The Delhi High Court has dismissed a plea seeking to quash proceedings under Section 138 of the Negotiable Instruments Act concerning a post-dated cheque issued as security.
Justice Neena Bansal Krishna held that penal liability can arise if a legally enforceable debt exists on the date of cheque presentation. Relying on the Supreme Court’s ruling in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. (2016), the Court found that the petitioner’s liability had crystallised.
Accordingly, it ruled that post-dated security cheques can attract Section 138 once the liability becomes due.
[Manmohan Gaind v. Negolice India Pvt. Ltd.]
