Banking – Forged DD ( Demand draft) – Encashment – Bank entitled to recover the sums claimed from the person who encashed it

Banking – Forged DD ( Demand draft) – Encashment  –  If it was a stolen leaf on which signatures of bank officials were forged to prepare the DD, then that clearly was not a valid instrument and could not have been honoured – Negotiable Instruments Act, 1881, Section 118  shifts the burden of proof to the person who has accepted such instrument in due course and acting upon it – Section 72 of the Contract Act, 1872 or the principles of equity can be invoked in such circumstances – Petitioners had acted on demand drafts which were prepared on stolen draft leaves, bank drafts were fraudulently prepared on stolen bank draft leaves –  These were not valid instruments and could not have resulted in any valid credit…..

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being made in the accounts of the petitioners –  The Bank was simply not liable to honour such DDs – Whether if the payment had been made by using fake currency, which both Petitioners accepted bonafide, any valid credit could have been given in their accounts by the respective bankers, who may have accepted such currency without checking them first – The answer had to be in the negative – A fake currency, even if acted upon bonafide and given credit, could not have resulted in such credit being continued once the fraud was discovered. The principle can be no different in the instant case – Bank entitled to recover the aforementioned sums claimed against the two Petitioners – Recovery of Debts and Bankruptcy Act (RDB Act), 1993.