Question Scenario
Rama executes a promissory note in the following form, 'I promise to pay a sum of ₹ 10,000 after three months'. Decide whether the promissory note is a valid promissory note.
Estimated Writing Time: 5 mins Try in Practice Mode
Source: 6)a)ii)3m,MDTP5, 6)a)ii)4m,MTP1,Sept20243 Marks
Back to Law List Suggested Answer
1. Provisions of the Act / Applicable Law
The promissory note is an unconditional promise in writing. In the above question, the amount is certain but the date and name of the payee is missing, thus making it a bearer instrument. As per Reserve Bank of India Act, 1934, a promissory note cannot be made payable to bearer - whether on demand or after certain days. Hence, the instrument is illegal as per Reserve Bank of India Act, 1934 and cannot be legally enforced.
Exam Strategy Tip
When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.
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