Definition
A written unconditional promise by one person (the maker) to pay a certain sum of money to another person (the payee) at a specified future date or on demand. Promissory notes are "negotiable instruments" under the Negotiable Instruments Act, 1881. Banks often require promissory notes for short-term credit facilities. Dishonour of a promissory note is actionable under civil law and under Section 25 of the NI Act.
Related Terms
Negotiable InstrumentNI ActDemand Draft
Need Expert Advice on Promissory Note?
For specific advice on how Promissory Note applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates