Cheque Deposit Letter Pursuant to a Loan Agreement.
A post-dated check is one which has a date after today's, so as not to be able to be cashed immediately. A bank may in some cases pay a post-dated check before the date on the check unless the customer notifies the bank not to pay it. It is not illegal to write a post dated check nor to give it out as long as there is no illegal intent.
The issue with post dated checks is that most banks will honor the check prior to the post date on the check, which means that the check may be deposited and prospectively honored prior to the future date written on the check. If the funds are not available at that time, then the check will bounce and the bank will not be responsible to you for attempting to honor the check draft.
In view of this judgment, where a post-dated cheque, though described as a “security”, is in fact issued to discharge or for satisfaction of an existing outstanding liability or debt, the provisions of section 138 will be attracted because the intention and purpose for the issuance of the post-dated cheque does not correspond to the nomenclature of “security” given to it.
The cheques issued in India have the validity period of three months and within this validity period, the cheques are to be presented for payment Sample:1 Mr. Raman issued a cheque for rupees 5000 dated; 17.10.2017 in favour of Kannan. Kannan can.
As we have agreed on our telephone conversation recently, I enclose three post-dated cheques totalling Rs. 6,344.90 as payment for our outstanding debt that my predecessor, Mr. Paul Lee, had allowed to accumulate. As you now know, Mr. Lee had absconded with a substantial amount of company money and he is now being sought by the law. Thus we are.
Legal experts said this week that complications from writing postdated cheques have remained steady amid the economic crisis. The most widely accepted form of security, post-dated or even blank.
It is an offence to write a cheque in settlement of an account if at the time you know that your bank account has insufficient cleared funds to meet the cheque on presentation. That's slightly different from the post-dated situation. In that context you deliberately post-dated the cheques so that funds would be available upon presentation. You broke no law by so doing.