High Court Upholds Validity of Post-Dated Cheques in GST Payment Dispute, Allows Trial Under Negotiable Instruments Act.

The petitioner issued two post-dated cheques bearing No. 622623 for Rs. 93,00,000/- and No. 622624 for Rs. 1,54,00,000/- to the respondent as per a Deed of Undertaking. The Deed stipulated that the petitioner would clear GST of Rs. 9,63,00,000/- for a firm, out of which 10% (Rs. 33,00,000/-) would be paid to the respondent. If the GST rate was 2%, the amount payable would be Rs. 1,54,00,000/-. The cheques were issued subject to fulfillment of certain conditions. The High Court held that such a stipulation regarding issuance of cheques could be valid. It found no ground to quash the complaint u/s 138 of the Negotiable Instruments Act or the cognizance taken by the Judicial Magistrate. The issues raised appeared to be matters for trial. The High Court rejected the petition invoking inherent powers for quashing, holding that no case for quashing was made out. .....

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