TMI Blog2007 (10) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure date upon the happening or the non-happening of an event i.e. towards a contingency cannot be the foundation of an action under Section 138 of the Negotiable Instruments Act 1881. 3. Admittedly, the complaint which was filed under Section 138 of the Negotiable Instruments Act 1881 pertained to cheques issued by the petitioners on 1.6.2003. 4. The cheques in question were in replacement of earlier cheques issued on 1.6.2002 and had to be replaced on account of the fact that the 6 months' validity period of the cheques had expired. 5. A little elaboration is required as to under what circumstances the cheques were issued. 6. First petitioner is in the business of export of garments. The export of garments was regulated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of time to utilize the quota for the year 2001 i.e. sought extension of time to comply with the policy. Along therewith post dated cheques dated 1.6.2002 were issued in favour of the complainant as earnest money deposits. 12. It may be noted that as per the clause 8 of the policy, earnest money could be deposited by post dated cheques. 13. First petitioner could not fulfill its obligations to utilize the unexpired quota by the extended period and on 23.4.2002 the complainant issued a show-cause notice as to why the earnest money be not forfeited and cheques encashed. Letter dated 23.4.2002 reads as under:- TO COLLAGE CULTURE 56-58 COMMUNITY CENTRE, EAST OF KAILASH, NEW DELHI-110 065. SUB : SHOW CAUSE NOTICE DE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ATED ABOVE FOR THE REASONS MENTIONED IN THE ENCLOSED SHEET. YOUR REPLY SHOULD REACH THE UNDER SIGNED WITHIN A PERIOD OF 15 DAYS FROM THE DATE OF THIS SHOW CAUSE NOTICE, FAILING WHICH IT WILL BE PRESUMED THAT YOU HAVE NOTHING TO REPRESENT AGAINT THE DECISION INDICATED ABOVE IN CASE OF YOUR WISH TO AVAIL THE BENEFIT ON OVERALL PERFORMANCE BASIS. PLEASE ENSURE THAT YOUR REPLY TO THIS NOTICE IS SUPPORTED BY A DETAILED STATEMENT AS PER ANNEXURE-XIII OF POLICY BOOKLET. AN OPPORTUNITY FOR PERSONAL HEARING IS ALSO GIVEN TO YOU AT 4.00 PM ON 9.5.2002 WITH SHRI J.K. ARORA, ADDL. DIRECTOR, AEPC, NEHRU PLACE. YOU ARE REQUESTED TO ATTEND THE PERSONAL HEARING WITH ALL DOCUMENTARY EVIDENCES SUPPORTING YOUR CONTENTION. KINDLY NOTE THAT IF YOU FAIL TO ATTEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also not in dispute that the cheques were towards replacement of the cheques issued on 1.6.2002 which cheques were also post dated cheques. It is also not in dispute that the cheques were issued as earnest money deposit. It is also not in dispute that the earnest money was liable to be forfeited only if the first petitioner failed to exhaust the quota issued by the complainant for export of garments. 20. 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. 21. The difference in the two kinds of post-dated cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of mon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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