sh: `-c' requires an argument

I ran into this problem when running almost any command using psql, createdb or even trying to goto the shell using \!

The problem is that /bin/sh points to /bin/bash and my bash version is:

$ bash -version

GNU bash, version 1.14.7(1)

Here are the other errors:

$ createdb foo

PQexec() -- Request was sent to backend, but backend closed the channel before responding.

        This probably means the backend terminated abnormally before or while processing the request.

createdb: database creation failed on foo.

(in the log file it has the “sh: `-c' requires an argument” error)

Has anyone run into this problem? Or could give me tips to fix it?

Thanks

Girish