Advocates Appeared:
For the Appellants : Veena Hari, Ria Elizabeth Joseph, Irene Elza Soji, K. Remiya Ramachandran, Varun Muraleedharan, Nirmal S.
For the Respondents: Sharan Shahier, Rakhy Baby, P. Gopal, Pushpalatha M.K.

Based on the provided legal document, the key argument notes are as follows:

1. Invalidity of Cheques Drawn on a Defunct Bank:
   Cheques issued on a bank that has ceased to exist due to amalgamation or merger are not considered valid negotiable instruments. Specifically, cheques drawn on the State Bank of Travancore after its amalgamation with the State Bank of India are invalid because they are not drawn on a "specified banker" as required by the definition of a cheque (!) (!) .
   

2. Definition of a Cheque and Banking Status:
   A cheque must be drawn on a recognized and specified banker for it to be valid. After the amalgamation, the erstwhile bank (SBT) ceased to be a bank and, therefore, any cheques issued on it post-amalgamation do not qualify as valid cheques under the law (!) (!) (!) - (!) .
   

3. Legal Implication of Bank Amalgamation:
   The transfer of business, assets, and liabilities, including cheques, from the defunct bank to the acquiring bank does not retroactively validate cheques issued on the defunct bank after the merger. Consequently, cheques issued on the defunct bank are not legally recognized as valid negotiable instruments (!) .

4. Liability Under Section 138 of the Negotiable Instruments Act:
   For liability to arise under Section 138, the cheque must be valid, drawn on a recognized banker, and maintained in an active account at the time of issuance. Since the account was not in existence or not maintained with a recognized banker when the cheques were issued, liability under Section 138 does not attach (!) (!) .

5. Effect of the Bank Merger on Existing Cheques:
   The endorsement "funds insufficient" on dishonoured cheques does not establish validity if the cheques themselves are invalid due to being issued on a bank that no longer exists. Therefore, such cheques cannot serve as a basis for criminal liability under Section 138 (!) (!) .

6. Legal Consequence and Court's Decision:
   All proceedings related to these cheques are to be quashed due to the invalidity of the cheques issued on a defunct bank. The court emphasizes that the mere dishonour and the endorsement of "funds insufficient" do not establish criminal liability when the underlying instrument (the cheque) is invalid (!) (!) .

7. Regulatory Framework and Recognition of Banks:
   The definition of a bank under relevant legislation and the regulatory framework for banking operations confirm that only recognized banking institutions are authorized to issue valid negotiable instruments. Post-merger, the original bank's cheques are not recognized as valid unless issued by the successor bank (!) - (!) .

8. Conclusion:
   Cheques issued after the bank's amalgamation, which are not drawn on a recognized banker, are invalid and do not attract liability under the law. The proceedings based on such cheques are to be dismissed accordingly (!) (!) .

These notes should assist in framing arguments that emphasize the importance of the bank's legal status at the time of cheque issuance and the criteria for the validity of negotiable instruments under applicable law.