Post Dated Cheque given as an advance does not constitute an offence under Section 138 of Negotiable Instrument Act:-

Post Dated Cheque given as an advance does not constitute an offence under Section 138 of Negotiable Instrument Act:-
If a post-dated cheque is given to any person / seller as an advance in lieu of or towards purchase of any item and thereafter the cheque is bounced then it does not constitute an offence under Section 138 of Negotiable Instrument Act. The same has been held in the matter of:- Indus Airways Pvt. Ltd. v. Magnum Aviation Pvt. Ltd. decided on April 7, 2014 in Criminal Appeal No. 830 of 2014 by a bench of Justice R.M. Lodha and Justice Shiva Kirti Singh.
While adjudicating the above-said case law, the Hon’ble Supreme Court of India referred to the Explanation appended along with Section 138 of the Negotiable Instrument Act “debt or other liability”, which is mentioned as follows:-
“Explanation. – For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”
The Hon’ble Supreme Court of India held as under:
“… The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an exiting debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.”
As for instance, if a person / purchaser based in Green Park, Delhi comes intending to purchase some goods from a seller in Hauz Khas, Delhi. One of the terms and conditions of the contract is that the purchaser based in Green Park, Delhi has to give entire payment in advance and therefore the purchaser based in Green Park, Delhi gives a post-dated cheque as an advance to the seller in Hauz Khas, Delhi for the goods. Subsequently, the purchaser based in Hauz Khas, Delhi cancels the order and requests the seller based in Hauz Khas, Delhi to return the post-dated cheque and also made a request to his banker based in Green Park, Delhi for the stop-Payment. But the seller based in Hauz Khas, Delhi presents the post-dated cheque before his banker in Hauz Khas, Delhi and cheque given by the purchaser based in Green Park, Delhi bounces. Under these circumstances, the purchaser based in Green Park, Delhi will have no liability for the post-dated cheque given to the seller based in Hauz Khas, Delhi under Section 138 of Negotiable Instrument Act.