Post dating cheques in australia

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So, in the facts and circumstances of the case, it was held that the case does not fall within four corners of offence punishable under section 138 of the Act , 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.

It was opined that such a cheque was not issued voluntarily in discharge of a debt or legal liability.

This was a strong basis for the trial court to acquit the respondent and I think that this was the primary reasoning of the High Court in this case for acquitting the respondent.Later, at the time of presentment of the cheque by the appellant, one of these cheques was dishonoured on the grounds of insufficiency of funds. 138 the cheque drawn must be for the discharge, in whole or in part, of any debt or other liability.So the debt or other liability must be in existence when the cheque, whether blank or post dated was issued.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.In case of loan transaction, borrower is in need of money and therefore he borrows loan amount with understanding that the loan amount would be repaid in lumpsum on a future date or in installments from particular future date onwards periodically, with or without interest.

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