The Hundi which is payable to the holder or bearer is called
Answers
INTRODUCTION
The concept of Bills of Exchange is not something which is new and was unknown earlier. It is the modern form by which we know a bill of exchange. In the vernacular language a bill of exchange is called a Hundi. These are negotiable instruments which are written in the oriental language.
The Negotiable Instruments Act, 1881 (hereinafter referred to as the Act) does not define Hundis and does not include provisions for governing them.
Kinds of Hundis
Following are two types of Hundis:
Darshni Hundi
These types of Hundis are paid on sight. They can be transferred by endorsement and they pass amongst the indigenous bankers freely. These are negotiable and their price depends upon the demand and supply. It may be sold at a higher rate or at a discount.
These are the most common type of hundis and they become payable on demand. Once they are received by the holder they must be presented for collecting the money within a reasonable time.
Muddati or Miadi hundi
Such types of Hundis are payable after a specific period of time. Loans are advanced by the shroffs on the basis of these Hundis. The interest is deducted in advance by the shroffs for the period upto the due date. The Hundi includes the amount advanced and the rate of interest as part of an agreement in the Hundi.
Shah Jog Hundi
Shah denotes a respectable person. Such a Hundi is payable only to a Shah. The hundi requires no endorsement and can be transferred freely from one person to another by mere delivery. The person upon whom the hundi is drawn must make sure that he makes the payment only to a Shah on a Shah jog hundi.
If the payment is made to any other person than a Shah then the person will not be entitled to recover the money paid to the holder of the hundi from the person who has drawn the hundi.
A hundi which is a Shah Jog Hundi is paid on the responsibility of the Shah. A Shah Jog Hundi passes from many hands and no endorsement is required. Once it reaches a Shah, the Shah makes necessary inquires for securing himself and he then presents it to the maker of the Hundi for payment or acceptance.
Nam Jog Hundi
This is a hundi which is payable to the person whose name is specified in the hundi. It is like a bill of exchange and can be negotiated like that. It is just like a Shah Jog Hundi in nature; the only difference is that in a Nam Jog Hundi the name of the person is written who has to be paid than the word Shah.
If a Nam Jog Hundi is altered to turn it into a Shah Jog Hundi then the hundi becomes invalid and it can be payable to the order of the payee.
Dhani Jog Hundi or Dekhandar Hundi
The term Dhani translates into ‘holder’. It is a type of hundi which is payable to the person holding the Hundi or the bearer. It can be negotiated by delivery and it is just like a instrument which is payable to the bearer.
Firman Jog Hundi
A firman means an order. As the name suggests that a firman hundi is one which is payable to order. It can also be negotiated like instruments payable to orde. It is also payable on delivery and can be endorsed.
Jawabee Hundi
A Jawabee Hundi is used for transferring money from one place to another. The person who receives the money has to send a jawab to the remitter that he has received the money.
Jokhami Hundi
Jokhami means Risky. Such a type of hundi is drawn on goods which are shipped on vessels mentioned in the hundi. It implies a condition that the money will be paid by the person who is buying the goods only when the goods reach safely. The goods are the ones for which the hundi has been drawn.
Such type of Hundi can be said to be a culmination of a bill of exchange and an insurance policy. It appears that there is a twin purpose for such a type of hundi. Firstly to put funds in the hands of the drawer and secondly to make an insurance upon the goods for which the hundi is made.
Illustratio: A sells apples to B for Rs 500/-. A draws a Jokhami hundi by which he asks B to pay the amount to the holder of the hundi. B accepts this on a condition that the amount will be paid only when the goods are delivered to B. A discounts of the hundi with a third person who acts like an insurer.
This third person who is the insurer pays the amount of the Hundi after making deductions based upon the risk involved in the carriage of goods from A to B and the interest. If the goods reach the buyer i.e., B safely the insurer gets the amount however, if they don’t then the insurer has to bear he loss.
A Jokhami hundi places the maker of the Hundi in funds since he gets the price for the products sold with less charges of insurance immediately. At the same time the person who purchased the goods becomes insured and pays only on safe delivery of the goods.
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