HUNDIS
In a vernacular language a bill of exchange is called hundi.
These are negotiable instruments which are written in oriental language.
The negotiable instrument act, 1881 does not define hundi and does not provide provisions for governing them . hundis are governed by local usages and customs of trade.In the case of absence of any usages and customs, negotiable instrument is applied to hundis.
Types of Hundis
1) Shah Jog Hundi : This is a type of a hundi, which is made payable only to a Shah (a respectable person of financial worth and substance in the society). It may be muddati or darshani and can be transferred freely from one person to another by mere delivery but it is not payable to bearer.it can only be paid to shah. In some respects it is similar to a crossed cheque.
2) Darshani Hundi: On sight payable hundi is given by this. Once the receipt is given the payment has to be done in a fixed time. The demand bill is also like this . It may be sold at par or at premium or at discount.
3) Muddati Hundi: Also known as Miadi hundi, which is payable after a specified period of time. This is similar to a time bill.
4) Nam-Jog Hundi – The hundi can be paid to the person whose name is written in it . This cannot be issued to any other person and the endorsement is restricted.
5) Furman-Jog Hundi – The money can be given to the person whose name is written or the person whose name is recommended by him . In such no endorsement is required and the is like a cheque payable o order.
6) Dhani-Jog Hundi – Dhani jog hundi is the one in which the hundi is payable to the bearer or the holder .It can be considered as a instuent payable to a bearer.
7) Jokhim-Hundi – The normal hundi does not have any condition but the jokhim huundi has condition such that if certain conditions are satisfied only then the payment will be done. This type of hundis are not accepted by bank and so their prevalence is less and they are not negotiable.
8) Jawabi Hundi – The person who receives the money has to give an acknowledgment when money is given from one person to another and such type of hundi is considered as the jawabi hundi.
9) Nishan jog hundi: it is a type of hundi which is to be paid only to a person presenting it.
10) ZIKRI hundi: This is a type of which is accepted for honour in writing on a Zikri chit (letter of protection) without being protested. It is drawn in the name of a specified person residing in a town or a city where the hundi is payable. In case, acceptance is refused by the drawee or when a refusal is likely to occur, the hundi is furnished to the holder by some prior party to it.
11) Dekhanhar hundi : it is a type of hundi which is payable to the bearer or the person presenting it for payment.
12) Peth and perpeth : where the hundi is lost by the holder, he may be given a duplicate of the lost one .this duplicate hundi is called peth and where the duplicate of the original hundi is also lost, the the holder is given another duplicate which is called perpeth.
Hundis do useful service over the larger area of the country, especially in the small villages where the modern banking system has yet not been extended.The chambers of commerce made suggestion to law commission that hundis should be allowed to retain natural business according to usage and those usages should be codified by commission . But due varities of hundis in vogue it was not found possible by the law commission to evolve uniform rules applicable to hundis for the purpose of codification.