Before we understand the definition of post-dated cheque and why it is issued, let’s understand little more about the cheque. In writing a post-dated cheque, the only difference is that you will write a future date instead of the current date. Dishonour of post-dated cheque given for Advance is not offence under S. 138 of Negotiable Instruments Act. So, the banker should refrain from payment of a post-dated cheque before the date mentioned therein otherwise he may incur several liabilities [3] . the date mentioned on the cheque is yet to come 4. In the said case, the court itself agreed to the findings of the trial court [21] that despite repeated opportunities having been given to the appellant bank, they didn’t produce the accounts’ extracts for the relevant period [22] inspite of the records being with them. 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). * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ Cheques are very prone to fraud and ill will. To avoid committing the default of cheque bounce, the drawer must mention the correct date in the cheque. ! This will not cost you in terms of additional charges that a bank may charge you but a loss of credibility and relationship that has been built so far. Post-dated cheques are common and enforceable. Do you have a 2:1 degree or higher? If a post-dated cheque is not blank, that is to say that if a certain amount is written on it then in my view, it should not be derecognized merely on the ground that no liability or debt was standing due when it was being drawn because no disbursement of loan had been made. The holder of the cheque has authority to put in the date. Â I live in the state of nj...and i am looking at all these laws that prohibit and fine bad check doers...with the exception of post dated checks. They, however, are also used as a tool of secured future payment. When Dubai’s property market was booming, many developers collected post dated cheques (PDCs) from buyers. (Rs.2,00,000/-) i presented this cheque to bank on dated 16/06/2015. 3 This is 2017, how many months close the case or setteled by court. 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 [10] . Personal loans, car loans, home mortgages might require monthly PDCs for the full period as payment security. aur aapko sab pata hona chahiye ki kis reason code ke ander hum legal action le sakte hain aur kis reason code he under hum legal action nahi le sakte . * The purpose of Amending Act is to inculcate faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions and in order to promote efficacy of banking operations. ?>, Fast and Powerful Business Management Software for your growing business, Enterprise Class Product to improve your business efficiencies, Collection of Connected Services for TallyPrime, Extend, Customize or Integrate your Tally, to meet specific business needs, Home Accounting Post-dated Cheque – Definition, Validity and How to Write it. I am a trader, my clients provide me PDC cheques (post dated). Submitting post-dated cheques by borrowers is a customary practice for home finance and other retail products like personal, auto and consumer durable loans. If you’re postdating a check for timing or convenience reasons, say you will be out of town and will unable to pay when you usually do, schedule the payment through your bank’s online bill payment service such as Net banking, mobile banking etc.. Sign up for automatic electronic payments - only if you trust the payee. Visit Now! If such cheques bounce, the drawer will have difficulties as Omani law says that these cheques were not intended as the primary mode of payment. Post dated cheque i.e. Hello. Post-dated cheques are considered to be an instrument of security to guarantee future payments. You cannot take any legal action against that person before the maturity of the post-dated cheque. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. In this case, the Respondent had taken loan for his business from the Appellant bank and for satisfaction of the loan; some blank cheques were issued to the Appellant. CORRECT REASONING GIVEN FOR BLANK POST-DATED CHEQUES. Insufficient funds: You do not have sufficient funds available on the date of writing the cheque, but you are sure funds will be available on the future date or the date mentioned on the cheque. The Bombay High Court has held that if a blank post-dated cheque — which has been issued only as a "collateral security" for a loan — bounces, the debtor can not be prosecuted under the Negotiable Instruments (NI) Act. The magnitude of payments via cheques in the UAE is outstanding, there were approximately 12 million cheques in circulation in the first half of 2018, with an estimate of 4% of those that bounced. The consideration amount is 4.8 crore. On the other side, the recipient may not be aware of this and he may deposit the cheque into bank resulting in a cheque bounce. Free resources to assist you with your legal studies! This type of cheque is popularly called as PDC Cheque .The can be en cashed only on the date written on its face. Thus, it is pivotal to comprehend the pros and cons of using cheques, and, especially, when writing post-dated cheques. Post-dated cheque. As per new law if my clients bounce the cheque & I make a case against them, they won't be imprisoned, they would have to pay fine. * The main template file That also brings in transparency in transactions and discourages creation of black or unaccounted money through evasion of taxes or other malpractices. Now, you are in a situation where you have one or more post-dated cheques received as well as issued? If you have an option to exercise, then it is best to avoid writing a postdated cheque. Take a look at some weird laws from around the world! 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. Ltd. v. Shri Chiko Ursula D’Souza [26] where the debtor gave a stop-payment order to the bank with a malafide intention of avoiding payment. In case a rent cheque bounces, the landlord can follow the above procedure to recover the dues from the tenant. The court was of the view that u/S. I did not have that type of money in the bank and the agent new that, he even suggested to let it bounce and then go in to th dealership to talk with someone in the finance dept to ask for an extension on the downpayment. 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 contemplate (as indeed it must) the making of a bill of exchange at a future date. * It is used to display a page when nothing more specific matches a query. Issuing a post-dated cheque also involves a process of informing the bank with the written instructions which are cumbersome. Later, at the time of presentment of the cheque by the appellant, one of these cheques was dishonoured on the grounds of insufficiency of funds. Why is it not advisable to issue a post-dated cheque? to secure a loan, to serve as an advance or security or for discharge of a legally enforceable debt. However, the court said, that the object was not to provide effective and speedy remedy for recovery of loans. If your account lacks funds from which the cheque is issued, then there is a high … Some time payment cheques and post dated payment cheques get dishonored when presented in the banks. World trade is carried through banking operations rather than cash transactions. Stale cheque i.e. In this condition, cheque when sent to the bank, bounces or is dishonoured. The cheque is post-dated or more than … For example, if a check is being issued on 5th September, 2017 and carries a date of 6th September, 2018, then it would be called a post-dated check and the payee can withdraw it only after 6th September, 2018. * You might have considered this as well in issuing a post-dated cheque. Options in case the post-dated cheques of EOS benefits bounce back. The Bombay High Court has held that if a blank post-dated cheque -- which has been issued only as a "collateral security" for a loan -- bounces, the debtor cannot be prosecuted under the Negotiable … 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 [12] . I pay rent by cheque. View examples of our professional work here. Very often banks accept blank post-dated cheques from … I did not have that type of money in the bank and the agent new that, he even suggested to let it bounce and then go in to th dealership to talk with someone in the finance dept to ask for an extension on the downpayment. Now, in Warma case, blank post-dated cheques were issued prior to disbursement of loan as a collateral security for loan which was sanctioned. You should not treat any information in this essay as being authoritative. Options in case the post-dated cheques of EOS benefits bounce back. I have 8 post dated Cheques for issuing quaterly mode. Bengaluru: A non-bailable warrant has been issued against the directors of the Coffee Day Global Limited which manages the famed Cafe Coffee Day in a cheque bounce case. Usually, a postdated cheque is used when you are short on money and that’s exactly when you can’t afford extra fees. How much time i refund my money by legal procedure. Generally, if you write a cheque, you will write the current date of the cheque i.e., 27th Jan. Thus, the court held the respondent liable u/S.138. Difference between Ante- date Cheque, Post Dated Cheque and Stale Cheque – We have discussed different types of cheque in our earlier articles. For instance, in Venugopalan v. Moosa [11] , the complainant alleged that the respondent/accused had borrowed an amount of Rs. the date that has been put on it). With specific regard to bouncing of post-dated cheques, yet another case has created flutters among the legal circuit very recently, i.e. It is because of the fact that the parties may have agreed to use these cheques as EMIs for repaying the loan in future. A person writing a postdated check may violate the law if the check is returned by the bank to the recipient because the maker’s account does not have the funds on deposit necessary to cover the check. Cheque Bounce Notice In case you have deposited a cheque that has bounced, send a letter (a demand notice) to the party that wrote the cheque (the drawer), threatening to initiate proceedings under the Negotiable Instruments Act (NI Act) if the amount due is not paid. Hello. A post-dated cheque is as much negotiable as a cheque for which payment is due immediately on presentation, and there is no authority for holding that a person in whose favour such a cheque is endorsed before the date of payment is not a holder in due course or that such an assignment or endorsement is not enforceable at the instance of the assignee or endorsee. 2.3K views View 3 Upvoters Insufficient funds in the account of the person issuing the cheque 2. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on LawTeacher.net then please: Our academic writing and marking services can help you! 80 Iconic Judgments on Cheque Bounce in 2019 you should not miss! 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