Ashok Yeshwant Badave v. Surendra Madhavrao Nighojakar

Facts

• The drawer issued several post-dated cheques as security for a loan
• On the respective dates, the cheques were presented and dishonoured for insufficient funds
• The complainant filed under S.138
• The drawer argued post-dated cheques are not "cheques" under S.6 because they are not payable "on demand" when issued

Issue

1. Whether a post-dated cheque qualifies as a "cheque" under S.6 for purposes of S.138 proceedings.

Held

• A post-dated cheque is a valid cheque under S.6. The requirement of being "payable on demand" is satisfied on the date the cheque bears. On that date, it becomes a demand instrument. S.138 is attracted when such cheque is presented on or after its date and is dishonoured for insufficiency of funds. The fact that it was post-dated at the time of issue does not affect its character as a cheque when it matures.

Ratio Decidendi

A post-dated cheque is a valid negotiable instrument under S.6. It becomes payable on demand on the date it bears and S.138 applies upon dishonour when presented on or after that date.