According to section 4 of Negotiable
instrument Act 1881, A promissory note is an instrument in writing ( not being a bank note or
currency note) containing an unconditional undertaking, signed by maker to pay
a certain sum of money only to or to the order of a certain person or to the
bearer of the instruments. Under section
31(2) of the reserve bank of India Act a promissory note cannot be made payable
following feature or characteristics :-
It must be in writing and unconditional promise to pay.
Mere acknowledgement of debt is
not promissory note.
The person who makes promise(promisor) to pay must sign the
The payee must be certain person.
Amount payable on promissory note must be certain Amount. It must not
contain contingent additions or subtractions for example, promise to pay
Rs.10,000/- including all fines and penal interest is not certain.
payment must be in legal currency of the country.
It should not be made payable
It should be properly stamped.
· When we talk about Bill of
Exchange it includes Promissory Notes also.
Demo Classes of Accounts (CA/CMA/CS/B.Com/11-12th) by CA/CMA Santosh Kumar Sir
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