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Types of Hundi – Shah Jog, Jokhmi, Jawabee, Nam jog, Darshani

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Types of Hundi, When we sit to study the Negotiable Instruments Act, we need to understand what is a hundi and the various types of hundi. In Layman’s language, the term “hundi” includes all negotiable instruments whether they are bills of exchange or promissory notes. An instrument in order to be a hundi must be capable of being sued by the holder in his own name, and it can be transferred like cash that is, by delivery. Now you can Scroll down below n check more details regarding “Types of Hundi”

Types of Hundi:

Types of Hundi

The following types of hundis are worth mentioning:

1. Shah Jog Hundi:

“Shah” means a respectable and responsible person or a man of worth in the bazar. Shah Jog Hundi means a hundi which is payable only to a respectable holder, as opposed to a hundi payable to bearer. In other words, the drawee before paying the same has to satisfy himself that the payee is a ‘SHAH’.

2. Jokhmi Hundi:

A “jokhmi” hundi is always drawn on or against goods shipped on the vessel mentioned in the hundi. It implies a condition that money will be paid only in the event of arrival of the goods against which the hundi is drawn. It is in the nature of policy of insurance. The difference, however, is that the money is paid before hand and is to be recovered if the ship arrives safely.

3. Jawabee Hundi:

According to Macpherson, “A person desirous of making a remittance writes to the payee and delivers the letter to a banker, who either endorses it on to any of his correspondents near the payee’s place of residence, or negotiates its transfer. On the arrival, the letter is forwarded to the payee, who attends and gives his receipt in the form of an answer to the letter which is forwarded by the same channel of the drawer or the order.” Therefore, this is a form of hundi which is used for remitting money from one place to another.

4. Nam jog Hundi:

It is a hundi payable to the party named in the bill or his order. The name of the payee is specifically inserted in the hundi. It can also be negotiated like a bill of exchange. Its alteration into a Shah Jog hundi is a material alteration and that renders it void.

5. Darshani Hundi:

This is a hundi payable at sight. It is freely negotiable and the price is regulated by demand and supply. They are payable on demand and must be presented for payment within a reasonable time after they are received by the holder.

6. Miadi Hundi:

This is otherwise called muddati hundi, that is, a hundi payable after a specified period of time. Usually money is advanced against these hundis by shroffs after deducting the advance for the period in advance. These were the best types of hundis. Now, there are additional types of hundis which are as follows:

7. Dhani Jog Hundi: A hundi which is payable to “dhani” ,that is, the owner.

8. Firman Jog Hundi: A hundi which is payable to order if it can be negotiated by endorsement and delivery.

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About CA Ridhi Dhoot

The writer is a Chartered Accountant & a Licentiate Company Secretary. You can reach out to her at [email protected]

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