Legal Question in Banking Law in India

24.10.2015

Dear Sir / Madam,

You should simply tell your Customer to obtain a supporting letter from the Customer's Bank that the Foreign Currency Demand Draft issued to you is authentic and genuine against their Purchase Order, and you should produce that letter in the Court.

Regards,

Sir

The facts may not be that simple as you mentioned. Need more detailed documents to review and bank correspondence. If the Draft was fraud, then at the first place it would had never been credited in INR. Second thing, under Banking Regulations, Drafts / Cheques are authorized by the issuing bank. Only after clearance from issuing bank that such Draft / Cheques will be realized and the amount will be credited.

So once the amount is credited then that means the draft is clear and approved by the issuing bank. If subsequently bank says it is fraud, then bank would certainly had produce documents in court to justify their say. Also, the court would not pass any orders without hearing you and bank, A full fledge trial would had been conducted and you could had produced your defense thereto.

Also, did you confront your buyer that if the amount was duly debited from his account and pursuant thereto such draft was issued by the Bank. Also, did you get any certificate from the bank that such draft was genuine.

The facts are more than what you mentioned. Since bank has won as you said, you have remedy of Appeal to higher forum. Where you can also produce additional documents in support of your case.

Feel free to contact me for any assistance.

Regards

Vivek N Mapara

vnmlaws.com