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Section 5 of Negotiable Instruments Act, 1881
Section 5 of Negotiable Instruments Act, 1881 deals with 'Bill of exchange'.
From the Act
A "bill of exchange" is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
A promise or order to pay is not " conditional ", within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on ,the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be "certain", within the meaning of this section and section 4, although it includes future interest or is pay-able at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be a "certain I person", within the meaning of this section and section 4, although he is mis-named or designated by description only.
Recent Cases / Related Cases
- Bishwanath vs Govinda 23 CWN 534: A bill of exchange may include a Hundi but a hundi does not include a bill of exchange.
- Thaker Das vs Fateh Chand 7 BLR 275: A forged Hundi did not form the basis of title even under the Hindu Law.
- Rajooram vs Buddeo (1833) 1 Hyde 155: A hundi payable even to a specified person or to order was negotiable without endorsement of the payee.
- Panna Lal vs Hargovind, 51 IC 250: Even oral acceptance of hundi is acceptable.
- Surajmal vs Kashi Prasad (1933) Nag 89: In Bombay, there was a custom, whereunder, drawer making conditional payment of a hundi, which is dishonored and returned, is entitled to refund of the amount paid if the hundi is not presented again in four days.
- Lalla Mal vs Kesho Das, 26 All 493; Banshidhar vs Jwala Prasad, 16 Bom LR 434: There is no rule in Hindu Law which would have the effect of making a shah jog hundi transferable without an endorsement.