Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd.
Supreme Court of India(2016) 10 SCC 458A post-dated cheque issued as security can still attract S.138 if the debt underlying the transaction is legally enforceable on the date the cheque matures. The test is not whether the debt existed when the cheque was drawn but whether it existed when the cheque was presented for payment. Once the loan was disbursed and the due date for repayment arrived, the cheques given as security crystallised into instruments for discharge of a legally enforceable debt. The argument that post-dated cheques given only as security are excluded from S.138 was rejected.