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Promissory Note

 

Team LawDocs

A promissory note is an instrument in writing which is not of the nature of a bank note or a currency note. The promissory note contains an unconditional undertaking sign by the maker to pay a certain sum of money which is restrict only to the bearer of the said note. The provisions governing the issuance of promissory note are laid down in the Negotiable Instruments Act, more particularly under the Section 4 of the Act.

A promissory note may be of various categories. However, it is not necessary that all these categories shall categorize as negotiable instruments. It depends on the clauses and terms and conditions laid down under the note itself. However, by the very fact it may be relevant to note that the same does not change. And tamper with the nature of the document. A promissory note may issued by a single person. Or may be jointly issue by multiple issuers in favour of bearer/s.

In a recent campaign in view of the recent coronavirus outbreak. The Union finance ministry has proposed to decriminalize in as may 36 section across 19 legislations. Including the Negotiable Instruments Act, 1881. The said step would aim to substitute the criminal liability with compoundable monetary penalties of a civil nature. This would also mean that the proposal would recategorize. These offences from criminal into civil nature and there would no longer be a punishment in the form of imprisonment. The central government has also sought suggestions and opinions from general public on the same.

Apart from the Negotiable Instruments Act, other legislations that include the list are Insurance Act, 1936. SARFAESI, Reserve Bank of India Act, 1934, Payment and Settlement Systems Act, 1934 etc.

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