Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2007 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (10) TMI 659 - HC - Indian LawsDishonor of Cheque - Post dated cheques was given as Earnest money deposit Or Security - Legally enforceable debt u/s 138 of the Negotiable Instruments Act 1881 Or not? - The difference in the two kinds of post-dated cheques would be that the cheque issued under first circumstance would be for a debt due, only payment being postponed - The latter cheque would be by way of a security - HELD THAT:- A post dated cheque may be issued under 2 circumstances. Under circumstance one, it may be issued for a debt in presenti but payable in future. Under second circumstance it may be issued for a debt which may become payable in future upon the occurrence of a contingent event. The word 'due' means 'outstanding at the relevant date'. The debt has to be in existence as a crystallized demand akin to a liquidated damages and not a demand which may or may not come into existence; coming into existence being contingent upon the happening of an event. It would be relevant to note that the statute does not refer to the debt being payable, meaning thereby, a post dated cheque for a debt due but payment postponed at a future date would attract Section 138 of the Negotiable Instruments Act 1881. But the cheque issued not for an existing due, but issued by way of a security, would not attract Section 138 of the Negotiable Instruments Act 1881, for it has not been issued for a debt which has come into in existence. Looking to the precedent, I find that in the decision M.S.Narayana Menon @Mani vs. State of Kerala & Anr.[2006 (7) TMI 576 - SUPREME COURT], it was observed that:- “If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act.'' Thus, the petition must succeed - The summoning order is quashed.
|