Hundis
By Asok
Nadhani
7.1
Hundis
i. Negotiable
Instrument Act specifies only 3 kinds of documents (i.e, promissory note, bills
of exchange and cheque - sec. 13).
ii. Hundis
are indigenous negotiable instruments like bills of exchange or promissory
notes in form and substance, written in vernacular language.
iii. Thus
acceptance of a hundi as per local usages and customs, though not recognised by
the Negotiable Instruments Act, is regarded as valid in the Law Courts. In case
of dishonour of a hundi, notice may not be given if there is a local custom to
that effect.
7.2
Kinds of hundis
There
are two main kinds of hundis :
1. Darshni
hundi, i.e., a hundi payable at sight.
2.
Muddati hundi or Miadi hundi, i.e., a
hundi payable after a specific period.
7.3 Types of Hundis
Hundies
may also be classified as follows:
·
Shah jog hundi
·
Nam
·
Dhani jog hundi
·
Firman jog hundi
·
Jawabee hundi
·
Jokhami hundi
7.3.1. Shah jog hundi
It
is payable to shah (i. e, a respectable person).The payment can be made only if
a Shah presents the hundi to the drawee. It can be freely transferred from one
person td another by mere delivery and no indorsement is required.
7.3.2. Nam
It
is payable to a specified person named in the hundi or to his order. Thus it is
quite similar to a bill of exchange payable to order.
7.3.3. Dhani jog hundi or dekhandar hundi
It
is payable to the holder or bearer. Thus it is quite similar to bills of
exchange payable to bearer.
7.3.4. Firman jog hundi
It
is payable to order. It can be negotiated by indorsement and delivery.
7.3.5. Jawabee hundi
It
is used for remitting money from one place to another. The payee, on getting
the money has to send an answer to the remitter.
7.3.6. Jokhami hundi
A
jokhami hundi is payable to buyer of goods with conditions stipulated. It like
a combination of Bill of Exchange and Insurance policy. Ex.7.1
7.4
General terms
7.4.1
Zickri chit
It
is a letter of introduction given by the drawer or some prior party to the
holder of the hundi, addressed to some respectable person residing in the area
where the hundi is payable, requesting him to pay the amount of the hundi in
case the drawee refuses to accept or pay the amount of the hundi In such a case the person addressed in the
letter accepts the hundi and pays it at maturity. Thus he is like an acceptor
for honour.
7.4.2
Khoka
When
a hundi is paid up and cancelled, it is called a khoka.
7.4.3
Peth
The
duplicate of a hundi when the original is lost, is called peth. The duplicate
of a duplicate is called perpeth.
Ex: 7 Examples
Jokhami Hundi
Ex.7.1 A sells goods
worth Rs.2,500 to B and draws a jokhami hundi on B asking B to pay the amount to the holder of
the hundi. B accepts the hundi on condition that the payment will be made only
on the receipt of the goods. A discounts the hundi with C, an insurer. C pays
the amount of hundi (after deducting his insurance premium) charges for risk
involved in the carriage of goods from the seller to the buyer and interest. If
the goods reach B, the buyer, safely, then C becomes entitled to claim the
amount. If goods are lost in transit, the loss falls on the insurer(C). [Ref. 7.3.6]
For more details, refer
to Business & Corporate Laws by Asok Nadhani, BPB Publications, www.bpbonline.com,
bpbpublications@gmail.com
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