Overview
When a forged or altered cheque clears from your account, settled law is firmly with the customer: a bank that pays on a forged signature pays out of its own funds, not yours — a forged instrument is a nullity, and the bank's core duty is to know its customer's signature. Materially altered cheques (amounts inflated, payees changed) follow the same logic. The fight is procedural: prompt written repudiation, the forensic signature comparison, FIR for the forgery, and the recovery claim against the bank — alongside prosecution of whoever stole or forged the leaves, often someone with access to the account holder's papers.
Key Provisions — NI Act + BNS, 1881 / 2023
- Payment on a forged drawer's signature gives the bank no mandate — the debit is reversible as the loss is the bank's (settled Supreme Court law).
- Material alteration (NI Act Section 87) voids the instrument; banks must detect visible alterations.
- BNS 336/338 — forgery of a valuable security is a serious offence; the FIR anchors both prosecution and the civil claim.
- Customer negligence (signed blank leaves, unreported lost cheque books) is the bank's main defence — how you handled leaves matters.
What You Can Get
How We Handle It
Repudiate in Writing
Immediate written denial of the signature/alteration to the bank — the clock and record start here.
FIR & Forensics
Forgery FIR; handwriting-expert comparison of the disputed signature.
Claim Against the Bank
Restoration demand citing the settled law; Ombudsman/consumer forum on refusal.
Recovery & Prosecution
Account restored with interest; the forger prosecuted.
Frequently Asked Questions
The bank says the signature 'matched reasonably' so they won't reverse — do they win?
No. If the signature is in fact forged, 'reasonable resemblance' doesn't save the bank — a forged instrument confers no mandate at all. The forensic report is what settles it.
My own employee forged my cheques for months — can I still claim from the bank?
Yes, though the bank will argue your negligence and delayed detection. Recovery often ends up shared; the employee faces prosecution regardless. Report the moment you discover it.
Legal Connect connects you with independent advocates; we are not a law firm and this page is general information, not legal advice. In active fraud situations, report to your bank and 1930 immediately — then call us on +91 22 6555 3444.