A signs this written instrument: “On demand, I promise to pay B the sum of ₹10,000.” Under the…
Section 4 NI Act defines a promissory note as a signed written unconditional undertaking to pay a certain sum of money only to, or to the order of, a certain person or to…
Choose your answer
A signs this written instrument: “On demand, I promise to pay B the sum of ₹10,000.” Under the Negotiable Instruments Act, 1881, what is it called?
Answer and explanation
Correct answer C
Section 4 NI Act defines a promissory note as a signed written unconditional undertaking to pay a certain sum of money only to, or to the order of, a certain person or to bearer. A’s signed promise to pay B ₹10,000 on demand meets the tested definition. A bill contains an order to another; a cheque is drawn on a specified banker and payable on demand.
Option feedback
Option A
A bill contains an order directing another person to pay, rather than the maker’s own promise.
Option B
Simple note is not the statutory classification of this unconditional payment promise.
Option C
The signed unconditional promise to pay a certain sum to B is a promissory note.
Option D
No specified banker is ordered to pay, so this is not a cheque.
Practice for these exams
-
All India Bar Examination (AIBE)
Subject revision
See pack details on LawMint.net -
UGC NET Law
Subject revision
See pack details on LawMint.net -
Chhattisgarh Judicial Services
-
CUET PG Law (LL.M.)
Subject revision