Question

Mr. Amit signs on instrument in the following terms.
(i) "I promise to pay B or order Rs. 500"
(ii) "I promise to pay B Rs. 500, first deducting all other sums which shall be due to him"
(iii) "I promise to pay B Rs. 500 on D's death, provided D leaves one enough to pay that sum"
Which of the following are promissory notes?

• A. Only (i)
• B. Both (i) and (ii)
• C. Both (ii) and (iii)
• D. All of the above.

Answer 1

Answer: (A)

Only (i)

According to section 4 of the Negotiable instruments Act, 1881, promissory note means an instrument in writing 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. Here the person has undertaken to pay Amit without any condition or order Rs 1,500 and hence fulfill all the elements of promissory note as per the act.