Post-dated cheques under Section 138: Date of cheque governs liability.

The Supreme Court held that post-dated cheques are subject to Section 138 of the Negotiable Instruments Act from the date they bear, not the date they are written. The Court overturned the High Court's ruling, emphasizing that post-dated cheques become payable on demand on the date written on them. This decision ensures that drawers can be held liable for dishonored post-dated cheques due to insufficient funds, aligning with the legislative intent to enhance the reliability of cheques in commercial transactions. The Court directed the Chief Judicial Magistrate to proceed with the complaints according to the law.

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Issues Involved:
1. Applicability of Section 138 of the Negotiable Instruments Act, 1881 to post-dated cheques.
2. Interpretation of the date on which a cheque is considered "drawn" under Section 138(a) of the Act.

Detailed Analysis:

1. Applicability of Section 138 of the Negotiable Instruments Act, 1881 to Post-Dated Cheques:
The primary issue in this case is whether Section 138 of the Negotiable Instruments Act, 1881, applies to post-dated cheques. The appellant filed complaints under Section 138 after the cheques issued by the respondent were dishonored due to insufficient funds. The High Court quashed the proceedings, ruling that Section 138 did not apply to post-dated cheques. This decision was based on the interpretation that post-dated cheques are not "drawn" on the date they bear but on the date they are written, which in this case was more than six months before the cheques were presented.

The Supreme Court disagreed with the High Court's interpretation. It held that post-dated cheques, although initially bills of exchange, become cheques on the date written on them, i.e., the date they are payable on demand. Therefore, Section 138 applies to post-dated cheques from the date they bear.

2. Interpretation of the Date on Which a Cheque is Considered "Drawn" Under Section 138(a):
The second issue revolves around the interpretation of the term "drawn" in Section 138(a) of the Act. The High Court, following the Madras High Court's ruling in Babu Xavier v. Lalchand Munoth, held that a cheque is "drawn" on the date it is written and made, not the date it bears. This interpretation excluded post-dated cheques from the ambit of Section 138 if presented beyond six months from the date they were written.

The Supreme Court rejected this interpretation, supporting the Kerala High Court's view in Manoj K. Seth v. Fernandez. The Supreme Court clarified that a post-dated cheque is considered "drawn" on the date it bears, not the date it is written. This interpretation aligns with the legislative intent to enhance the acceptability of cheques and hold drawers liable for dishonored cheques due to insufficient funds.

The Court emphasized that a post-dated cheque remains a bill of exchange until the date written on it, at which point it becomes a cheque payable on demand. Therefore, the six-month period for presenting the cheque, as stipulated in Section 138(a), begins from the date the cheque bears, not the date it was written.

Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's judgment. The Court held that post-dated cheques are subject to the provisions of Section 138 of the Negotiable Instruments Act, 1881, from the date they bear. The learned Chief Judicial Magistrate, Karnal, was directed to proceed with the complaints in accordance with the law. This judgment ensures that post-dated cheques are treated as cheques from the date they bear, thus fulfilling the legislative intent of enhancing the reliability and acceptability of cheques in commercial transactions.

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