Question

Which one of the following is a promissory note when A signs the instrument?

• A. I promise to pay B or order Rs. 10,000/- on demand
• B. Mr. B! I.Owe.You. Rs. 10,000/-
• C. I promise to pay B Rs. 10,000/- and such other sums which shall be due to him
• D. I promise to pay B on his request Rs. 10,000/- on the death of X

Hint:

For promissory note questions, always check two key things first: 1. Is there an express "promise to pay" (not just an acknowledgment of debt)? 2. Is the amount to be paid a "certain sum" of money? These two points eliminate most incorrect options.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question requires identifying a valid promissory note from the given options. A promissory note, as defined under Section 4 of the Negotiable Instruments Act, 1881, has certain essential characteristics.
Step 2: Detailed Explanation:
The essentials of a valid promissory note are: 1. It must be in writing. 2. It must contain an express and unconditional undertaking (promise) to pay. 3. It must be signed by the maker. 4. The sum payable must be a certain sum of money. 5. The payee must be certain. Let's analyze the options based on these essentials:
- (A) I promise to pay B or order Rs. 10,000/- on demand: This meets all the criteria. It has an express promise ("I promise to pay"), the sum is certain (Rs. 10,000), the payee is certain ("B or order"), and the promise is unconditional ("on demand" is a valid term).
- (B) Mr. B! I.Owe.You. Rs. 10,000/-: This is a mere acknowledgement of a debt (an I.O.U.). It does not contain an express promise to pay, which is a mandatory requirement.
- (C) I promise to pay B Rs. 10,000/- and such other sums which shall be due to him: The amount payable is not certain because of the phrase "and such other sums which shall be due". This makes it an invalid promissory note.
- (D) I promise to pay B on his request Rs. 10,000/- on the death of X: An instrument payable on the occurrence of an event that is certain to happen (like death) is not considered conditional. However, option (A) is a clearer, more standard, and unambiguously valid promissory note. The phrase "on his request" is similar to "on demand", but the overall structure of option (A) is the textbook example of a perfect promissory note.
Step 3: Final Answer:
Option (A) perfectly satisfies all the legal requirements of a promissory note under the Negotiable Instruments Act. Therefore, it is the correct answer.