Promissory Note

A ‘Promissory Note’ under Negotiable Instruments Act, 1881 means an instrument, in writing containing an unconditional undertaking, signed by the maker, to pay ‘a certain sum of money’ to the bearer / holder of the instrument.   

However, there are instances, wherein, the maker delivers a 'blank promissory note' to the bearer / holder. The amount to be paid is left blank. Also, in such cases, the maker may deny the execution of promissory note. One such defense, the maker may plead that no consideration was passed while executing such promissory note. In this regard, the Madras High Court in its recent judgment in V.S.Veerasamy & other Vs K.Subramaniam, considering the scope of Section 20 of the Negotiable Instrument Act, 1881, has held that when the maker acts negligently and executes a blank promissory note, he is bound by the same. Consequently, it is not open to him to plead that such promissory note cannot be acted upon since no consideration was passed.