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?
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.
Hi
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.
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
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.
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
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.
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.
You can contest the same. Don't worry.
Dear Sir,
If you need any further assistance.You can approach me through Kaanoon or LinkedIn.
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.
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.
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
