Rules related to promisory note
Querist :
Anonymous
(Querist) 19 September 2011
This query is : Resolved
Hi All,
If i lend money to any one
1) is it enough if i take that persons signature on a white paper ?
2) if so, do i have to take his signature on a revenue stamp affixed on white paper ?
3) is it necessary to have his thumb impression on white paper if so which thumb left or right ?
4)or is it mandatory to have his signature/thumb impression on promisory note ?
5) is it necessary to fill all contents of promisory note or is it better to have it blank.
kindly clarify me on this .
R.Ramachandran
(Expert) 19 September 2011
If you take signature on blank paper, the person can always contest that it was not executed by him.
If (point no.5 above) you take the promissory note duly executed by the party containing all the necessary particulars as required for a promissory note, that is the best way.
Shonee Kapoor
(Expert) 19 September 2011
Anything on a blank page is a fraud. Hence such can be contested.
Any promissory note should contain the nature of transaction, date and duly executed by the parties in the presence of two witnesses.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
Guest
(Expert) 19 September 2011
While endorsing the views of Experts Ramachandran and Shonne, I would like to advise you that you to take the recourse of getting a promisory note duly executed in legal way. The document writers sitting in court premises know all such formats and processes.
Querist :
Anonymous
(Querist) 19 September 2011
Dear All,
my questions remained unanswered
if you all are suggesting to go ahead with promisory note, do i have to get it signed on revenue stamp or not ?
wat abt thumb impression rules ?
kindly clarify me on this.
Guest
(Expert) 19 September 2011
Stamp duty is charged on the value noted in the promisory note. Revenue stamp of Re.1 is meant just to acknowledge the receipt of a sum of more than Rs.5,000 as a money receipt granted in lieu money having been received.
Taking thumb impression depends only at your own sweet will, if you want to take in addition of the valid signature. However the rule of thumb impression applies only in case of an illiterate person. Left hand thumb impression can be taken in case of a male executor, while in the case of a woman, it is the right hand thumb impression.
If you take the help of a document writer, he, himself, would do all the necessary formalities for your sake.
prabhakar singh
(Expert) 19 September 2011
1) No,it would be wrong to do so.
2)No,that to would be wrong,the very theme to get signed a blank paper is a wrong in the eye of law,as must incorporate on paper only what we have agreed to do by conclusions of our negotiation.
4)NO it is NOT mandatory.All depends on which terms and condition you are lending.Money lending is regulated business,are you registered for???
5)Any document agreed to be executed should forth with after its draft must be dated,signed by party[parties ,if bilaterally executed] and duly witnessed by two persons known to parties on a proper value of stamp paper.
prabhakar singh
(Expert) 19 September 2011
It is out dated practice of individuals now to lend money against a promissory note since time it has become regulated for which licence is required;
better deal by a cheque,and seek proper
advises for how to with that, unless the money desired to be lend is black,but in case of black money trust is the only hope and not the courts,as INCOME TAX law bars to transact in cash above Rs.20,000/=.
Guest
(Expert) 19 September 2011
Dear Shri Prabhakar,
With reference to your latest response, I would like to say that what you have stated is applicable for a person who does a regular money lending business, not for a person, who transacts at rare occasions and he wants to be more safe to recover his money by entering in to the process of a promisory note.
So, I don't think it is unfair on the part of the querist to go for a promisory note in addition to making the transaction through a crossed cheque, if likes. Moreover, making payment by check is also not mandatory for an amount of less than 20K, if he does not prefer to make transaction through cheque.
prabhakar singh
(Expert) 19 September 2011
DEAR DHINGRA JI!
It is true that a single transaction of lending would not attract business of lending
required to be licensed but in court several complication of proof arises and there are several other state enactments which come into way of a promissory note depending even upon the class and category of the debtor.
If one has to transact by crossed cheque then one can very well get a plane recital of its receipt as well as a return cheque of post dated cheque togather with its delivery note,without complicating a thing too much and having two remedies criminal as well as civil without any need of two witnesses,whom one does not how and to which side they shall finally depose.
On the point of 20 k you have stated the same thing that i stated but in different languages,which is inevitable,but why you objected then is not intelligible to me.
The Questioner is KING OF HIS CAUSE and at choice to choose his way among opinions coming forward to him but i do not think i can not speak freely in manner i independently conceive a thing.
Shastri J.K.
(Expert) 19 September 2011
it will be better you contact your loca lcounsel.
Guest
(Expert) 20 September 2011
Prabhakar ji,
I did not object, rather I tried to clarify the point on Promisory Note, as the promisory note does not lie only in the domain of a professional money lender, but any body can use that when giving any money on loan basis to any one. It fors one of the negotiable instrument. That can be an additional security to the person who gives the money to some one. You would like to appreciate that NI Act does not put any embargo on any class of persons to use the process of PN.
