Overdraft facility in bank account

TUSHAR (Querist) 19 May 2016 This query is : Resolved
If a customer has been sanctioned a limit by his bank as overdraft in his Current Account or Cash Credit account, and on a day the balance of account becomes zero. What will be the status of loan documents? Will they be legally enforceable, for the debit raised on later dates? Material fact is that I had sanctioned a limit of Rs.10.00 lacs to one borrower, with all documents executed. Balance of account on 01/08/2013 had become Zero. Now will we have to make a fresh agreement and documentation, since there is no consideration? What does Contract Act says? Please reply

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Isaac Gabriel (Expert) 19 May 2016
The bank could have the documents signed by you at the time of according overdraft, and it will be enforced if exceeded the limit.

Sudhir Kumar, Advocate (Expert) 19 May 2016
give facts of the case.

Rajendra K Goyal (Expert) 19 May 2016
Academic query, state clear facts.

P. Venu (Expert) 20 May 2016
Please state the material facts.

Rajendra K Goyal (Expert) 22 May 2016
Repeated query:

http://www.lawyersclubindia.com/experts/Validity-of-loan-documents-599911.asp

T. Kalaiselvan, Advocate (Expert) 23 May 2016
The bank can legally enforce recovery action for the amount due to the bank on the basis of the documents held in its custody.

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