Promissory Note Format for Lending Money in India

PROMISSORY NOTE (DEMAND)

Document ID: PN-IND-[YYYY]-[UNIQUE_ID] Effective Date: [Date, Month, Year] Version: 1.0 Governing Jurisdiction: Courts of [City, State], India

STATUTORY AND LEGAL COMPLIANCE NOTICE

This Promissory Note is drafted in accordance with the Negotiable Instruments Act, 1881, as amended, of the Republic of India. The enforceability of this instrument is subject to appropriate stamping under the relevant State Stamp Act. Failure to execute this instrument on the requisite non-judicial stamp paper of the prescribed value may render the document inadmissible as evidence in Indian courts. Parties are advised to consult with local legal counsel to confirm stamp duty requirements for the specific state of execution.

1. PARTIES

This Promissory Note is made by [Borrower Full Legal Name], having their principal place of residence/business at [Borrower Address] (hereinafter referred to as the "Maker"), in favor of [Lender Full Legal Name], having their principal place of residence/business at [Lender Address] (hereinafter referred to as the "Payee").

2. PROMISE TO PAY

For value received, the Maker hereby unconditionally promises to pay to the order of the Payee the principal sum of [Amount in INR] (Indian Rupees [Amount in Words]) (the "Principal Amount").

3. INTEREST

The Principal Amount shall bear interest at the rate of [Percentage]% per annum, calculated on a simple/compounding basis from the Effective Date until the date of full repayment. Interest shall be payable [Monthly/Quarterly/Upon Maturity].

4. REPAYMENT TERMS

The entire outstanding Principal Amount, together with all accrued and unpaid interest, shall be payable by the Maker to the Payee on [Due Date] (the "Maturity Date") or upon demand, whichever occurs earlier. Payment shall be made via [Bank Transfer/NEFT/RTGS] to the account designated by the Payee.

5. DEFAULT AND LATE FEES

In the event that any payment due under this Note is not received by the Payee within [Number] days of the due date, the Maker shall be liable to pay a late fee of [Percentage]% per month on the overdue amount. Furthermore, upon the occurrence of an Event of Default (as defined herein), the Payee may declare the entire unpaid Principal Amount and all accrued interest immediately due and payable.

6. REPRESENTATIONS AND WARRANTIES

The Maker represents and warrants that: (a) The Maker has the full legal capacity and authority to enter into this Note. (b) This Note constitutes a legal, valid, and binding obligation of the Maker, enforceable in accordance with its terms. (c) The execution of this Note does not violate any existing contract or judicial order to which the Maker is a party.

7. GOVERNING LAW AND DISPUTE RESOLUTION

This Note shall be governed by and construed in accordance with the laws of India. Any disputes arising out of or in connection with this Note shall be subject to the exclusive jurisdiction of the competent courts in [City, State].

8. MISCELLANEOUS

(a) Entire Agreement: This Note constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior agreements. (b) Severability: If any provision of this Note is held to be invalid or unenforceable, such provision shall be severed, and the remaining provisions shall continue in full force and effect. (c) Amendments: No amendment or modification of this Note shall be valid unless made in writing and signed by both the Maker and the Payee. (d) Stamp Duty: The Maker acknowledges responsibility for the payment of all applicable stamp duties and registration charges as required under the laws of the relevant Indian state.

9. EXECUTION AND SIGNATURE BLOCKS

FOR THE MAKER (BORROWER): Signature: _____________________________________ Printed Name: [Borrower Full Name] Date: [Date] Place: [City, State] Witness 1: _________________ Witness 2: _________________

FOR THE PAYEE (LENDER): Signature: _____________________________________ Printed Name: [Lender Full Name] Date: [Date] Place: [City, State]

10. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Stamp Duty Assessment: Before signing, contact the local Sub-Registrar’s office or a legal professional to determine the exact Stamp Duty payable for a Promissory Note in your specific State. Purchase the required value of non-judicial stamp paper.
2. Drafting: Copy the text above into a document editor. Replace all bracketed [ ] fields with accurate legal details. Ensure the Principal Amount is written in both numerals and words.
3. Printing: Print the final document on the purchased non-judicial stamp paper. If the text exceeds one page, continue on plain ledger paper, ensuring the stamp paper is the first page.
4. Execution: Ensure the Maker signs the document in the presence of at least two witnesses. The witnesses should provide their names and addresses adjacent to their signatures.
5. Digital Execution (Optional): If using electronic platforms (e.g., DocuSign), ensure the digital signature is Aadhaar-linked (eSign) to be considered compliant with the Information Technology Act, 2000 for high-value financial instruments.
6. Retention: The Payee must retain the original hard copy of the executed Promissory Note in a secure location, as it serves as the primary evidence of debt in legal proceedings under the Negotiable Instruments Act.
7. Notice of Default: In the event of non-payment, serve a formal demand notice through legal counsel before initiating summary suit proceedings under Order XXXVII of the Code of Civil Procedure (CPC).