Demand Draft Cancellation: To acquire a draft, an individual typically pays the amount upfront to the bank, demand draft cancellation charges which then issues the draft. The purchaser subsequently dispatches the draft to the payee’s location through either regular or registered post. The bank, responsible for issuing the draft, imposes a commission for providing this service.
Demand Draft Cancellation Guide
i) Non-Delivery of Draft to the Payee: There are instances where a draft purchased from the bank is not dispatched to the payee for various reasons. In such situations, the purchaser is entitled to a refund of the draft amount. The purchaser can request the bank to annul the draft and return the amount. demand draft cancellation charges
ii) Bank’s Obligation: The bank is obligated to reimburse the draft amount to the purchaser, but this action is contingent upon the bank’s satisfaction that the draft has not been handed over to the payee. The contract between the bank and the payee remains incomplete until the draft is delivered, making it revocable until the actual delivery to the payee.
iii) Legal Provisions: As per Section 46 of the Negotiable Instrument Act, the completion of a promissory note, bill of exchange, or cheque is achieved through delivery, either actual or constructive. In the case of an order instrument, mere endorsement without delivery does not transfer the title to the endorsee. Delivery of the instrument is indispensable. Thus, unless the draft is delivered to the payee, the payee has no legal claim to the draft, and the purchaser can request the cancellation and refund of the draft amount.
iv) Bank’s Discretion to Decline Draft Cancellation: If the bank suspects that the draft has already been delivered to the payee, it may reject the cancellation request. This is because the contract between the bank and the payee is considered complete upon the delivery of the draft. The bank becomes liable to pay the draft amount to the payee and cannot cancel the draft without the payee’s confirmation.
FAQ
To cancel a demand draft, the purchaser should visit the issuing bank, fill out a demand draft cancellation form, and provide the draft for cancellation. The bank will verify that the draft has not been delivered to the payee and may refund the amount.
Yes, the purchaser of the demand draft has the right to cancel it. However, the cancellation is subject to the condition that the draft has not been delivered to the payee.
Generally, there is no specific time limit for cancelling a demand draft. However, it is advisable to initiate the cancellation process as soon as possible to avoid any potential issues.
The purchaser typically needs to provide the original demand draft, a duly filled cancellation form, and identification documents as per the bank’s requirements
Banks may charge a nominal fee for the cancellation of a demand draft. The exact charges can vary between banks.
