Hundis

Definition. Instruments drawn by Indians in an oriental language Bills of exchange in vernacular language

The negotiable instruments act does not deal with hundis but where it has been expressly mentioned in the hundi that the legal relations of the parties thereto shall be governed by the negotiable instruments act, the act will apply Kinds of Hundis Shah Jog Hundi- hundi payable only to shah, ie a respectable person or a person of worth in the market Most widely used hundi in the country It may pass from hand to hand unless it reaches a shah who after making due enquiries to secure himself presents it to the drawee for acceptance or payment, then its negotiability ceases It will not be paid unless the name of the shah by whom it is presented in endorsed on it Similar to a crossed cheque

Jokhmi Hundi

A hundi drawn against goods shipped on the vessel named in the hundi Drawer of the hundi is the consigner who draws for the value of goods on the consignee The drawer negotiates the hundi to a broker and the broker charges a commission for his services The broker will get the money if the vessel arrives safe in the port If the ship is lost, the broker bears loss Thus, both the drawer and the drawee are protected

Nam jog hundi

Hundi payable to a named party or his order Similar to a shah jog hundi except for that the word shah, the name of the person is mentioned

Generally, it contains the description of the person mentioned, when this is so it is not transferable Alteration of a nam jog hundi into a shah hundi is a material alteration and renders the hundi void Dhani jog hundi- Payable to dhani or owner ie the person who purchases it Payable to any owner, holder or bearer

Jawabi hundi- hundi employed to send money to distant places and resembles a money order The drawer who is interested in sending the money writes to the payee and delivers the latter along with remittance to a banker On payment, the payee signs the receipt on the letter which is then returned to the remitter in the same way

Firman Jog Hundi- hundi which is payable to order It can be negotiated like instruments payable to order by endorsement and delivery

Some general terms Zickri Chit- a hundi may be accepted for honor under a letter of protection (called Zickri Chit ) without being noted or protested Khoka- when a hundi is paid up and cancelled Peth- it is a duplicate form of hundi issued in case the hindi is lost. If the duplicate is also lost, another is issued which is also called parpeth