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. In case a rent cheque bounces, the landlord can follow the above procedure to recover the dues from the tenant. /** Info: 3311 words (13 pages) Law Essay Firstly, a post dated cheque is not recognised by banks and financial instituions. To be sure, obtaining post-dated cheques for equated monthly installments (EMIs) payable to service consumer loans was a practice pioneered by an (MNC-owned) NBFC. Unmatching signature on the cheque 3. 2. A DIFC based company I work for hasn't paid 5 months worth of salary, plus business travel expenses. Visit Now! Very often banks accept blank post-dated cheques from … Here,s what you need to know. to secure a loan, to serve as an advance or security or for discharge of a legally enforceable debt. 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. A post-dated cheque is only a bill of exchange from the time when it is written or drawn till the date it becomes mature (i.e. It would also be a good option to seek services of retired Supreme Court/ High Court judges for such fast-track courts in order to improve the efficiency and quality of judgments/ awards. Typically, banking companies will take post-dated repayment cheques at the time of giving out loans, while landlords in many Indian cities take post-dated cheques for the entire year in advance after signing the lease deed. So, it was held that the cheque was not towards any existing debt or liability, on the ground that the respondent had issued the cheque concerned as security for loan before loan amount was disbursed. Dishonour of post-dated cheque given for Advance is not offence under S. 138 of Negotiable Instruments Act. the date mentioned on the cheque is yet to come 4. In the present era of commercial dealings, the issuance of post-dated cheques has become a common phenomenon and therefore the significance of such post-dated cheques cannot be under-emphasized. They, however, are also used as a tool of secured future payment. There is no strict legal requirement that a cheque be dated. The total so far is around AED 700K. When the payment is stopped- if the drawer asks the bank to stop the payment and not to pay for cheque already issued 6. So, the story of the post-dated cheque is that you don’t have sufficient balance on the date the drawee demands the sum from you and you issue him a post-dated cheque with a future date. Now, you are in a situation where you have one or more post-dated cheques received as well as issued? In other words, the date that appears on the check is after the date when the check was written. In those circumstances, instead of writing a postdated cheque, you can try the following: Sometimes, the alternative doesn’t work, and you choose to issue post-dated cheque(s) assuming the funds will be available on the future date. * Post Dated Cheques Accounting is varied from Company to Company. Insufficient Funds. the Bombay High Court’s decision in Ramkrishna Urban Cooperative Credit. What am I suppose to do? In the above example, if you are a recipient of the cheque, you can deposit the cheque on 3rd Feb or after that though the cheque was physically written and received to you on 27th Jan. The law seeks to protect the interests of the drawer of the post-dated cheque against any harassment by the creditors in case the former is asked to furnish blank post-dated cheques; as at the time it is drawn there is no liability due on him. the date mentioned on the cheque is yet to come 4. you cannot post it to the bank till the realisation date but when it comes to the customer how do you handle it. 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! [The following post is contributed by Sneha Bhawnani, who is an Assistant Legal Advisor at Vinod Kothari & Co. She can be contacted at firstname.lastname@example.org.] Now, a post-dated cheque is a one in which the drawer (or any holder) mentions a date on it, which is subsequent to the date on which it is drawn. The occurrence of an event when a person draws a cheque in the favor of another person without maintaining sufficient amount in his account as a result of which the bank has to return the cheque, which is termed as bouncing or dishonoring of the cheque. 3 This is 2017, how many months close the case or setteled by court. By. Is it fraud, because you couldn't cover the cheque? But the law also seeks to protect the interest of the creditors (who have accepted the post-dated cheques in good faith) if the debtors misuse the post-cheque as a measure to defer the payment; as held by the Supreme Court in Goaplast Pvt. * @package WordPress To top-up the foregone case, in Taher N. Khambat v. Vinayak Enterprises  , a blank signed cheque (though not post-dated) was given as security but the court held that the provisions of S.138 could not apply to the instant case situation. What your bank should have dated, says another banking source, is send the cheques back to the IRD's and ACC's banks, saying they were post-dated and should post presented immediately on the right bounce. VAT Registration No: 842417633. Writing a cheque in advance: A cheque is written for paying something ahead of time i.e. If you have an option to exercise, then it is best to avoid writing a postdated 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. Small and Medium-sized Enterprises (SMEs) often rely on post-dated cheques, thus for a sturdy cash-flow, it is essential that cheques do not bounce. Do you have a cheque bounce case in the UAE? However, often innocent people are fooled by giving them cheques issued on bank accounts which have insufficient funds. 138 the cheque drawn must be for the discharge, in whole or in part, of any debt or other liability. The cheques have to be deposited into the payee’s bank account. A post-dated cheque is treated as a bill of exchange, till the date mentioned by the drawer of the cheque. If a cheque bounces it is treated as a criminal offence with the potential of jail time, hefty fines and an overall risk to your credit score. Post-dated cheque. Dubai’s Decree 56 of 2009 should serve to curb reliance on PDCs. When Dubai’s property market was booming, many developers collected post dated cheques (PDCs) from buyers. * and one of the two required files for a theme (the other being style.css). 2. Who is spend a legal procedure expense me r defaulter. Stale cheque i.e. 2.3K views View 3 Upvoters The cheque is post-dated or more than … Before we understand the definition of post-dated cheque and why it is issued, let’s understand little more about the cheque. ?>, 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. The court held that if it holds otherwise, then every creditor would abuse the provisions of this section by obtaining blank cheques and putting the debtors in fear of prosecution and insist on discharge of the debts at any time. Looking for a flexible role? I am a trader, my clients provide me PDC cheques (post dated). According to Karnataka High Court in some of its cases  , a distinction between issue of cheque as security or in repayment of debt is illusory on the ground that where a cheque is prevented for payment according to its apparent tenor and dishonoured, it amounts to an offence under S.138 whatever may be the background story of the chequer. A cheque is the easiest means of payments in the business world. It is not transaction of loan, if the amount is to be repaid the moment it is paid to borrower. Debt collectors may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. Post-dated cheques are common and enforceable. Insufficient funds in the account of the person issuing the cheque 2. In the said case, the court itself agreed to the findings of the trial court  that despite repeated opportunities having been given to the appellant bank, they didn’t produce the accounts’ extracts for the relevant period  inspite of the records being with them. A cheque is a written instruction to a bank payable on demand. It also requires the certification of post-dated cheques by the bank so that it can pay the payee by debiting the issuer’s account or confiscating the property; in case such a cheque bounces  . I initially gave a downpayment of 1,000 cash and post-dated a check for the amout of 2,700. In simple words, a cheque is a form of a bill of exchange which orders the bank to pay an amount of money from a person’s account to another individual’s or company’s account in whose name the cheque has been issued. Post dated cheque i.e. A cheque must bear a date because the mandate of the customer to the banker given in the cheque becomes legally effective on the date mentioned therein. A post-dated cheque becomes a cheque for the purpose of S.138 of the Act only on the date mentioned thereon and in between the date of drawal of the cheque and the date mentioned in the cheque, it is only a bill of exchange. Submitting post-dated cheques by borrowers is a customary practice for home finance and other retail products like personal, auto and consumer durable loans. According to the court, in such a case there was no existing debt or liability when the cheque is issued. [This is a Sample Warning Letter after Cheque Bounce or Dishonor. The cheque as drawn therefore is a cheque in proper form and therefore, a bill of exchange within the meaning of the Act  . Here, it is important to note that cheque will be presented to the bank either on the date written on cheque and after the date. 2. Hence the bank has to return the cheque with the reason “Cheque is post dated”. In this scenario, situation is similar to a ‘simple cheque’. Your paycheque gets held up for some reason, the cheque bounces. * @since 1.0.0 For instance, in Venugopalan v. Moosa  , the complainant alleged that the respondent/accused had borrowed an amount of Rs. The successful model of fast-track courts as suggested by Law Commission should be followed; wherein the 1,735 fast-track courts of sessions judges were set up for long-pending cases and they disposed off 10.66 lakh cases between 2000 and 2005  . Such a blank cheque doesn’t constitute a cheque and thus S. 138 doesn’t apply in this situation  . Cashing a Postdated Check Before the Date Shown . you write a cheque, post dated, and it is accepted as post dated payment. If my cheque is bounced what is the legal action i do? When the bank finds a cheque fraudulent, it bounces it. Business Impact of e-Invoice: What will Change? I live in CA and I recently purchased a 24k brand new car. 1. The rest remains the same. To simply put, post-dated cheque is one which is drawn with a date which is after the date on which cheque was written. How much time i refund my money by legal procedure. * E.g., it puts together the home page when no home.php file exists. Some time payment cheques and post dated payment cheques get dishonored when presented in the banks. Post-dated cheques are not invalid but the bank would not cash such a cheque if presented before due date. 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. World trade is carried through banking operations rather than cash transactions. Post dated cheque i.e. Farmers are very often at the receiving end of such cases filed under Section 138 and often end up in jail. Criminal Appeal Number 77 of 2006, in session dated 26 July 2006 states that assuming the cheque issuance follows the legalities of doing so, the crime of issuing a bounced post-dated cheque occurs even if the issuer is aware of the insufficient funds in their account and issues the cheque as … While issuing the cheque, when the drawer mentions a future date rather than the date on which is it being issued, then such cheques are called post-date cheques. However, we need to treat a cautious line by preventing the situation that arose in Pawan Enterprises case  where the amount due at the time of presentment was lower than that written on the post-dated cheque. Even if your payee (the recipient) is honest, they may make the honest mistake of forgetting and leaving you with bad cheque fee. A cheque is a negotiable instrument.  ”. But in reality, it is not always advisable to issue a 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. [The following post is contributed by Sneha Bhawnani, who is an Assistant Legal Advisor at Vinod Kothari & Co. She can be contacted at email@example.com.] So, in my opinion, this was the secondary reasoning of the court that the said cheque was kept as a security but not against a debt payable to the appellant. In 1998, the Supreme Court ruled that a post-dated cheque is a bill of exchange and does not become payable on demand until the date written on the cheque A "post- dated cheque" is only a bill of exchange when it is written or drawn, it becomes a "cheque" when it is payable on demand. I initially gave a downpayment of 1,000 cash and post-dated a check for the amout of 2,700. The gap between 27th Jan and 3rd Feb is the wait time here. 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