In case what you stated is a gospel truth, your relative has an option to lodge an FIR for fraud, forgery, using a forged documents as genuine within the jurisdiction his bank is situated. He need to annex the proofs to the fact that he had got his cheque book blocked as the same was lost. Did your relative lodge an NCR at the time his cheque book was lost? Do seek proper legal guidance before going ahead with criminal action and convince your lawyer first with the strength of your documents. This would also be a valid defence in the complaint filed against your relative under Negotiable Instruments Act.