (Added: 18/2/1965-538/92)

The enforcement office shall provide the creditor with a copy of the payment order in accordance with Articles 60 and 64.

The debtor shall be given a free and stamp-free document stating that an objection has been made.

Multiple Debtors:

Article 176/b – (Added: 18/2/1965-538/92)

If the debtor of a bill, promissory note, or an order instrument is more than one person, and all of them are subject to bankruptcy, the creditor must make the same request (seizure or bankruptcy) for all of them. In such cases, in the event of an objection by the debtor, the provisions of Articles 169, 169/a, 170, or 174 shall apply depending on the nature of the request.

If there is a person among the debtors being followed by a promissory note who is not subject to bankruptcy, and the creditor wishes to proceed with bankruptcy against those subject to bankruptcy and seizure against those who are not, the creditor must make two separate requests for enforcement. In this case, a certified copy of the promissory note is attached to one of the enforcement requests. The enforcement officer shall write on this copy that the original of the promissory note is in their possession.

2. Seizure

After the authorized holder (creditor) of the negotiable instrument applies to the enforcement office with a request for enforcement, the enforcement office will send a payment order to the debtor. Once the payment order is finalized, the debtor will be given a 10-day period to pay the debt. If the debtor fails to pay within this period, the creditor may request a seizure from the authorized enforcement office within one year. To request the seizure, the creditor must deposit the necessary expenses for the seizure with the authorized enforcement office (Enforcement and Bankruptcy Law, Article 59). After the request for seizure, the enforcement officer will begin the seizure procedures and prepare a seizure report according to the records specified in Article 102 of the Enforcement and Bankruptcy Law. This report will be sent to the creditor via a summons, and the debtor will be asked to notify any objections or complaints regarding the seizure within 3 days. If the enforcement officer cannot find any property to seize from the debtor, they will issue a certificate of inability to pay, and if the seized goods are insufficient to cover the debt, a temporary certificate of inability to pay will be issued.

3. Request for Sale

After the seizure made through the special enforcement procedure for negotiable instruments by the competent enforcement office, if the seized assets are not in the form of money, a request for sale must be made to the enforcement office by either the creditor or the debtor. This is because the debt can only be paid to the creditor with money that corresponds to the debt amount. When making the request for sale, similar to the seizure request, the expenses related to the sale will be borne by the creditor. The request for sale to the enforcement office must be made within 6 months for movable assets and within 1 year for immovable assets after the seizure process has been completed. Otherwise, the creditor may face the risk of losing their rights.

Example Court of Cassation Rulings Regarding Enforcement Proceedings for Checks

Court of Cassation General Assembly 2017/741 E., 2019/382 K.

“Jurisprudence Text”

COURT: Enforcement Court

Following the review of the “objection to jurisdiction and debt” request between the parties, the Antalya 3rd Enforcement (Civil) Court’s decision dated 16.12.2014, numbered 2014/958 E., 2014/1357 K., rejecting the objection was appealed by the debtor’s attorney, and the Court of Cassation 12th Civil Chamber’s decision dated 15.06.2015, numbered 2015/7208 E., 2015/16555 K., with the following reasoning:

“…The debtor, raising an objection to jurisdiction, argued that the jurisdiction should lie with the Adana Enforcement Directorate, as the place of issuance of the cheque in question was Adana, and filed an objection with the enforcement court. The court rejected the objection to jurisdiction, stating that, based on the Franchise Agreement submitted to the case, the parties had agreed that the courts and enforcement directorates of Antalya would have jurisdiction in disputes between the parties. Therefore, the court rejected the objection and the other objections as well.

For a bill of exchange-based enforcement proceeding, enforcement can be made at the place where the debtor resides (Article 6 of the Civil Procedure Code – HMK), at the enforcement office of the place of payment, i.e., where the drawee bank is located (Article 10 of HMK), and additionally, in accordance with Article 50/1 of the Enforcement and Bankruptcy Code (İİK), at the enforcement office where the cheque was issued.

Article 17 of the Civil Procedure Code (Law No. 6100), which regulates jurisdiction agreements, states that “Merchants or public legal entities may designate one or more courts as competent to resolve a dispute that has arisen or may arise between them. Unless otherwise agreed by the parties, the lawsuit shall only be filed in the courts designated by the agreement.”

In the present case, while the creditor relied on the Franchise Agreement dated 01/10/2013, the contract does not explicitly reference the cheques underlying the enforcement action. Therefore, the enforcement action cannot be conducted in the jurisdiction stipulated by the contract. As a result, the rejection of the objection based on the jurisdiction of the Antalya Enforcement Directorate was incorrect…”

The decision was overturned and sent back for re-examination. After the re-hearing, the court upheld the previous decision.

The decision of the General Assembly of the Court of Cassation

After the General Assembly of the Court of Cassation reviewed the case and it was understood that the resistance decision had been appealed in due time, and after reading the documents in the case file, the necessary deliberation was carried out:

The request pertains to an objection to the enforcement proceedings initiated through bills of exchange, and the request for the cancellation of the enforcement.

The debtor’s attorney stated that enforcement proceedings had been initiated by the creditor against their client through the Antalya 8th Enforcement Office, file number 2014/7794, that the competent enforcement office should be the Adana Enforcement Offices, and that the debtor’s residence address, the location of the bank, and the place of issuance of the bills were all in Adana. Furthermore, the attorney emphasized that the bills were collateral checks and claimed that their client had no debt and was in fact the creditor. The attorney requested the cancellation of the enforcement and payment order, along with a claim for bad faith compensation against the opposing party.

The creditor’s attorney defended the case by stating that the checks subject to enforcement were taken due to the ongoing commercial relationship between the parties under the franchise agreement, and that the debtor owed amounts to the creditor company for product, rent, and brand usage fees, among others, which would be deducted from the checks. The attorney referred to the clause in the franchise agreement which stated that “in case of disputes arising from this agreement, the Antalya courts and enforcement offices shall be competent,” and argued that a jurisdiction agreement had been made according to the relevant provisions of the Civil Procedure Code (HMK), making the Antalya courts and enforcement offices competent. The attorney further clarified that the checks were not collateral checks and asserted that the debtor was acting in bad faith, defending the rejection of the objection.
The court, after reviewing the franchise agreement submitted to the file, found that the parties involved were PLN Şarküteri Gıda… Ltd Şti and …, and that in Section XII of the agreement, it was stated that the Antalya courts and enforcement offices would be competent in disputes arising from the agreement. Although the debtor’s attorney claimed that the checks were collateral checks, it was determined that the checks in question were not collateral checks, as there was no explanation in Section VI of the agreement regarding collateral. Therefore, as argued by the creditor’s attorney, the checks must be considered as given to the creditor for the payment of debts arising from the agreement. Based on these findings, the court rejected the objection to jurisdiction, the objection to the debt, as it could not be proven with documents according to Article 169/a of the Enforcement and Bankruptcy Law (İİK), and the objection regarding the nature of the bill of exchange. The court also rejected the compensation claim as there was no legal basis for it, due to the lack of any decision to suspend the enforcement proceedings during the trial.

Upon the debtor’s attorney’s appeal, the Court of Appeal overturned the local court’s decision for the reasons outlined above.

The court then reaffirmed its previous reasons and issued a decision to resist.

The resistance decision has been appealed by the debtor’s attorney.

The dispute brought before the General Assembly of the Court of Cassation through the route of resistance centers on whether the objection to the jurisdiction of the enforcement office made by the debtor is valid.

For the creditor to be able to initiate enforcement proceedings through bills of exchange, the claim must necessarily be based on a bill of exchange (İİK Article 167/1). In this type of enforcement proceeding, the competent enforcement office is, as a rule, determined according to Article 50/1 of the Enforcement and Bankruptcy Law (İİK), applying the provisions of the Civil Procedure Code (HMK) on jurisdiction by analogy (HMK Articles 9-27).
Accordingly, the competent enforcement office in this case is the enforcement office in the debtor’s place of residence (HMK Article 9). Since claims based on bills of exchange are debts to be paid (Article 755, 796 of the Turkish Commercial Code, TTK), the first paragraph of Article 89 of the Turkish Obligations Code (TBK), which applies to debts that are to be paid in installments, does not apply to these types of claims. In other words, under Article 10 of the Civil Procedure Code (HMK), the creditor cannot initiate enforcement proceedings through bills of exchange in their place of residence.

The enforcement office that has jurisdiction over the proceedings is the one where the payment (or performance) of the debt, as stated in the bill of exchange, is to be made. If the underlying bill of exchange is a check, the enforcement office is determined based on the place of payment stated on the check according to Article 780/1-d of the TTK. If no such place is stated, the place of payment is considered to be the place next to the trade name of the drawee, as per the second paragraph of Article 781 of the TTK, and the enforcement office in that location is competent.

Furthermore, Article 781, paragraph 3 of the TTK states, “A check without a place of issue is deemed to have been issued at the place written next to the name of the issuer,” and in accordance with Article 50/1 of the Enforcement and Bankruptcy Law (İİK), the enforcement office where the check is issued is also authorized, and enforcement can also be carried out in those offices.

In enforcement proceedings based on a check, the competent enforcement office should be determined based on the above-mentioned rules, taking into account the checks attached to the request.

The creditor has initiated enforcement proceedings against the debtor through the bill of exchange procedure, showing five checks as the basis for the enforcement. According to the checks, their place of issue, the location of the drawee bank, and the debtor’s residence address are all in Adana, and thus the competent enforcement office for the case is the Adana Enforcement Office.

The enforcement has been carried out through the bill of exchange procedure for the collection of the debt arising from the check, which is a bill of exchange. Considering the form and basis of the enforcement, the jurisdiction condition specified in the agreement between the parties is not taken into account in determining the competent enforcement office.

On the other hand, it is seen that the franchise agreement between the parties does not explicitly refer to the checks in question, a fact also noted in the Court of Appeal’s annulment decision. In the debtor’s objection to the debt, the debtor claimed that the checks were given as collateral along with the agreement, while the creditor argued that the checks were given for the performance of debts arising from the agreement. This issue remains disputed between the parties. Since the creditor showed the checks, not the agreement, as the basis for the monetary claim in the enforcement request, and as enforcement through the bill of exchange procedure was initiated, the competent enforcement office cannot be determined based on the jurisdiction condition in the existing agreement between the parties. The jurisdiction of the enforcement office is determined based on the date of the enforcement request and the bill of exchange attached to the request.

During discussions at the General Assembly of the Court of Cassation, it was argued that since the franchise agreement was accepted by both parties, and the checks issued by the debtor … were commercial checks, the jurisdiction agreement under Article 17 of the Civil Procedure Code (HMK) was valid, and therefore the resistance decision should be upheld. However, this opinion was not adopted by the majority of the Assembly.
In this case, since it was not correct for the court to insist on its previous decision, the judgment must be overturned based on the Court of Appeal’s annulment decision and the additional reasons stated above.

However, during discussions in the General Assembly, it was agreed that the paragraph in the annulment decision stating, “… Article 17 of the Civil Procedure Code No. 6100 regulates the jurisdiction agreement, which says, ‘Merchants or public legal entities can designate one or more courts as competent for a dispute that has arisen or may arise between them through a contract. Unless otherwise agreed by the parties, the lawsuit shall be filed only in these courts specified by the contract,'” should be removed from the annulment decision, as the jurisdiction clause in the contract does not apply to the specific case.

CONCLUSION: With the acceptance of the debtor’s attorney’s appeal objections, the resistance decision is overturned due to the additional reasons stated in the Court of Appeal’s annulment decision and the above explanations. It was decided that there is no need to examine the other appeal objections based on the reason for the annulment. If requested, the prepayment of the appeal fee will be refunded to the payer. In accordance with Article 366/III of the Enforcement and Bankruptcy Law, as amended by Article 29 of Law No. 5311, and with reference to the transitional Article 7 added to the Enforcement and Bankruptcy Law by Law No. 5311, the decision may be corrected within ten days from the notification of the decision, as per the ruling made on 02.04.2019 by the majority vote.

Dissenting Opinion

The debtor’s attorney argued that the competent enforcement office for the enforcement proceeding initiated by the creditor against the debtor through the special enforcement procedure for negotiable instruments is the Adana enforcement office. The attorney further claimed that the check was given as a guarantee, and that the debtor has no debt. The attorney requested the annulment of the enforcement and payment order, and the awarding of bad faith damages against the creditor. The court decided to reject the objection to jurisdiction and other objections on the grounds that the franchising agreement signed between the parties designated the Antalya courts and enforcement offices as the competent authorities. However, the Special Chamber overturned the decision, reasoning that the checks, which were the basis of the enforcement, were not explicitly referenced in the agreement, meaning enforcement could not be carried out at the designated jurisdiction. The court, relying on the reasoning in its previous decision, made a decision to resist, which was appealed by the debtor’s attorney.

In enforcement actions based on a check, the general competent enforcement office is the one where the debtor resides, and the location of the drawee bank is considered the place of payment, so enforcement can be initiated at that enforcement office. Additionally, it is possible to initiate enforcement at the enforcement office where the check was issued.

According to Article 17 of the Code of Civil Procedure No. 6100, which entered into force on 01.10.2011, “Merchants or public legal entities may agree to designate one or more courts as competent for any dispute arising or that may arise between them. Unless otherwise agreed by the parties, the case shall be filed only in the courts designated by the agreement.” The jurisdiction agreement specified in Article 17 of the HMK also applies to jurisdiction agreements regarding enforcement offices, as referenced in Article 50 of the Enforcement and Bankruptcy Law (İİK).

The fact that the checks in question were given based on the franchising agreement dated 01.12.2013 is not disputed, as the debtor’s attorney claims the checks were given as a guarantee due to the agreement, while the creditor’s attorney claims the checks were given for the purpose of paying the debt arising from the agreement. Therefore, the franchising agreement accepted by both parties stipulates that, in case of dispute, the courts and enforcement offices in Antalya shall have jurisdiction. The creditor PLN Şarküteri Gıda Tur. San. Tic. Ltd. Şti. and the drawee of the checks, debtor …, who is a merchant, both have the merchant status required for the issuance of the checks. In this case, the jurisdiction agreement between the merchants is valid under Article 17 of the HMK, and the decision to reject the objection to jurisdiction is appropriate. The debtor’s attorney’s other appeal objections should be reviewed by the Special Chamber.
“Contrary Opinion”

Upon the creditor initiating enforcement proceedings based on promissory notes (specifically using the garnishment procedure for negotiable instruments), the debtor raised an objection claiming that the place of issue of the cheque in question was Adana, and therefore, the Adana Enforcement Directorate was competent to handle the case. The court, however, rejected the objection to jurisdiction and other objections, stating that according to the agreement between the parties, the courts and enforcement offices of Antalya had jurisdiction. Upon the debtor’s appeal, the Court of Appeal overturned the decision on the grounds specified above, accepting the debtor’s objections to jurisdiction.

The court then issued a decision to resist based on the previously mentioned reasoning, and the debtor’s representative filed an appeal.

Article 50 of the Enforcement and Bankruptcy Law (İİK) regulates that the provisions of the Civil Procedure Code regarding jurisdiction should be applied by analogy for claims related to monetary and collateral debts.

The cheques subject to enforcement under the garnishment procedure were issued by the plaintiff (the debtor), and the creditor PLN…Ltd. initially raised the objection to jurisdiction. The place of issuance of the cheques is Adana, and the drawee bank is Finansbank AŞ, Adana Kızılay Branch, with the drawee’s address also in Adana. According to Article 6 of the Civil Procedure Code (HMK), the place of residence of the drawee, the place of payment (i.e., where the drawee bank is located according to Article 10 of the HMK), and according to Article 50/1 of the İİK, the place of issuance of the cheque are competent for enforcement based on a cheque.

However, in accordance with Article 17 of the Civil Procedure Code (HMK), it is stipulated that merchants or public legal entities can agree on the competent court in contracts between them. The parties are merchants, and they have signed a Franchising Agreement dated 01.10.2013. In Section XII of the agreement, they specified that the courts and enforcement offices of Antalya would have jurisdiction for any disputes arising from the contract. This jurisdiction agreement is valid and in accordance with Article 17 of the HMK, effective at the time of the enforcement proceedings and the lawsuit.

The Special Chamber, in its decision to overturn the ruling, stated that, since the enforcement procedure is based on negotiable instruments, the rules of jurisdiction regarding the cheques should be considered, and it could not be based on the contract because the contract does not refer to the cheques in question, thus the enforcement could not be conducted in the jurisdiction of the Antalya Enforcement Offices. However, it was acknowledged that the cheques were issued in accordance with the contract between the parties.

The debtor claims that the cheques were given as collateral under the terms of the contract, and objections and complaints regarding the debt have been raised. The creditor argues that the cheques were given in relation to the debtor’s debts (such as rent, products, brand usage fees, etc.) under the terms of the franchising contract. A cheque, being a negotiable instrument containing an unconditional debt acknowledgment, loses its abstract nature when the parties acknowledge that the cheques were given in accordance with the contract. Therefore, the enforcement of these cheques should be evaluated together with the contract.

In this case, for the enforcement of the cheques related to the contract, the competent enforcement office is determined by the jurisdiction clause in the contract. Therefore, the enforcement office of Antalya is competent. According to Article 17 of the HMK, unless otherwise agreed, only the enforcement office designated in the contract will have jurisdiction.

After determining jurisdiction in this manner, issues such as whether the cheques are collateral, objections to the debt, and complaints will be examined according to the contract. As the court’s resistance decision regarding jurisdiction is appropriate, the appeal on other matters should be sent to the Special Chamber for further review. Therefore, we do not agree with the majority’s decision to overturn the ruling.

Dissenting Opinion

The case concerns an objection to enforcement proceedings carried out through the attachment of negotiable instruments.

The debtor has raised an objection regarding jurisdiction.

The creditor has argued that the enforcement office has jurisdiction based on the jurisdiction agreement made between the parties.

The local court rejected the objection regarding jurisdiction based on the jurisdiction agreement, while the Special Chamber overturned the decision on the grounds that the jurisdiction agreement was not valid. The local court insisted on the decision based on previous reasoning.

The dispute presented before the General Assembly of Civil Chambers (HGK) revolves around whether the checks in question were issued under the franchising agreement and whether the jurisdiction agreement made is valid.

As is well known, Article 17 of the Civil Procedure Law (HMK) regulates that merchants or public legal entities can make jurisdiction agreements.

In the present case, the parties have not denied the signature under the contract, and there is no doubt that both parties are merchants. Furthermore, it is accepted by both parties that the checks subject to enforcement were issued according to the contract. The fact that a copy of the contract was not attached to the enforcement proceeding does not invalidate this jurisdiction agreement. Additionally, just as a jurisdiction agreement can determine the competent court, there is no obstacle to determining the competent enforcement office through such an agreement.

As a result, given that both parties are merchants and enforcement proceedings were initiated in accordance with the jurisdiction agreement made between them, I do not agree with the majority opinion to overturn the decision and believe that the decision of the Local Court should be upheld based on the reasons stated in the judgment.

12. The Civil Chamber 2020/3011 E., 2021/638 K.

“Judgment Text”

COURT: … Regional Court of Appeal

Upon the creditor’s request for appellate review within the prescribed time frame of the decision given by the Regional Court of Appeals, the relevant case file was sent to the chamber, and after the report prepared by the Examining Judge … was heard and all documents in the file were read and examined, the matter was discussed and considered.
1- Examination of the creditor’s appeal objections regarding the debtor …:

In the case of the enforcement proceedings initiated based on the promissory note through the execution of negotiable instruments, which was previously started by the creditor and later abandoned, regarding the execution file numbered 2018/14478 E. of the … 17th Enforcement Directorate, the debtor … filed an objection, and the 9th Civil Enforcement Court of … ruled on 30.11.2018, with file number 2018/782 E. – 2018/875 K., to annul the enforcement. This decision became final on 07.01.2019. Although enforcement court decisions do not constitute a final judgment in a material sense, this decision has legal effect and consequences regarding the parties of the enforcement from the perspective of enforcement law. Based on the claims and defenses of the parties, the information and documents in the case file, and the reasoning of the decision, the creditor’s appeal objections regarding the debtor … are REJECTED.

2- Examination of the creditor’s appeal objections regarding the debtor …:

In the enforcement initiated by the creditor through negotiable instruments based on the promissory note, following the delivery of sample payment order number 10 to the debtor, the debtor, within the legal time frame, filed an objection with the enforcement court. The debtor argued that the enforcement proceedings were previously started based on the same promissory note through the 2018/14478 E. file of the … 17th Enforcement Directorate, and later, the creditor retrieved the same check from the enforcement office, and an “NSF” (not sufficient funds) stamp was added with a retroactive date, claiming that, due to this addition, the check was no longer a negotiable instrument and requested the annulment of the enforcement. The first instance court rejected the complaint, and upon the debtor’s appeal, the Regional Court of Appeals ruled that the check subject to the enforcement initiated under file 2019/472 E. by the … 7th Enforcement Directorate had previously been the subject of enforcement under the 2018/14478 E. file of the … 17th Enforcement Directorate. It was found that although a stamp was placed on the back of the check to show the payment for the sheet cost, the stamp indicating insufficient funds was overlooked by the bank personnel. This enforcement was annulled due to the lawsuit filed by the plaintiff …, and after the annulment, the bank branch was visited and a system check confirmed that the insufficient funds record was created on 22/11/2018. Subsequently, the previous endorsement was removed and a new endorsement was added to correct the forgotten presentation remark. However, the correction to the presentation remark could not be made by changing the endorsement after the presentation date and verifying the system, leading to the annulment of the first instance court’s decision and the cancellation of the enforcement initiated with file 2019/472 E. of the … 7th Enforcement Directorate.
According to Article 808/1-b of the Turkish Commercial Code (TTK) No. 6102, the check must be presented to the drawee bank within the specified time frame, with a dated declaration written on the check (indicating the date of presentation). According to this regulation, the presentation of the check is not subject to strict formal rules, but it is required that the date of presentation be written by the drawee bank.

In the present case, it is undisputed between the parties that an enforcement was previously initiated based on the check and later abandoned, and that the check was retrieved from the enforcement office with the “NSF” (not sufficient funds) remark added. Upon reviewing the previous version of the check, it is clear that the check was presented and the amount owed by the drawee bank was paid to the creditor on 22.11.2018. Although the enforcement court does not have an obligation to investigate the presentation date of the check, taking the above regulation into account, it can be understood from the check itself on which date it was presented to the drawee bank. (Similar ruling by our Chamber on 25.03.2003, File No. 2003/3794 E. – 2003/6349 K.)

Therefore, it is understood that the check was presented within the time limit. The decision of the first-instance court to reject the case is correct. The Regional Court of Appeals should have rejected the debtor’s appeal on the grounds mentioned, but it wrongly decided to annul the enforcement concerning the debtor … in writing.

Conclusion: With partial acceptance of the creditor’s appeal objections, the decision of the 8th Civil Chamber of the … Regional Court of Appeals dated 17.02.2020 and numbered 2019/1880 E. – 2020/444 K. is REVERSED for the reasons written above, in accordance with Article 373/2 of the Turkish Civil Procedure Code (HMK) No. 6100, amended by Law No. 5311, and the prepaid appeal fee will be refunded to the relevant party upon request. The case file will be sent to the Regional Court of Appeals that issued the decision. The decision was made unanimously on 20/01/2021.

12. HD., E. 2019/9167 K. 2019/13006 T. 19.9.2019

In the enforcement initiated by the creditor based on a check under the special enforcement procedure for negotiable instruments, upon the debtor’s receipt of the payment order, the debtor filed an objection within the legal time limit with the enforcement court. Among other objections, the debtor argued that the competent enforcement office was the … Enforcement Office, and objected to the jurisdiction of the … Enforcement Office. The court accepted the objection to the jurisdiction.

According to Article 50/1 of the Enforcement and Bankruptcy Law (İİK), in enforcement proceedings related to monetary and collateral debts, the competent enforcement office is determined by applying the provisions of the Civil Procedure Code (HMK) related to jurisdiction by analogy, as referred to in Article 447/2 of the HMK. Moreover, the enforcement office where the contract underlying the enforcement was made is also competent for the enforcement.

Accordingly, an enforcement based on a check can be initiated at the enforcement office located in the debtor’s place of residence (Article 6 of the HMK), the enforcement office where the drawee bank is located, as the place of payment (Article 10 of the HMK), and, in addition, in accordance with Article 50/1 of the İİK, at the enforcement office where the check was issued.