For sometimes past the question of issue of duplicate cheques/ demand Draft's in lieu of the one's reported lost in transit and the avoidance of serious inconvenience to payee has been engaging our attention. After careful deliberations on the subject a more practical procedure has been evolved as follows :-
1. All cheques should in future only for "Accounts Payee" and not merely crossed and marked "not negotiable' as the latter forms of endorsement does not prevent negotiation by the Payee.
2. Open cheques/Demand Draft are to be issued at the special request of the payee and at his own risk and at the personal discretion of the Accounts Officer. In the event of such a cheque being lost in transit, as a rule, no duplicate cheque or Demand draft would be issued in lieu. Only in very rare cases, where hardship is established, we may do so at the personal discretion of the Director-General, Scientific & Industrial Research or the Secretary, Council of Scientific & Industrial Research
3. Duplicate Demand Drafts or cheques may be issued in cases of losses of Account payee Demand Drafts and cheques at the personal discretion of the Accounts Officer after having a non-payment certificate in case of Demand Drafts from the Bank after having a caution noted by the Bank in case of cheques (in short a stop payment Certificate from Bank). Accounts Officer will take special precautions to see that Prima-facie the case is genuine and the payee is credit worthy. Accounts/Administrative Officers are authorised to give an indemnity to the bank on the basis of the indemnity received from the Payees in the sample form enclosed for the purpose. While this involves a calculated risk it appears that under the Negotiable Instruments Act notwithstanding the indemnity Bond the Bank will not be able to escape its liability in case of duplicate payments. Such a contingency if it arises will be faced in a civil suit.
A copy of this circular may be appended by your copy of the Cash and Accounts Manual for future reference.
(CSIR letter No. 5(13)/66-Cash, dated, 14th Dec, 1967)
LETTER OF INDEMNITY GIVEN TO DRAWER OF LOST CHEQUE/DEMAND DRAFT ON
DRAWING A SECOND CHEQUE.
Council of Scientific & Industrial Research
In consideration of the Council of Scientific & Industrial Research (hereinafter referred to as 'Council') having this day given as a second cheques/Demand draft for Rupees (in words) ______________________________________________________________________________________________________________________________________________________________________
in replacement of a previous cheque No./Demand Draft No.______________ dated _____________ drawn by the Council in my favour, I hereby undertake to refund to the said Council the sum of Rs._____________(Rupees. ) in the event of the earlier
cheque/demand draft being presented and paid by the Council's Bankers to me or to my credit and to Identify the Council against all expenses which may be incurred by the Council in relation thereto.
Dated __________________this____________Day of ____________________1967.