Hundi: Hundi is also a very popular credit instrument among the Indian businessmen from times immemorial. Even in today’s world, Hundi is used by most of the Indian businessmen. Hundreds were in (UPBoardSolutions.com) circulation even when the banks did not exist. Hundies are of different nature from Bills of Exchange. Since Hundies are private credit instruments, the Government has no control over them. Hundi may be written in any of the regional languages of India. Hundies are written for a fixed period or are payable on demand.
Promissory Note: There is another method by which the promise made by the purchaser to pay for goods bought by him can be made which is definite and absolutely binding upon him. Such a promise is signed by the debtor and is handed over to the creditor, is called a ‘Promissory Note’.
A Promissory Note is legally defined as, “an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum of certain money to or to the order of a specified person.”
There are only two parties of Promissory Note. The person who has written the Promissory Note and signs it, is known as the ‘maker’. In the given specimen S.K. & Co. is the maker. The person who receives the payment is known as ‘Payee’. In the given specimen, R. S. & Sons are the payees.
