2003 (3) TMI 533 - SUPREME COURT

Applicability of section 138 of the Negotiable Instruments Act, 1881 to a case in which a person issuing a post-dated cheque stops its payment by issuing instructions to the drawee bank before the due date of payment?

Held that:- Appeal allowed. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date.

The impugned judgments of the High Court and the Judicial Magistrate, 1st Class, Panaji, Goa are set aside & hold that section 138 of the Negotiable Instruments Act will be attracted in the facts of the case. However, whether a case for punishment under that provision is made out, will depend on outcome of the trial. The cases are remanded to the concerned Judicial Magistrate for deciding the complaints filed by the appellant herein on merits in accordance with law. All the appeals are allowed. Nothing contained in this judgment be taken as expression of opinion on merits.