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Rucha Pawar (legal executive)     09 April 2022

138 caseapplicability

Dear Sir,(s)

As against the sale deed we had issued some post dated cheques to the seller, but when he deposited cheques they got dishonoured ,

by the remark funds insufficient , but we after receiving the intimation from bank ,approx after 16 days of bouncing of cheques,  we had deposited the

cheque amount to the bank, But to our surprise the owner has sent us notice under N.I.Act section 138, after 15 days of receiving the amount in the bank. 

in the notice he is cancelling the sale deed  as per the clauses in the deed ; deed states that if the cheques are bounced the deed get cancel ;

 and stated that we had deposited the cheque amount against his wish .We cant find any legality in sending the notice to us . 

What option we have now Kindly guide in the matter.


 15 Replies

SHIRISH PAWAR, 7738990900 (Advocate)     09 April 2022


You have to reply to notice. If you dont pay the amount of cheque he may file cheque bouncing case in court. You may negotiate with him. If you pay the amount as per notice your sale deed may not be cancelled. 

Rucha Pawar   09 April 2022

Sir, we have already deposited the cheque amount to the seller. But still he had sent notice. 

Advocate Bhartesh goyal (advocate)     09 April 2022

Reply the notice with payment details.sale deed can not be cancelled when cheque amount has been paid.

1 Like

Shubham Bhardwaj (Advocate)     09 April 2022

Dear Mr Pawar, 

The situation is little tricky. 

What I could understand is that you gave cheque which got bounced but after that you directly deposited the amount in their bank. If this is true please note as below: - 

The things will come down on the wording of the sale deed. Generally, sale deeds are subject to the payment mentioned therein however if there is some problem in the payment later, the parties resolve it once the payment is made. 

However, in your case the cheque got bounced. Now, as far as Section 138 is concerned, the case is not maintainable and will be dismissed by the Court.

But the cancellation of sale deed is a different matter altogether. If the wordings of the sale deed stuipulated that the sale deed would be void ipso facto on cheque getting bounced, the other party then have a reasonabe case becasue in such a case the cancellation is ipso facto. Once sale deed becomes void, it really does not make any difference whether the other party cancels it or not. They simply have to file suit for declaring the sale deed as void. 

However, if the wordings of the sale deed does not have the effect of being void on cheque getting bounced, then you have a reasonable case and sale deed cannot be cancelled in such a scenario. 


Shubham Bhardwaj (Advocate)

District & Session Court, Chandigarh

Punjab & Haryana High Court, at Chandigarh


Disclaimer: - Opinion is only for guidance.

1 Like

Rucha Pawar (legal executive)     09 April 2022

Sir , Thank you so much for your guidance,

Sir , now about 138 case applicability we have good case , 

but sir the sale mentioned that " if the cheques bounces and

we do not receive the amount then the present sale deed will be cancelled ."

In  this case we have transffered the cheque amount to them so they cannot state that they do not receive the amount.

Sir , can we reply to the notice? 


P. Venu (Advocate)     10 April 2022

Facts posted do not suggest any grounds for initiating action for cheque bounce or for cancelling sale deed. To my knowledge, sale deed cannot be cancelled save by a decree from the competent court.

1 Like

Rucha Pawar   10 April 2022

Thank you sir .

Shubham Bhardwaj (Advocate)     10 April 2022

Dear Mr Pawar, 

Do not reply to the notice. Further, the wordings of the sale deed is not the one which would make it void on cheque getting bounced. The sale deed will have to be cancelled by the decree under specific relief act by the seller party. So i guess you are reasonably secured. 

But in case a suit arrives then take legal counsel. 



Shubham Bhardwaj (Advocate) 

District & Session Court, Chandigarh

Punjab & Haryana High Court, at Chandigarh

1 Like

Anand Bali Adv. (Advocate Solicitor & Consultant)     10 April 2022

Yes , the Sale deed may get cancelled if with in the given time frame the Seller don't get the full agreed amount of the consideration to sale.

You should specifically reply the Notice as wityhout reply you can not put your stake forward. and in its laps the Seller may legally sell the property to other Buyer. 

You also can file a case of specific performance for the same in the court of law, However the reply to the notice is must to be given, to the points raised in the mnotice.

Please beaware of the concequences of the Non reply of the Notice within the notice period.

1 Like

Rucha Pawar   10 April 2022

Sir thank you so much for your reply , we definitely reply to the notice.

G.L.N. Prasad (Retired employee.)     10 April 2022

Enclose the paid copy of the cheque after obtaining such a copy from the bank.

1 Like

Rucha Pawar   10 April 2022

Sure sir I'll enclose it. Thank you .

Dr J C Vashista (Advocate)     11 April 2022

Very well analysed, opined and advised by experts, I endorse and appreciate.

The vendor is well within his right to cancel the transaction as the same was endorsed (subject to realisation of cheque) in the agreement to sell and a condition precident to execution of sale documents.

Now did you inform / request the vendor / drawee of cheque to present the cheque again as you have deposited the amount to honour the cheque issued by you ?

If the drawee of cheque / vendor has issued a notice under section 138 of NI Act, did you reply it with a request to withdraw the same as you have deposited the amount to honour the cheque, if he may present the cheque for realisation or pay the cheque amount ?

You have complicated the simple issue of payment of consideration amount of the sale agreeement where vendor can exercise his rights.

It is better to consult and engage a local prudent lawyer for proper appreciation of facts, professional advise and necessary proceeding.

1 Like

P. Venu (Advocate)     11 April 2022

Yes, the Notice needs to be replied highlighting the factual position.

1 Like

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