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

Which of the following writings signed by Asha would qualify as a promissory note under Section 4 of the Negotiable Instruments Act, 1881?

The writing promising to pay Bala or order Rs. 500 is a promissory note, because it is an unconditional undertaking to pay a certain sum to a certain person or his order. The others are conditional, add delivery of a horse, or are a bare I O U with no promise to pay.

  1. A"I promise to pay Bala Rs. 500 seven days after my marriage with Chitra."
  2. B"I promise to pay Bala Rs. 500 and to deliver to him my black horse on 1st January next."
  3. C"I promise to pay Bala or order Rs. 500."Correct
  4. D"Mr. Bala, I O U Rs. 1,000."

Explanation

A promissory note needs an unconditional undertaking to pay a certain sum to a certain person or his order. 'I promise to pay B or order Rs. 500' meets this. The marriage-linked promise is conditional on an uncertain event, the horse promise adds a non-money obligation, and a bare I O U contains no undertaking to pay.

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