What is Promissory Note? Promissory Note is defined under Section 4 of Negotiable Instruments Act 1881
A "promissory note" is an instrument in writing
(not being a bank-note or a currency-note)
containing an unconditional undertaking signed by
the maker, 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 signs instruments in the following terms:
(a) "I promise to Pay B or order Rs.500".
(b) "I acknowledge myself to be indebted to B in Rs.1,000, to be paid on demand, for value received."
(c) "Mr B I.O.U Rs.1,000."
(d) "I promise to pay B Rs. 500 and all other sums which shall be due to him."
(e) "I promise to pay B Rs. 500 first deducting there out any money which he may owe me."
(f) I promise to pay B Rs. 500 seven days after my marriage with C.
(g) I promise to pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum.
(h) I promise to pay B Rs. 500 and to deliver to him my black horse on lst January next.
The instruments respectively marked (a) and (b) are promissory notes. The instruments respectively marked (c), (d), (e), (f), (g) and (h) are not promissory notes.
CHAPTER II NOTES, BILLS AND CHEQUES