Ratios:
a. There should be a legal liability to pay the cheque amount for prosecution for its dishonor.
b. When sale deed was not executed, the balance amount due on an agreement is not a legally enforceable debt and prosecution for dishonor of cheque cannot be launched.
c. When the debt is legally enforceable, civil and criminal remedies are available to the payee of the cheque.
d. Issuance of cheque towards amount due and payable is necessary for prosecution under Sec.138 of N.I.Act.

1. This Criminal Appeal has been preferred against the Judgment, dated 07.05.1999 passed in C.A.No.74 of 1999 on the file of the III Additional Sessions Judge, Chennai, reversing the Judgment, dated 02.04.1998 passed in C.C.No.1188 of 1993 on the file of the XVII Metropolitan Magistrate, Saidapet, Chennai whereby the respondents/accused were convicted by the trial court. The appellants 2 to 9 in the criminal appeal are the legal representatives of the deceased appellant, who was the complainant before the trial court.

2. After the trial, considering the evidence available on record and the arguments advanced by both sides, the trial court found that the respondents/accused were guilty under Section 138 of Negotiable Instruments Act, accordingly, convicted the second respondent herein and sentenced him to undergo 3 months 10 days simple imprisonment. The first respondent was also convicted and sentenced and directed to pay Rs.1,50,000/- towards the cheque amount as compensation to the complainant.

3. On appeal, the aforesaid Judgment was reversed by the court below, whereby the respondents herein were acquitted. Aggrieved by which, criminal appeal has been preferred by the deceased complainant. After his demise, his legal representatives were added as appellants 2 to 9.

4. It is an admitted fact that the cheques were given pursuant to the sale agreement entered into between the respondents herein and the deceased complainant. It is not in dispute that an advance amount of Rs.50,000/- was paid by way of cheque, that was encashed by the complainant. However, the other two cheques for a total sum of Rs.1,50,000/- issued for balance of sale consideration were dishonoured, due to which, the complaint was filed under Section 138 of Negotiable Instruments Act.

5. It is not in dispute that the sale deed was not executed by the complainant, pursuant to the agreement. Mr. R.C. Paul Kanakaraj, learned counsel appearing for the respondents submitted that the petitioners herein have not performed their part of the contract and therefore, as held by the appellant court, the complainant has not established that the cheque was issued for an amount that was legally due and payable by the respondents herein to the complainant or the appellants. As the cheques were issued towards the performance of the contract by one party namely, the respondents herein, without performing their part of the contract by executing the sale deed, neither the complainant nor the appellants can claim the balance of sale consideration from the respondents. Further, when a civil case is pending with regard to the said agreement for sale between the parties, without performing their part of performance under the contract, the appellants cannot have legal right to claim the cheque amount.

6. In the complaint itself, the original complainant, deceased K. Deivasagayam has specifically stated that the first respondent, church represented by the second respondent, had given three cheques to the complainant as advance for the purchase of house site. The first cheque, dated 14.07.1992 for a sum of Rs.50,000/- drawn on Indian Overseas Bank, the second and third cheques, dated 22.07.1992 for a sum of Rs.50,000/- and Rs.1,00,000/- respectively drawn on Indian Overseas Bank. The first cheque, dated 14.07.1992 was presented for payment and the amount was realised, only the other two cheques were dishonoured due to insufficient funds. Subsequently, legal notice was issued to both the respondents, directing them to pay the amounts, as per the cheques, that were dishonoured due to insufficient funds. As the cheque amounts were not paid by the respondents, the complainant filed the complaint under Sections 138 and 142 of Negotiable Instruments Act.

7. In the impugned judgment passed by the court below, it was held that pursuant to the agreement for sale, there was a dispute between both the parties and a civil dispute is pending.

8. Learned counsel, Mr. R.C. Paul Kanagaraj, ap