Sat. May 8th, 2021

Section 85A of The Negotiable Instruments Act, 1881

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85A.   Drafts drawn by one branch of a bank on another payable to order.— Where any draft, that is an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be indorsed by or on behalf of the payee, the bank is discharged by payment in due course.


If the purchase of the draft cancels it before it is delivered to the drawee and retains it in his own hands, he can treat at the bank which issued the draft as his debtor and as a creditor demand the amount from the bank and the bank would be liable to satisfy the demand; Sidhnath v. Punjab National Bank, AIR 1960 All 238; See also Tukaram Bapuji Nikkam v. Belagum Bank, AIR 1976 Bom 185.

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