The applicant sought declarations relating to a $2 million bank draft that had been lost after issuance.
It requested that the draft be declared void and that the issuing bank return the funds without requiring an indemnity.
The respondent bank argued that the draft created ongoing risk because it remained a negotiable instrument and could potentially be presented through fraud, mistake, or negligence.
The court held that the transaction should remain risk‑free to the issuing bank and that commercial certainty favours requiring indemnity and security before issuing a replacement instrument.
The application was dismissed, with the bank remaining willing to issue a duplicate draft upon provision of adequate indemnity and security under the Bills of Exchange Act.
