Hundi

 Hundi derived from `Sanskrit’ word `hund’

 Means `to collect’.

 Thus, `hundi’ written in vernacular language is an

instrument used to collect the money stated in it.
HUNDIS

 Drawn in any local

language in accordance
with the custom of the
place
 For transfer of money
without its actual
physical movement
Classification of Hundies
 Darshani Hundi: The word `darshan’ means at sight.
A hundi payable at sight or on darshan or on demand
is known as darshani hundi.

 Muddati or Miadi Hundi: Muddat or miad means a

specific time period. A hundi payable after a specified
time period is known as muddati or miadi hundi
 Kinds of Hundies
 Shah Jog Hundi: When hundi payable only to a shah i.e.
the person of repute is called shah jog hundi.

 Nam Jog Hundi: When hundi is payable to the person

named in it or to his order is called nam hog hundi.

 Dekhandar or Dhani Jog Hundi: Dhani means the owner

or holder who purchases a hundi. Thus, a dhani jog hundi
is one payable to its owner or to the person who becomes
holder or bearer by purchasing it.
Contd…..
 Firman Jog Hundi: A hundi payable to order is a
firman jog hundi. It can be negotiated by endorsement
and delivery.

 Insan Jog Hundi: An Insan Jog hundi is one which is

paid only to the person who presents it.
Contd…….
 Jawabee Hundi: Jawabi hundi is in the form of a letter
from the person who desires to remit money from one
place to another. In this letter i.e. hundi the drawer advises
the payee to collect money from a banker and send an
answer. On receipt of the money, the payee sends his
receipt in the form of an answer to the remitter of the
money.

 Jokhami Hundi: A jokhami hundi is drawn by the seller of

the goods on the buyer. It is a conditional hundi which is
payable by the drawee on the safe arrival of the goods
against which the hundi is drawn. The drawee is not
required to pay the hundi unless the goods reach their
destination safely.
Certain Important Terms
 Khoka- A paid up and cancelled hundi

 Peth – hundi issued when the original hundi is lost

 Perpeth – Triplicate Copy of Hundi issued in case of loss

of peth

 Zickri Chit – letter of protection given to the holder of a

hundi by some prior party to the hundi
Maturity of Negotiable Instrument
 Acc to section 22 rules regarding maturity are as follow:

 Payable on Demand

 Payable on Order

 Payable on Demand falls due for payment immediately

after its issue.

 Payment of cheque is due on or after its date mentioned on

its face but upto its validity period (Six Month)
Contd…..
 A promissory note or bills of exchange are payable
after sight or on specified day or on the happening of
an event which is certain to happen.

 Bill of Exchange – Date of bill + Period of Bill +3 Days

(Grace Days)
Payment in due Course
 Means payment is made as required in the act
 The payment should be made in accordance with the
apparent tenor of the instrument
 Payment must be made in money only
 The person to whom payment is made should also be
entitled to receive payment
 The payment should be made in good faith, without
negligence and under bonafide circumstances
Crossing of Cheque
 Drawer give direction to the paying banker through
certain words marked on cheque itself, which
constitute ‘ crossing’.

 Thus crossing is an instruction given to the paying

banker to pay the amount of the cheque through a
banker only and not directly to the person presenting
it at the counter. A cheque bearing such an instruction
is called Crossed Cheque.
Contd……
 Thus a crossed cheque is one on which two parallel
transverse lines with or without any word is drawn.

 The payment of such a cheque can be obtained only

through the banker

 It is considered as safe cheque

Types of Crossing
 General Crossing

 Special Crossing

 Non – Negotiable Crossing

 Restrictive Crossing
1.) General crossing
According to Section123,” where a cheque bears across its
face an addition of the words “and company” or any
abbreviation thereof, between two parallel transverse
lines, or of two parallel transverse lines simply , either
with or without the words “not negotiable” , that
addition shall be deemed a crossing , and the cheque
shall be deemed to be crossed generally.
2.) SPECIAL CROSSING
 Under section 124 of the Act, where a cheque bears
across its face an addition of the name of a banker,
either with or without the words “not negotiable”, that
addition shall be deemed to be crossed specially.
SPECIAL OR RESTRICTIVE CROSSING
GENERAL CROSSING
3.) NON- NEGOTIABLE CROSSING

The words 'Not Negotiable' can

be added to General as well as
Special crossing and a crossing
with these words is known as
Not Negotiable crossing.
4.) RESTRICTIVE CROSSING
 This crossing can be made in both general and special
crossing by adding the words Account Payee.
 In this type of crossing the collecting banker is
supposed to credit the amount of the cheque to the
account of the payee only.
SIMILARITIES BETWEEN BILL OF EXCHANGE
AND CHEQUE

 Both are the bills of exchange.

 Both have three parties namely, the drawer, drawee
and the payee.
 The drawer and the payee in both the cases may be one
and the same person.
 Both are unconditional order to pay a certain sum of
money.
 Both can be endorsed.