Page 262 - VIRANSH COACHING CLASSES

Parties to a Promissory Note :
1. Maker or Drawer : He is person who draws the promissory note. He is the one who promises
to pay a certain amount as specified in the promissory note. He is also called the promiser.

2. Drawee or Payee : He is the person in whose favor the promissory note is drawn. He is also
called the promisee.

Additional Information
There are varieties of hundies used in our country like Shahjog hundi, Darshani hundi,
Muddati hundi, Nam-jog hundi, Dhani-jog-hundi, Jawabee Hundi etc.

Contents of format of Bill of Exchange :

1. Date : The date on which bill has been drawn must be written at the top right-hand corner below
the address of Drawer. Date of bill is essential for calculation of maturity date. A bill without
date has no meaning.
2. Term : Term of bill must be specified in months or in days.

3. Amount : Amount of bill in figures should be specified below the stamp and amount in words
must be specified in the body of the bill.

4. Stamp : Stamp of proper value according to Indian Stamp ACT, 1889 should be affixed.
5. Parties : Name of the Drawer, Drawee and Payee and their addresses must be mentioned in the
bill of exchange.

6. ‘For value received’ : Law does not consider agreements that are made without consideration.
Consideration means in lieu of, and in context of bill of exchange, it means that the bill is issued
in exchange of some benefit received.
7. Acceptance : A bill of exchange drawn by Drawer is termed as draft. It must be presented to the
Drawee of acceptance. When Drawee signs with his name along with date across the face of the
bill, with the words “Accepted”, the bill is said to be accepted and this act of Drawee is called
acceptance of bill. Drawee cannot be made liable for payment of bill before the acceptance of
bill. Only on acceptance the draft becomes a bill of exchange.

Additional Information
The Indian stamp Act of 1899 of the Government of India is in force for the charging
stamp Duty on instruments recording transactions.

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