Legally enforceable debt under cheque dishonour law can arise from an agreement to sell, and quashing was improper.

Cheques issued under an agreement to sell may amount to cheques issued towards a legally enforceable debt or liability for Section 138 of the Negotiable Instruments Act when they are part of an enforceable contract. Whether a contractual clause postponed the obligation to honour the cheques was a factual question that could not be finally resolved in proceedings under Section 482 CrPC. The High Court therefore should not have quashed the complaints, and the Section 138 proceedings were restored for trial.

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Issues: Whether cheques issued under an agreement to sell could be treated as issued towards a legally enforceable debt or liability for the purposes of Section 138 of the Negotiable Instruments Act, 1881, and whether the High Court was justified in quashing the complaints in exercise of Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The cheques were issued in pursuance of the agreement to sell, and a payment made under such an enforceable contract can constitute payment towards a legally enforceable debt or liability for the purposes of Section 138. The question whether Clause 4 of the agreement postponed the obligation to honour the cheques depended on facts and evidence, and could not be conclusively determined in proceedings under Section 482. The subsequent transaction entered into by the respondent also supported the view that the High Court's interference was unwarranted.

Conclusion: The High Court was not justified in quashing the complaints, and the complaints under Section 138 were restored for trial.

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