1
Question
Q. Consider the following statements regarding financial instruments called ‘Hundis’:
Which of the statements given above is/are correct?
Q. Consider the following statements regarding financial instruments called ‘Hundis’:
Which of the statements given above is/are correct?
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Solution
The correct option is C Both 1 and 2
Explanation:
Both the statements are correct: Technically, a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. Hundis, being a part of the informal system, have no legal status and are not covered under the Negotiable Instruments Act, 1881. Though normally regarded as bills of exchange, they were more often used as equivalents of cheques issued by indigenous bankers.
Explanation:
Both the statements are correct: Technically, a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. Hundis, being a part of the informal system, have no legal status and are not covered under the Negotiable Instruments Act, 1881. Though normally regarded as bills of exchange, they were more often used as equivalents of cheques issued by indigenous bankers.
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