Promissory Notes

Section 4 of the Negotiable Instruments Act, 1881 kehta hai:
"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."

• Simple shabdon mein, Promissory Note ek aisa document hai jismein ek person (maker) dusre person (payee) se unconditional promise karta hai ki wo ek fixed amount, ek certain date par (ya on-demand) pay karega.

(B) Features of Promissory Note

Unconditional Undertaking

Note mein koi condition nahi hoti. Bas direct promise to pay hota hai.

Drawn & Signed by Maker

Maker (Promisor) khud apni handwriting mein, ya typed form mein note banata aur sign karta hai.

Name of Payee

Note clearly batata hai ki kisko (payee) payment milni hai.

Amount Payable

Ek definite sum hona chahiye, specify kiya hota hai (figures & words mein).

Stamp Duty

Legal compliance ke liye Promissory Note par required stamp duty pay ki jaati hai.

(C) Parties to a Promissory Note

Maker (Promisor)

Yeh wo person hai jo note banata hai aur promise karta hai amount pay karne ka.
Yeh debtor hota hai, jisko credit mila hai.

Payee

Yeh wo person hai jisko payment milna hai.
Yeh creditor hota hai, jisne credit diya hai.

(D) Example

New Delhi, 15th March, 2010

Rs. 20,000

Three months after date we promise to pay M/s. Tara Chand & Co. or order a sum of twenty thousand rupees with interest at twelve per cent per annum, value received.

[Stamp](Signed)

Raj & Paul

• Yahan, Raj & Paul makers/promisors hain.

• M/s. Tara Chand & Co. payee hai (jisko paisa milna hai).

Differences Between Bill of Exchange & Promissory Note

Point	Bill of Exchange	Promissory Note
Type of Instrument	Contains an order to pay	Contains a promise to pay
Number of Parties	Generally 3 parties: Drawer, Drawee, Payee	2 parties: Maker, Payee
Who Pays	Payment Drawee/Acceptor karta hai	Payment Maker khud karta hai
Who Draws	Creditor (Drawer)	Debtor (Maker)
Drawer & Payee Same Person?	Possible (Drawer can also be Payee)	Maker & Payee cannot be the same person
Liability	Drawer ki liability secondary & conditional (agar drawee fail ho jaye to)	Maker ki liability primary & absolute
Conditional Acceptance	Bill can be accepted conditionally	Note cannot be made conditionally
Notice of Dishonour	Zaroori hai; agar Bill dishonour ho jaye to notice dena hota hai	Promissory Note mein notice of dishonour ki zaroorat nahin hoti
Noting & Protest (if Dishonoured)	Mandatory for Bill of Exchange	Not required for Promissory Note

Key Parties in a Promissory Note

Party	Role
Maker	Wo person jo promissory note banata hai. - Wahi payment karega.
Payee	Jisko paisa milna hai.

Hinglish Wrap-Up

1. Trade Bill vs Accommodation Bill: Trade Bill actual sale-purchase (credit) ke liye hota hai, Accommodation Bill sirf mutual financial help ke liye banaya jata hai.

2. Promissory Note me maker khud promise karta hai amount pay karne ka, isiliye koi “acceptance” jaisa concept nahin hota.

3. Bills of Exchange me generally 3 parties involve hoti hain aur acceptance ki zaroorat hoti hai, jabki Promissory Note me 2 parties hoti hain aur acceptance ki zaroorat nahin.

4. Promissory Note me maker ki liability primary hoti hai, Bill of Exchange me drawer ki liability tab aati hai jab acceptor (drawee) dishonour kare.