A “bill of exchange” is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on, the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be “certain”, within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be a “certain I person”, within the meaning of this section and section 4, although he is mis-named or designated by description only.
Legal Commentary & Landmark Judgments: Section 5
Section 5 defines a 'bill of exchange' as an unconditional order in writing, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
Bills of exchange (including trade acceptances and hundis) are powerful instruments for commercial supply chains. Under Order XXXVII Rule 1(2) of the CPC, summary suits can be instituted immediately upon dishonour of an accepted bill of exchange without proving the underlying sale contract.