Report No. 11
7. Suggestions that hundis and other negotiable instruments should be included.-
But an instrument for securing payment of money may become negotiable not only by statute but also by custom or usage of the mercantile community. The principal advantages of a negotiable instrument under the Act are that the property in the instrument and all rights under it pass, by operation of law, to a bona fide transferee for value by mere delivery or by endorsement and delivery, without the necessity of the complicated procedure of executing a deed of assignment and that the rights of the transferee are not in any manner affected by any defect in the title of the transferor. It has been urged before us that the foregoing and other statutory benefits conferred by the Act should be extended to two other classes of instruments viz., (1) indigenous instruments known as hundis and (2) instruments other than promissory notes, bills of exchange and cheques which are, for the time being, recognised by usage or custom as negotiable. Since this suggestion was made persistently by important commercial bodies, it has to be discussed at the outset in order to clear the ground.
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