In India, the legal framework governing cheque bounce cases is outlined primarily under the Negotiable Instruments Act, 1881. Section 138 of the Act is particularly significant, as it stipulates the conditions under which the dishonour of a cheque constitutes an offense. A critical question that often arises in this context is whether a cheque bounce case can be filed if the cheque in question is post-dated.
Understanding Post-Dated Cheques
A post-dated cheque is one that is drawn with a future date on it, meaning the cheque is intended to be encashed on or after that specified date. The use of post-dated cheques is a common practice in various transactions, especially in business dealings, loan agreements, and instalment payments. The rationale behind issuing a post-dated cheque is often to provide a guarantee of payment at a future date when funds are expected to be available in the drawer’s account.
Legal Position on Cheque Bounce Cases for Post-Dated Cheques
The key issue to consider is whether the fact that a cheque is post-dated impacts the ability to file a cheque bounce case under Section 138 of the Negotiable Instruments Act. According to the Act, a cheque is deemed to be dishonoured when it is returned by the bank unpaid, either due to insufficient funds in the account or if it exceeds the arrangement made with the bank. Importantly, the Supreme Court of India has clarified this issue in various judgments. The Court has held that the dishonour of a post-dated cheque can indeed result in a cheque bounce case under Section 138, provided that all other legal requirements are met. The post-dating of the cheque does not negate the drawer’s responsibility to ensure that sufficient funds are available in the account on the date specified on the cheque.
Legal Requirements for Filing a Cheque Bounce Case
- The Cheque Must Be Presented to the Bank: The cheque must be presented for payment within the period of its validity, which is typically three months from the date on the cheque, including post-dated cheques.
- Notice to the Drawer: If the cheque is dishonored, the payee or holder must issue a written notice to the drawer within 30 days from the date of receiving the bank’s intimation of dishonor. This notice demands payment of the cheque amount within 15 days.
- Failure to Make Payment: If the drawer fails to make the payment within 15 days of receiving the notice, the payee can file a complaint under Section 138 within one month from the expiry of the 15-day period.
Conclusion
In summary, the fact that a cheque is post-dated does not provide any immunity from a cheque bounce case. The critical factor is that the cheque is dishonored on the date it is presented for payment, as mentioned in the cheque itself. Therefore, if a post-dated cheque is dishonored, the payee is fully entitled to initiate legal proceedings under Section 138 of the Negotiable Instruments Act, provided all statutory conditions are fulfilled. This serves as a reminder to individuals and businesses that issuing a post-dated cheque carries the same legal obligations and consequences as any other cheque.
One Response
Whether any precondition implied by the drawer at the time of issuing any post dated cheque is justified and lawful under section 138 of NI ACT.