Demand Draft

Demand draft is discussed in section 85(A) of the NI Act. A Demand draft is an order to pay money drawn at one office of a Bank upon another office of the same bank for a sum of money payable to order on demand.

·         A Demand Draft is payable on demand

·         A Demand Draft can NOT be paid to a bearer

·         A DD is negotiable and its features are similar to Bill of Exchange and NOT a Check.

·         If a Bank fails to honor the Draft, the Bank is liable and not the person.

·         If there are wrong signatures on the Bank Draft, the Bank is liable.

·         If there is a prior arrangement , the DD can be payable by different bank also.