Facts and Background

• The Appellant, Goa Plast (P) Ltd., a company that filed a complaint against the respondent for dishonour of cheques issued towards repayment of misappropriated company funds.
• The Chico Ursula D’Souza (Respondent) was the managing director of the Appellant company until July 1992, when 10 post-dated cheques totalled Rs. 4 lakhs were issued to settle the misappropriated funds.
• The cheques were dishonoured after the respondent instructed the bank to stop payment. Despite receiving a legal notice from the appellant, the respondent did not pay the cheque amount within the stipulated time, leading to the filing of a complaint under Section 138 of the Negotiable Instruments Act.
• The complaint was initially filed before the Judicial Magistrate, First Class, who acquitted the respondent on 25.08.1995, holding that the appellant failed to prove liability. The respondent successfully rebutted the presumption under Section 139 of the Act.
• The Appellant, aggrieved by the acquittal and the High Court’s dismissal of Criminal Appeal No. 37/1995, approached this Court.
  
  

Main issue:

Could the Respondent be held liable under Section 138 of the Negotiable Instruments Act after issuing a stop payment notice on the cheque?