GOAPLAST PVT. LTD. vs CHICO URSULA D' SOUZA

The Supreme Court held that the mere act of stopping payment on post-dated cheques before their due date does not exempt the issuer from liability under Section 138 of the Negotiable Instruments Act, 1881. The Court clarified that the lower courts misinterpreted the law by treating the cheques as mere bills of exchange prior to their due date, thus ruling that the offence under Section 138 is applicable once the cheque is presented for payment and returned unpaid. The Court reversed the decisions of the Magistrate and the High Court, allowing the appeal and reinstating the complaint under Section 138.