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Issues: Interpretation of Section 138 of Negotiable Instruments Act regarding applicability when a cheque is issued from a closed account.
In this judgment, the Supreme Court addressed the interpretation of Section 138 of the Negotiable Instruments Act, 1881, specifically in relation to whether the provision applies when a cheque is issued from a closed account. The Court disagreed with the High Court's interpretation that Section 138 would not be applicable in such cases, stating that the word 'maintained' in Section 138 had been narrowly construed by the High Court. The Court emphasized that such a narrow interpretation would defeat the purpose of the provision and that Section 138 does not call for such a limited construction. The Court referred to a previous case, Goaplast (P) Ltd. v. Chico Ursula D'Souza, to highlight the approach that should be taken in construing Section 138. The Supreme Court found that the High Court had not examined the merits of the case while deciding Criminal Appeal No. 317 of 2002 due to its opinion that Section 138 would not apply when a cheque is issued from a closed bank account. As a result, the Court set aside the High Court's judgment and remitted the Criminal Appeal for a fresh decision on merits in accordance with the law. The Court made it clear that all pleas would be open to be argued before the High Court and requested the High Court to decide the Criminal Appeal expeditiously. Finally, the Court allowed the appeal accordingly, signaling a favorable outcome for the appellant in this case.
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