Legal Question in Banking Law in Pakistan

Mr. A is a bank officer and he took loan of Rs.400,000/- from his friend Mr. B. After passage of some months Mr. B demanded his money from Mr. A but he was not having money to return to his friend so he committed a bank fraud by utilizing/debiting funds from some accounts of his branch by passing flying entries and against those funds issued a Pay order for Rs.400,000/- favoring Mr. B and handover him to clear his loan. Mr. B deposited that Pay order in his bank account and so received back his money from Mr. A (who after committing fraud is absconding now). Mr. A's bank approached Mr. B's bank branch through letter and asking to return money as it had been embezzled by Mr. A (their employee now absconding). Now the situation is that Mr. B is having credit balance of Rs.700,000/- in his account and Mr. A's bank is demanding funds of Rs.400,000/-. Please advise whether in the stated scenario Mr. B's bank can debit his account and return back the money to Mr. A's bank.

Asked on 11/15/12, 10:16 am

Adnan Bashir A B Choudry Law Firm

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i do not think so, you should get a say order restrainign your bank not to transfer the amount in A's bank...

Answered on 11/15/12, 5:35 pm

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