Although there is no provision in the Act specifically allowing post-dated cheques, like S.17(2) of the English Bill of Exchange Act, 1882, there is nothing forbidding them and para 2 of S.5 of the Indian Act contemplates the making of a bill of exchange at a future date. The cheque as drawn therefore is a cheque in proper form and therefore, a bill of exchange within the meaning of the Act [Bank of Baroda Ltd. v. Punjab National Bank Ltd., AIR 1942 Cal 562].
A post-dated cheque becomes a cheque for the purpose of S.138 of the Act only on the date mentioned thereon and in between the date of drawal of the cheque and the date mentioned in the cheque, it is only a bill of exchange. The period of six months mentioned in proviso (a) to S.138 begins to run only from the date mentioned in the cheque and not from the date of drawal of the chequee [In the instant case, a post-dated cheque was issued by one of the parties which got dishonoured when it was presented for payment on the date mentioned therein; see Sheelam Raji Reddy v. Samudrala Bixmaiah, (2003) 113 Comp Cas 517].
It is an established law that for attracting S.138 of the Act, the cheque should have been issued in discharge of a debt or liability. For a criminal prosecution it has to be shown that liability was in existence at the time the cheque was issued and also at the time it became mature for payment [Swastik Coaters P. Ltd. v. Deepak Bros. (1997) 2 BC 569 (AP)]. In this scenario, situation is similar to a ‘simple cheque’. For instance, in Venugopalan v. Moosa 2005 CriLJ 2220, the complainant alleged that the respondent/accused had borrowed an amount of Rs. 20,000/- from him and had issued a post-dated cheque for Rs.22,000/- for the due discharge of the said liability (including interest). The cheque, when presented for encashment, was dishonoured on the ground of 'insufficiency of funds'. Thereafter, the complainant came to court after scrupulously observing the statutory time table. The issue was whether the cheque was issued for the due discharge of a legally enforceable debt/liability because of the additional fact that in the complaint, the complainant had mentioned that he had given the loan to the defendant on a ‘guarantee’ of the post-dated cheque concerned. It may be noted that this post-dated cheque had mentioned a certain amount and a certain future date; along with signature of the drawer. Now the Kerala HC said that rather than looking at the nomenclature of the word ‘guarantee’ mentioned in the complaint, the right approach would be to consider the ‘nature’ of the complaint. Thus, the court held the respondent liable u/S.138.
The law seeks to protect the interests of the drawer of the post-dated cheque against any harassment by the creditors in case the former is asked to furnish blank post-dated cheques; as at the time it is drawn there is no liability due on him. But the law also seeks to protect the interest of the creditors (who have accepted the post-dated cheques in good faith) if the debtors misuse the post-cheque as a measure to defer the payment; as held by the Supreme Court in Goaplast Pvt. Ltd. v. Shri Chiko Ursula D’Souza [Judgment dated 7.3.2003; hon’ble judges- M.B. Shah and Arun Kumar JJ.] where the debtor gave a stop-payment order to the bank with a malafide intention of avoiding payment. In fact, acceptance of a post-dated cheque is an accommodation given to the debtor by a creditor and the former can’t be allowed to abuse this faith.
Sir, 138 matters are almost always won or lost on technicalities so make sure that the legal technicalities have been duly followed by your your Lawyer.
Best of Luck,
Adv. K. P. Singh Deora,
Advocate & Legal Consultant