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CS Executive · Jurisprudence, Interpretation and General Laws · Law relating to Negotiable Instruments

Ravi signs and delivers to Meena a writing stating: "I acknowledge myself to be indebted to Meena in Rs. 1,000, to be paid on demand, for value received." Under the Negotiable Instruments Act, 1881, this writing is:

The writing is a promissory note. It is signed by the maker, unconditionally undertakes payment of a certain sum to a certain person on demand, and the Act's illustration expressly treats such an acknowledgment of debt as a promissory note despite not using the word 'promise'.

  1. AA promissory note, because it contains an unconditional undertaking to pay a certain sum to a certain personCorrect
  2. BNot a promissory note, because it uses the word 'indebted' instead of 'promise'
  3. CNot a promissory note, because no date of payment is fixed
  4. DA bill of exchange, because it is payable on demand

Explanation

Under Section 4, illustration (b) expressly treats an acknowledgment of indebtedness payable on demand for value received as a promissory note. It is a written, signed, unconditional undertaking to pay a certain sum to a certain person. The absence of a fixed date does not matter, since an instrument with no time specified is payable on demand.

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