Facts of the Case
- A document states:
“I promise to pay B Rs.550 and all other sums which shall be due to him.” - It is assumed to be signed by the maker, showing an intention to make a payment.
- The key question is whether this document qualifies as a promissory note under Indian law.
Issues in the Case
- Does the document contain an unconditional and certain promise to pay a fixed amount?
- Is the inclusion of “all other sums which shall be due to him” valid in a promissory note?
- Does the uncertain amount violate the requirements of a promissory note?
Principles Associated With It
- Under Section 4 of the Negotiable Instruments Act, 1881, a promissory note must:
- Contain a clear and unconditional promise to pay
- Be for a certain and definite sum of money
- Be in writing and signed by the maker
- Be payable to a specific person or bearer
- The phrase “and all other sums which shall be due to him” introduces uncertainty regarding the total amount payable.
- A promissory note must promise to pay a definite sum — not a variable or unascertained amount.
Judgement
- The inclusion of an uncertain and future-determined amount (i.e., “all other sums…”) renders the instrument invalid as a promissory note.
- It fails the requirement of a “certain sum of money” under Section 4.
- Therefore, this is not a valid promissory note under Indian law.