Cheque for not filing an appeal cannot found Section 138 liability when the underlying agreement is void and against public policy.

A cheque issued as consideration for refraining from filing an appeal does not support liability under Section 138 of the Negotiable Instruments Act, 1881 where the underlying agreement is opposed to public policy and void under Section 23 of the Indian Contract Act, 1872. Because Section 138 requires a legally enforceable debt or other liability, a cheque founded on a void and unlawful agreement cannot create the necessary enforceable obligation. The complaint was therefore not maintainable, as the alleged consideration itself disclosed that the cheque was issued for an unlawful object incapable of founding criminal liability.

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Issues: Whether a cheque issued as consideration for not filing an appeal against an order could found liability under Section 138 of the Negotiable Instruments Act, 1881 when the underlying agreement was alleged to be opposed to public policy and void under Section 23 of the Indian Contract Act, 1872.

Analysis: Liability under Section 138 must arise from a legally enforceable debt or other liability. Where the promise or consideration is to induce a person to refrain from pursuing legal remedies in return for money, the object of the agreement is unlawful if it is opposed to public policy. An agreement with such an unlawful object is void from the inception, and no enforceable liability can arise from it. Since the complaint itself disclosed that the cheque represented consideration for not preferring an appeal, the foundational requirement of legally enforceable liability was absent.

Conclusion: The cheque did not represent a legally enforceable debt or liability, and the complaint under Section 138 of the Negotiable Instruments Act, 1881 was not maintainable.

Final Conclusion: The prosecution based on the cheque transaction could not be sustained because the underlying agreement was void and incapable of creating an enforceable liability.

Ratio Decidendi: A cheque issued in pursuance of an agreement whose object is unlawful or opposed to public policy does not attract Section 138 of the Negotiable Instruments Act, 1881, because no legally enforceable debt or liability arises from a void agreement.

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