Prerequisites for Admissibility of a Promissory Note


stacked round gold-colored coins on white surface
stacked round gold-colored coins on white surface
Prerequisites for admissibility of a Promissory Note?

It may be noted that as per Section 4 of the Negotiable Instruments Act, 1881, a promissory note is required to contain four essential ingredients: (i) an unconditional undertaking to pay, (ii) the sum should be the sum of money and certain, (iii) the payment should be to or to the order of a person who is certain, or to the bearer, of the instrument, and (iv) the maker should sign it. If an instrument fulfils these four conditions, it will be called a promissory note, and the requirement of attestation of a document provided under Article 17(2)(a) of the Qanun-e-Shahdat,1984, does not apply to a promissory note. Two more things also need to be clarified here. First, if an instrument, notwithstanding the provisions of Section 4 of the Negotiable Instruments Act,1881, is attested by witnesses, the nature and character thereof shall not be affected. It shall remain a promissory note and shall not be converted into a bond within the meaning of section 2(5)(b) of the Stamp Act, 1899. Secondly, if a promissory note is not witnessed, it does not appear that any third person saw it signed, in which case, the best evidence is the handwriting of the parties but if it is witnessed, then it appears, on the face of the promissory note, that there is better evidence behind it i.e. the evidence of witnesses. Moreover the august Court also discussed the impact of section 118 of the Negotiable Instrument Act, 1881, a section which says that until the contrary is proved, inter alia the presumption that every negotiable instrument was made for consideration shall be drawn. Such a presumption is only a prima facie, and may be displaced by raising a probable defence.

Whether a document which has once been admitted in evidence then such admission cannot be called into question at any stage of the suit or in proceedings, on the ground that the instrument has not been duly stamped qua section 36 of the Stamp Act 1899?

It is now well settled premised on the import of section 36 of the Stamp Act 1899 that where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, it has to be decided there and then when the document is tendered in evidence. Once the Court, rightly or wrongly, admits the document in evidence and allows the parties to use it in examination and cross examination, so far as the parties are concerned, the matter is closed. It was also not open for the Court then to exclude it from consideration.

We are here to help

Talk to our lawyers today. We tailor our services around your legal needs so that we can reach the desired outcome together.