Section 4 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 4 defines a "promissory note": a written, signed, unconditional undertaking by the maker to pay a certain sum of money only to a certain person, to that person's order, or to the bearer. This article reads the definition as per the consolidated text consulted and works through the eight illustrations that follow it, because they show where the line falls. If you hold a paper that might or might not be a note, a legal consultation before sending a demand can save time.
A promissory note is an instrument in writing that contains an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person or to the bearer. A bank-note or a currency-note is expressly not a promissory note. Of the eight illustrations, only (a) and (b) are promissory notes; (c) to (h) are not.
The text of section 4
Section 4 is headed "Promissory note". It says that a promissory note is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
It is a single sentence, but it has several separate requirements. The copy consulted prints the illustrations straight after the sentence with no line break; they are part of the section.
The essentials, one by one
| Essential in the text | What it means in practice |
|---|---|
| Instrument in writing | The promise must be on paper or a similar written record. A spoken promise is not a promissory note under this section. |
| Not a bank-note or a currency-note | Money issued as notes is excluded from the definition. |
| Unconditional undertaking | The promise to pay must not depend on an uncertain event or an offset. |
| Signed by the maker | The person who undertakes to pay is the "maker" and must sign. |
| A certain sum of money only | The amount must be certain and the payment must be of money alone. |
| To, or to the order of, a certain person, or to the bearer | The payee is identified, or the instrument is payable to whoever bears it. |
"Instrument in writing"
The first requirement is a writing. The text does not prescribe a form, a printed format or a particular wording. What matters is that the writing contains each of the other elements. A signed printed form and a short handwritten line can both qualify if the elements are all there.
"Unconditional undertaking"
The word "undertaking" is the promise to pay. It must be unconditional. Section 5, which defines a bill of exchange, adds a clarification that applies to "this section and section 4": a promise or order is not "conditional" merely because the time for payment is expressed to fall a certain period after an event that, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. Our article on section 5 explains that clarification.
"Signed by the maker"
The maker is the person who makes the promise. The text requires that the undertaking be signed by the maker. An unsigned note fails this requirement, however clear its other terms.
"A certain sum of money only"
The sum must be certain. The word "only" excludes a promise that mixes money with something else. Section 5 adds that a sum may still be "certain" although it includes future interest or is payable at an indicated rate of exchange, or although the instrument provides that on default of an instalment the balance becomes due.
"To, or to the order of, a certain person, or to the bearer"
The payee must be a certain person, or the note must be payable to the bearer. "To the order of" means that the payee may direct payment to someone else. Section 5 also says a person may be a "certain person" although mis-named or designated by description only.
The eight illustrations
The Act shows A signing eight different instruments. The text says (a) and (b) are promissory notes; (c), (d), (e), (f), (g) and (h) are not. The amounts are those printed in the text, which uses old rupee figures; they illustrate the rule and are not current examples.
| Illustration | Wording as printed | Promissory note? | Why, as the text reasons |
|---|---|---|---|
| (a) | "I promise to pay B or order Rs. 500." | Yes | Written promise, certain sum, to B or order, signed. |
| (b) | "I acknowledge myself to be indebted to B in Rs. 1,000, to be paid on demand, for value received." | Yes | The acknowledgement carries a promise to pay on demand. |
| (c) | "Mr. B. I.O.U. Rs. 1,000." | No | An I.O.U. alone, as printed, contains no undertaking to pay. |
| (d) | "I promise to pay B Rs. 500 and all other sums which shall be due to him." | No | The sum is not certain; it includes "all other sums". |
| (e) | "I promise to pay B Rs. 500 first deducting there out any money which he may owe me." | No | Payment is subject to a deduction, so the undertaking is not unconditional and the sum is not certain. |
| (f) | "I promise to pay B Rs. 500 seven days after my marriage with C." | No | The event may never happen, so it is not an event certain to happen. |
| (g) | "I promise to pay B Rs. 500 on D's death, provided D leaves me enough to pay that sum." | No | The promise depends on a proviso about what D leaves. |
| (h) | "I promise to pay B Rs. 500 and to deliver to him my black horse on 1st January next." | No | It is not a promise of money only. |
The text states the results; the reasons in the third column are drawn from the words of the section itself and from section 5's clarifications, not from any other source.
What the illustrations teach
Illustration (b) shows that a note need not say "I promise to pay" in so many words. An acknowledgement of debt to be paid on demand, for value received, was treated in the text as a promissory note. Illustration (c) shows the opposite: a bare acknowledgement of a figure is not enough.
Illustrations (d) to (h) are all about certainty and the absence of conditions. A note that says "and all other sums" has no certain figure. A note with a deduction or a proviso has a condition. A promise tied to marriage, or to what a person leaves at death, ties payment to something not certain. A promise that includes a horse as well as money is not a promise of money only.
A practical example
Raj Enterprises borrows an amount from Sunita and signs a paper saying: "I promise to pay Sunita or order a sum of Rs. 2,00,000 on demand." The paper is in writing, signed by the maker, has a certain sum of money only, and names a certain person. It has the shape of illustration (a). If Raj instead wrote that he would pay "after deducting whatever Sunita owes me", the shape would be that of illustration (e), and the text says that is not a promissory note. The paper might still record a debt, but this section would not call it a promissory note.
Why the definition matters
The definition decides whether the later provisions of the Act on makers, holders and indorsers can apply to the paper. For stamp matters, our guide on stamp duty on a promissory note and a bill of exchange discusses the topic; this Act's text consulted says nothing on stamp duty rates, and none are given here. For the wider family of instruments, see types of negotiable instruments.
Need help with a promissory note?
If you are about to rely on a signed paper as a promissory note, or have been sent a demand on one, we can check whether the wording meets section 4 and what the next step should be. Speak to us through legal consultation and bring the original paper.
Key takeaways
- A promissory note must be in writing, signed by the maker, and contain an unconditional undertaking to pay a certain sum of money only.
- The payee must be a certain person, or the note must be payable to the bearer; "to the order of" is also allowed.
- A bank-note or a currency-note is not a promissory note.
- Under the illustrations, (a) and (b) are notes; an I.O.U. alone, an uncertain sum, a deduction, an uncertain event, a proviso and a mixed promise of money and goods are not.
- Section 5's clarifications on conditions, certain sums and certain persons apply to this section as well.
Read next
- Section 5: bill of exchange
- Section 6: cheque, truncated cheque and electronic cheque
- Section 7: drawer, drawee, acceptor and payee
- Introduction to the Negotiable Instruments Act, 1881
Disclaimer: Based on a consolidated text of the Negotiable Instruments Act, 1881 stating the position as of 26 December 2015 and on the Negotiable Instruments (Amendment) Act, 2018, as consulted on 2 October 2026. Later amendments and current criminal procedure law should be checked. This article is general information, not legal advice; check the official text before acting.