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Withdrawing money from account after death via cheque

Querist : Anonymous (Querist) 29 November 2021 This query is : Resolved 
My father died in India about a year and a half ago. I live overseas so was not able to visit until recently due to Covid travel restrictions. I went through the process of filing disease claims at banks. I found that one person that my father trusted withdrew a large sum of money from his account a few days after his death via a cheque. This person is not a family member, and I am the only legal heir. He was aware of my father's death and also attended the funeral. He claims the money was given to him by my father for a charitable cause. My first question is whether is it legal for someone to encash a cheque from a bank account of a deceased person in India? My second question is do I have a recourse to pursue this and recover the amount? Thank you.
kavksatyanarayana (Expert) 29 November 2021
You have to check whether your father issued him a cheque with his signature to the bearer of the cheque or illegally got that amount. How can we say that it is forged or otherwise? As you are out of India, your father might have been issued a cheque for any reason. So first inquire about this.
J K Agrawal (Expert) 29 November 2021
question is different. suppose he was having cheque validly even though can he produce cheque before bank when he knows that drawer expired?
SHIRISH PAWAR, 7738990900 (Expert) 30 November 2021

If you have doubt that, another person has misused the cheque and played fraud on you and your late father. Then definitely you can take legal action including a police complaint against that person. Find out the actual cause and take appropriate action.
P. Venu (Expert) 30 November 2021
The legal position, in this context, has been stated by the Delhi High Court in Sh. Vijay Singh & Ors vs Smt. Manali Malik & Ors -

"11. Under Section 31, the liability of the bank as drawee of the cheque is, subject to having sufficient funds of the drawer in its hands properly applicable to the payment of such cheque, to pay the cheque when duly required so to do. It is only when the bank defaults in such payment that it becomes personally liable to compensate the drawer for any loss or damage caused by such default. Else, bank as a drawee of the cheque is not liable personally for default in payment thereof. The text book on the Negotiable Instruments Act by Bhashyam & Adiga (17th Edition) under Section 31 thereof states that at the instant of the death of the drawer, the title to the balance vests in his legal representative and his own order is not competent to withdraw any part of that which is no longer his property. It is further stated that on death of a customer, the order of the customer comes to an end and only if the banker pays the cheque before notice of death, is it valid. It would thus appear that the death of customer terminates his authority to order payment and operates as a countermand of the outstanding cheque."

Thus, the encashment could be taken to be unlawful if that person had the knowledge of the death of your father. However, it is requires credible evidence to prove that he had encashed the cheque with that knowledge.
J K Agrawal (Expert) 30 November 2021
Well answered by VENU sir.
Querist : Anonymous (Querist) 01 December 2021
Thank you so much for your reply Mr. Venu and others who took the time to respond to my query in detail. I appreciate your inputs. I do know that the person who encashed the cheque had full prior knowledge of my father's death as he attended the funeral. I am hoping that he will return the funds in good faith as he has mentioned, but will have to determine a course of action to pursue recovery of the funds from this person if he does not do so willingly. Is there a statute of time limitation within which I need to take action?
Dr J C Vashista (Expert) 01 December 2021
Very well explained and advised by expert Mr. P Venu, I agree and appreciate.
You should file a police complaint for cheating and fraud committed by the person withdrew the amount.
Sri Vijayan.A (Expert) 03 December 2021
Answered well
No need to add anything further

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