{"id":71821,"date":"2016-09-20T20:13:24","date_gmt":"2016-09-20T14:43:24","guid":{"rendered":"http:\/\/www.scconline.com\/blog\/?p=71821"},"modified":"2016-12-08T17:56:07","modified_gmt":"2016-12-08T12:26:07","slug":"dishonour-of-post-dated-cheque-for-discharge-of-existing-liability-is-covered-by-section-138-of-the-negotiable-instruments-act-1881","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2016\/09\/20\/dishonour-of-post-dated-cheque-for-discharge-of-existing-liability-is-covered-by-section-138-of-the-negotiable-instruments-act-1881\/","title":{"rendered":"Dishonour of Post-dated cheque for discharge of existing liability is covered by Section 138 of the Negotiable Instruments Act, 1881"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: In the matter where the question as to whether the dishonour of a post-dated cheque given for repayment of loan installment which is also described as \u201csecurity\u201d in the loan agreement is covered by Section 138 of the Negotiable Instruments Act, 1881, was before the bench of Dipak Misra and A.K. Goel, JJ, it was held that the dishonour of cheque for discharge of existing liability is covered by Section 138 of the Act. The Court further explained that the question whether a post-dated cheque is for \u201cdischarge of debt or liability\u201d depends on the nature of the transaction. If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.<\/p>\n<p style=\"text-align: justify;\">As per the facts of the case, the loan agreement in question recorded that post-dated cheques towards payment of installment of loan (principal and interest) were given by way of security. The clause of the Agreement that came up for consideration was \u201cThe loan together with the interest, interest tax, liquidated damages, commitment fee, upfront fee prima on repayment or on redemption, costs, expenses and other monies shall be secured by deposit of Post-dated cheques towards repayment of installments of principal of loan amount in accordance with agreed repayment schedule and installments of interest payable thereon.\u201d<\/p>\n<p style=\"text-align: justify;\">Interpreting the word \u201csecurity\u201d is used in the said clause, the Court held that the said expression refers to the cheques being towards repayment of installments. The repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due. Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. [Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., , <a href=\"http:\/\/www.scconline.com\/LoginForNewsLink\/2016_SCC_OnLine_SC_954\">2016 SCC OnLine SC 954<\/a>, decided on 19.09.2016]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: In the matter where the question as to whether the dishonour of a post-dated cheque given for repayment of loan <\/p>\n","protected":false},"author":121,"featured_media":154914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[2862,3751,9431,9441],"class_list":["post-71821","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-dishonour_of_cheque","tag-Negotiable_Instrument_Act","tag-post-dated-cheque","tag-section-138"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO 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adjustment","author":"Arunima","date":"March 8, 2024","format":false,"excerpt":"The complainant woefully failed to account for the amount of Rs 6,11,071\/- which was due on him towards the accused. Therefore, it cannot be said that the amount represented on the cheque in question was a legally recoverable debt.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"failure to establish debt adjustment","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":308042,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/11\/29\/calcutta-high-court-upholds-acquittal-under-section-138-of-negotiable-instruments-act-1881-scc-blog\/","url_meta":{"origin":71821,"position":1},"title":"Calcutta High Court upholds acquittal under Section 138 of NI Act on failure to prove existence of legally enforceable debt","author":"Ritu","date":"November 29, 2023","format":false,"excerpt":"Calcutta High Court delved into the legalities surrounding the presumption under Section 139 of the Negotiable Instruments Act, 1881, emphasizing that it is a \u201crebuttable presumption\u201d.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"calcutta high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":364270,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/17\/ori-hc-insolvency-no-defence-for-directors-in-cheque-dishonour\/","url_meta":{"origin":71821,"position":2},"title":"Insolvency proceedings no shield for Directors in cheque dishonour cases under S. 138 NI Act: Orissa HC","author":"Editor","date":"October 17, 2025","format":false,"excerpt":"\u201cOn the request of the petitioner, the complainant waited and represented the cheque through its banker, but once again it got dishonoured with the same remark - refer to drawer.\u201d","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Cheque dishonour","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Cheque-dishonour.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Cheque-dishonour.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Cheque-dishonour.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Cheque-dishonour.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":370991,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/12\/26\/hc-roving-enquiry-debt-liability-quashing-section-138-ni-act-complaint-supreme-court-section-482-crpc\/","url_meta":{"origin":71821,"position":3},"title":"High Court Cannot Conduct Roving Enquiry into Debt or Liability While Quashing Section 138 NI Act Complaint: Supreme Court","author":"Prachi Bhardwaj","date":"December 26, 2025","format":false,"excerpt":"\u201cUnder Section 139 of the NI Act, there is a presumption that the holder of a cheque received the cheque of the nature referred to in Section 138 NI Act for the discharge, in whole or in part, of any debt or other liability. This presumption can be rebutted by\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Enquiry into Debt or Liability","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/12\/Enquiry-into-Debt-or-Liability.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/12\/Enquiry-into-Debt-or-Liability.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/12\/Enquiry-into-Debt-or-Liability.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/12\/Enquiry-into-Debt-or-Liability.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":324260,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/06\/13\/dishonour-invalid-cheque-cannot-attract-liability-s138-ni-act-allahabad-hc-scc-times\/","url_meta":{"origin":71821,"position":4},"title":"\u2018Dishonour of invalid cheque cannot attract liability u\/s 138 of NI Act\u2019; Allahabad HC holds Allahabad Bank cheques to be invalid post 30-09-2021","author":"Editor","date":"June 13, 2024","format":false,"excerpt":"\u201cFrom the perusal of Section 138 N.I. Act, it is clear that if any invalid cheque is presented before the Bank and the same was dishonoured, then no liability under Section 138 of NI Act would be attracted, and the cheque of Allahabad Bank is invalid after 30-09-2021 after merging\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Allahabad High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":364043,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/16\/rajasthan-hc-section-138-ni-act-on-cheque-for-time-barred-debt-revives-enforceability-under-contract-act\/","url_meta":{"origin":71821,"position":5},"title":"Cheque for Time-Barred Debt Revives Enforceability Under S. 25(3) Contract Act; Dishonour attracts Section 138 NI Act: Rajasthan High Court","author":"Editor","date":"October 16, 2025","format":false,"excerpt":"\u201cA meaningful reading of Sections 20, 118 and 139 of the NI Act makes it clear that a person who signs a cheque and delivers it to the payee remains liable unless he successfully rebuts the statutory presumptions.\u201d","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Section 138 NI Act on Cheque for Time-Barred Debt","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=700%2C400&ssl=1 2x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/71821","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/121"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=71821"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/71821\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/154914"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=71821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=71821"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=71821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}