• I cancelled deal, can seller sue me with section 138?

I saw 40 years flat in Mumbai and given seller 1 lac rupees cheque as token, no written agreement any. We verbally discussed that he will not deposit my cheque only after my home loan is passed. But still he did it and cheque got bounced as insufficient balance.

I cancelled deal after a week as property was not going into redevelopment.

Now he is demanding one lac rupees and treating me with section 138. Can he sue me? Is it legal?
Asked 2 years ago in Property Law
Religion: Hindu

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11 Answers

No he cannot do anything. A complaint under s.138 can only be filed if the person issuing the cheque has to pay a debt/liability to the other person ie person to whom the cheque is issued.

In your case you issued a cheque in anticipation of a deal which didn't go through. Therefore no liability/debt.

Rahul Mishra
Advocate, Lucknow
14088 Answers
65 Consultations

5.0 on 5.0


Since there is no written agreement, it is difficult for the seller to establish the existence of debt. 

In 138 case, it is mandatory that the holder of the cheque (seller) has to prima facie establish that the issuer of cheque(you) had a pre-existing debt and the cheque was issued to discharge the debt. 

Also, even under specific relief act, in the absence of registered agreement to sell, the seller cannot force you to buy his property. 

Except for wastage of court time and litigation time, the seller cannot derive any benefits whatsoever. so no worries. 

hope this information is useful. 

Rajgopalan Sripathi
Advocate, Hyderabad
2173 Answers
394 Consultations

5.0 on 5.0

In case seller issue you legal notice in your reply state that there is no debt due and payable 


that Rs one lakh was given as token to be deposited only after passing of home loan 


seller can file false cheque bouncing case against you 

Ajay Sethi
Advocate, Mumbai
94710 Answers
7529 Consultations

5.0 on 5.0

The ingredients for cheque bounce case are -

1. Cheque is signed by you

2. Cheque is issued for legal debts or liability

3. Cheque is presented within validity period of cheque. 

4. Cheque is bounced.

5. Legal notice is issued within 30 days from cheque  bounce for demanding money within 15 days of receipt of notice failing non payment,  complaint is filed within 30 days from lapse of notice period of 15 days.


Thereafter,  he can file complaint.  In your case, in case he is serious, he would send legal notice and thereafter file complaint . Since u hv a good case, you may plead  no guilty and contest the case.  He has to prove dues himself first.  Hence, feel free and do not concentrate on the subject till court summon is received from the court.

Dalip Singh
Advocate, New Delhi
1084 Answers
36 Consultations

5.0 on 5.0

Yes the seller can sue you 

When you give a cheque to someone, the law presumes that the cheque is issued towards discharge of a legally enforceable claim or debt 

But this presumption is rebuttable 

You can always prove the contrary 

But all that will happen at the time of trial 

In your defense you can always say that you had given the cheque not towards any debt owed by you to the seller but as part of a conditional verbal sale of property 

For now you cannot avoid the 138 legal proceedings 


Yusuf Rampurawala
Advocate, Mumbai
7510 Answers
79 Consultations

5.0 on 5.0

 Any cheque bounce will lead to consequences of  138 and builder being what they are, he may try to blackmail you by giving notice of bouncing of cheque and seeking payment of Rs.  L. Issue him a comprehensive reply, engage a senior advocate, you can come out of it.

Ravi Shinde
Advocate, Hyderabad
4042 Answers
42 Consultations

5.0 on 5.0

There is no legally liable debt between you and the seller.

He cannot sue you for cheque bounce offence because you have given this money as advance for purchase of the proeprty and not for repayment of any consideration amount received from him in the past.

Therefore you can deny the allegations leveled by him against you in the legal notice, if he had issue any and give a proper and fitting reply notice.

His case is not maintainable if he is approaching court with a criminal complaint.


T Kalaiselvan
Advocate, Vellore
84911 Answers
2194 Consultations

5.0 on 5.0

You can contest the same. Don't worry. 

Dear Sir,
If you need any further assistance.You can approach me through Kaanoon or LinkedIn.


Prashant Nayak
Advocate, Mumbai
31946 Answers
179 Consultations

4.1 on 5.0

Yes as you have issued a cheque he can sue you under Section 138 for cheque bounce. However if you have executed any agreement to sell, and there is any termination clause is there, it should be followed. The termination clause can act as a defense for you to cancel the deal and avoid liability of cheque bounce.

Abhiraj Jayant
Advocate, Delhi
49 Answers
1 Consultation

Not rated

if a cheque is bound then action under sec. 138 of NI Act is  initiated. In court you have to prove all this circumstances of why you gave cheque and why it bounced. If court is satisfied with your claim then you are saved. 

Abhilasha Wanmali
Advocate, Nagpur
1021 Answers
1 Consultation

4.8 on 5.0

Dear Client,

As per the facts you provided, he cannot sue you under Section 138 in The Negotiable Instruments Act, 1881 because for the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.

Thank You

Anik Miu
Advocate, Bangalore
8869 Answers
110 Consultations

4.7 on 5.0

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