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CSEET · Business Laws and Management · Elements of Law relating to Negotiable Instruments

A hundi in an oriental language is governed by a local usage. The parties wish the Act to govern their legal relations instead. Under the saving of usages, they can achieve this by:

They can exclude the local usage by including words in the body of the instrument showing an intention that the legal relations of the parties shall be governed by the Negotiable Instruments Act. The proviso to the extent provision allows this; stamping, registration or crossing does not.

  1. AUsing words in the body of the instrument indicating that their legal relations shall be governed by the ActCorrect
  2. BGetting the hundi stamped at a higher value
  3. CHaving the hundi registered with the Reserve Bank of India
  4. DHaving the hundi crossed generally

Explanation

The proviso says local usages may be excluded by words in the body of the instrument indicating an intention that the parties' legal relations be governed by the Act. Stamping, registration with the RBI or crossing is not the prescribed way.

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