The Karnataka High Court has delivered a crucial interpretation of Section 138 of the Negotiable Instruments Act. It ruled that criminal proceedings for cheque bounce cannot be sustained if the dishonour was solely due to a debit freeze on the account ordered by police in a separate investigation, provided the drawer had sufficient funds and no control when the cheque was presented.
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- ›Court & Judge: Karnataka High Court, Justice M Nagaprasanna
- ›Legal Provision: Section 138, Negotiable Instruments Act, 1881
- ›Target this Legal Point: Section 138 of the Negotiable Instruments Act, 1881.
- ›Target this Nodal Body: Karnataka High Court.
- ›Target this Defence: 'Debit freeze' or 'account block' ordered by police.
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