Demand draft being held by the party despite of requesting t
Shama
(Querist) 11 November 2016
This query is : Resolved
Hi..
I made a DD of 3lakhs on last friday 4the of november with the help of a friend who was supposedly guiding us into his ecommmerce business. But then the DD was made in the name of Vihan direct Sales pvt ltd. And they work for some qnet.. which I was not aware of. I genuinely Ely didn't know what qnet or vihan is. And we were not even informed in advance abt this mlm or chain marketing business.
After he dd was made, my friend kept the DD with him . On my way back home I researched a lot abt this company and I just didn't want to get associated with it. I wrote emails to all the authorities from qnet .. as vihan is said to be their sales division or franchisee operating from india.
Simultaneously I requested my friend to return me d DD as we are not interested in it.
So he said it's couriered to vihan direct sales in bangalore. I tried following up with some ppl from vihan direct . Immediately the next morning. But no response as it was a Saturday and Sunday. Ppl out there from vihan didn't gv me any details as they didn't recieve the dd. My friend also deliberately didn't gv me courier details as I would have stopped the courier from reaching them and return the dd to kya bank as my bank was ready to help provided I had the original dd with me.
The day my friend gave me the courier slip copy via whatsapp and I traced the courier guy the same time DD was recieved by the security guard from vihan direct sales pvt ltd.
Now when I intimated their team that you guys have recieved the courier pls send it back to me. They are denying to send it to me and say that we will have to follow the procedures as you are enrolled in our business we cannot courier it back to you. Rather you let the DD get cared and apply for a refund. But we can't promise anything deductions from it.
In this case can my bank help me by stopping this DD from being cleared and get me my refund. Pls help.. shama.flexione@gmail.com
Shama from Mumbai.
adv.bharat @ PUNE
(Expert) 11 November 2016
Yes you can request the bank official about it.
Kumar Doab
(Expert) 11 November 2016
Write to establishment not to encash the DD.
Meet BM of bank and check payment can be blocked.
Discuss with your own counsel if you should cancel ( without any adverse effect on you) DD or stop the payment.
Show all documents with you.
Rajendra K Goyal
(Expert) 11 November 2016
Payment of DD can not be stopped by the issuing Bank. Even purchaser of the draft can not get the payment stopped if it has reached in the hands of payee.
Rajendra K Goyal
(Expert) 11 November 2016
Have you sent e-mail confirming that you do not want to start relation with the company and return the draft / amount sent to them immediately?
If, not send e-mail referring your telephone to return the draft, followed by the registered letter.
You have to file case if no action from them. Include your friend as defendant in the case.
Shama
(Querist) 11 November 2016
I've been sending emails to them right from5th of Nov. But they are just he'll bent they won't return they will encash and follow refund process only
Rajendra K Goyal
(Expert) 11 November 2016
Send registered notice.
They would not return easily, you should be prepared for long litigation.
Kumar Doab
(Expert) 11 November 2016
If you have sent emails then probably you have not signed any agreement.
Rest show all docs on record to your own counsel for a considered opinion.
Guest
(Expert) 11 November 2016
If DD not yet en-cashed, your bank can work only on the stop payment instruction, if you give in writing, not otherwise.
However, if DD is encashed even before receipt of your stop payment instruction to the bank, your bank will be helpless to render you any such expected service.
M V Gupta
(Expert) 12 November 2016
I agree with Shri Dhingra. Issue stop advice at once in writing to your Bank.
Rajendra K Goyal
(Expert) 12 November 2016
Respected expert PS Dhingra ji,
I humbly differ regarding stop payment of demand draft by issuing Bank before payment at payee Branch, if it has reached in the hands of payee, even if given in writing by the purchaser.
After reaching in the hands of payee, the contract between purchaser of draft and Bank come to an end and contract / relation between payee and Bank starts.
Agree, if DD is still in the hands of purchaser, he has right receive payment by cancellation.
Guest
(Expert) 12 November 2016
Author, Even the D/D could be Stopped Payment On Valid Grounds Even if is Handed Over to the Person/Company in which Name it was taken Subject to It was Not already Presented for clearance till the Time of Stop Payment Instruction Submitted to Concerned Bank.
Guest
(Expert) 12 November 2016
Rajendra ji,
The author has asked his query with particular reference to Legal Documents, not even on contract. Moreover, the DD, as per the author is in wrong hands, Qnet, while the DD was prepared in the name of Vihan direct Sales pvt ltd for the purpose of business (contract), but the said party proved to be merely a franchisee of Qnet, who was neither the principal, nor payee, with whom the contract could have been enforced.
So, the instrument was not legally enforceable by Qnet.
As such, my reply was as per the context (legal document), not to address any other issue, like contract.
If you still feel anything wrong in my reply, you may advise me with specific reference to the relevant law.
Kumar Doab
(Expert) 13 November 2016
Have you issued any communication on stop payment to bank?
Do you have any document stating that you may prepare DD in name of say'X' and send to 'Y'?
Rajendra K Goyal
(Expert) 13 November 2016
Respected Dhingra sir,
You may be right.
However, Bank has received payment in advance on behalf of payee and issued the instrument, it is a cheque issued by Banker in favor of payee, no concern with purchaser of DD in normal course. Payee can get the payment stopped, if it confirms that the instrument has passed in his hands / delivered to him.
Purchaser can get the payment by cancellation of DD, if original presented considering it has never gone in the hands of payee.
If lost, purchaser can get duplicate issued by submitting indemnity.
For cancellation of Duplicate draft, consent of payee is required.
Rajendra K Goyal
(Expert) 13 November 2016
Respected Dhingra sir,
Only payee mentioned on the draft is authorized to receive payment, if paid to other than the payee, Bank is liable for wrongful payment.
If purchaser purchased in the name of wrong payee, issuing Bank can cancel it if original presented, can not stop the payment. Bank would be liable if paid to wrong person mentioned as payee by the purchaser.
Sir, if payee mentioned on the DD is Qnet, Qnet is authorized to receive payment of the instrument. However, if the payment was not meant for Qnet, but draft purchased in its name and paid, recovery is to be done by civil litigation / out of Bank operative process.
I have shared views, if not legally correct, would welcome my senior(s) to correct me.
Guest
(Expert) 13 November 2016
Rajendra ji,
I humbly differ with your contention, "If purchaser purchased in the name of wrong payee, issuing Bank can cancel it if original presented, can not stop the payment. Bank would not be liable if paid to wrong person mentioned as payee by the purchaser."
As per the statement of the author, the DD has not been paid yet. Also, I have not advised the author anywhere to get the DD cancelled before presentation of the original DD.
About stop payment, you may please like to recheck the position. The purchaser of DD is fully authorised to stop payment of DD before it is actually paid, even to the drawee, what to say of some other holder.
The bank cannot pay the DD after stop payment instructions by the remitter. The bank cannot also disown its liability to repay the amount to the remitter till it is paid to the drawee and cancellation of DD if sought on signing of an indemnity bond even in the absence of the DD if not returned by the holder of the DD.
Please note, as per the author's statement, Qnet cannot be said to be the holder in due course, unless DD is endorsed by the drawee in favour of Qnet. As stated, the payment was not intended to be made to Qnet by the author.
Guest
(Expert) 13 November 2016
Please refer my Last Post in the Same Thread Once Again.
Kumar Doab
(Expert) 13 November 2016
Did you sign agreement?
It is not clear what exactly you have written in emails!
Hope you have written to the bank to not to clear the DD!
Rajendra K Goyal
(Expert) 13 November 2016
Respected Dhingra sir,
Draft is a cheque issued by the Bank (with signatures of manager at the place of drawer), Bank has received the payment in advance on behalf of payee, its stop payment instructions would liable the Bank for dishonor. Purchaser is no where in the scene once draft is issued. Draft partly covers the ingredients of Bill of exchange. Bank is trustee of the fund related to DD.
Practically, if Bank has issued duplicate Draft on the basis of non payment certificate from payee Branch, even than payee Branch can not refuse the payment of original draft if presented. If both paid, Bank can invoke indemnity taken while issuing duplicate draft.
Sir, this is general accepted custom / practice of Banking that payment of a Demand Draft / Bankers cheque can not be stopped.
Guest
(Expert) 13 November 2016
Practically the Fact is Stop Payment could be done to D/D which had been handed Over Also For which Banker Could be No way held Responsible and his Act is Purely on Instructions.Bank Could be held responsible If Stop Payment Instructions Were Not Followed.
Guest
(Expert) 13 November 2016
Rajendra ji,
Custom, practice and logic are different from law of bills of exchange. So, it will be better if you recheck about the commercial system of bills of exchange and the provisions of banking laws before making your final views.
Even duplicate DD is not issued on demand by the payee. Only the drawer can request for duplicate DD. The process of issue of duplicate DD is started only after completion of formalities by the drawer (not the drawee), i.e., written instructions for stop payment, written request for duplicate DD, FIR of loss, indemnity bond by drawer (not drawee). Stop payment instructions are conveyed immediately to the drawee bank by the issuing bank. Ultimately, only after confirmation of non-payment by the drawee bank, duplicate DD is issued by the issuing bank that too by cancellation of the original DD with cancellation advice issued to the drawee bank. Even the duplicate DD is handed over to the drawer under acknowledgment, not to drawee by the issuing bank.
I once again request you that before stretching the thread, you may recheck the commercial system of bills of exchange and the provisions of banking laws and point out even openly on this thread where you find me wrong on this issue.
