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2011-04-23 03:04:40

GKToday

There are 3 parties in the bill of Exchange . 3 parties in the bill of Exchange.

BEO is a written negotiable Instrument which contains an unconditional order which is

1. Signed by the Maker

2. Directs a certain person to pay

3. Certain sum of Money only to

4. Certain person or the bearer.

The parties are Drawer, Drawee and Payee.

Drawer: The person who orders to pay The person who orders to pay

Drawee: The person who is directed to pay The person who is directed to pay

Payee: The person who is authorized to obtain a payment The person who is authorized to obtain a payment

Please note that A minor can be a Drawer but not a Drawee because he can not incur liability.

Once the Drawee accepts the BOE, he becomes acceptor.

Inland Bill & Foreign Bill

A bill that is drawn in India and paid in India or out of India to a person, who is in India, whether Indian or Foreigner, is Inland Bill. Simply,

a bill drawn in India and paid in India is a Inland Bill.

A bill which is NOT drawn in India but is payable in India to a person, who is in India and is Indian or a foreigner is a Foreign Bill.

Hundi:

Hundi is the Desi version of a bill of Exchange.and is Indian or a foreigner is a Foreign Bill. Hundi: They are used conventionally, not

They are used conventionally, not stamped and a vernacular language is written on them. They are still in use and are governed by local practices only.

Darshani Hundi is akin to a Demand Promissory Note is akin to a Demand Promissory Note

Miadi Hundi is akin to a Usance Promissory Note is akin to a Usance Promissory Note

Khoka is also a Hundi which refers to a bill of exchange that has been paid is also a Hundi which refers to a bill of exchange that has been paid and canceled.

BOE , as per the NI act are charged at the rate of 18% per annum interest.