Promissory Note Format for Loan India

PROMISSORY NOTE (DEMAND)

Document ID: PN-[YYYYMMDD]-001
Effective Date: [Date, Month, Year]
Governing Jurisdiction: Courts of [City/State], India
Version: 1.0

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STATUTORY & LEGAL COMPLIANCE NOTICE

DISCLAIMER: This Promissory Note is drafted in accordance with the Negotiable Instruments Act, 1881 of India. This document constitutes a legally binding instrument. The enforceability of this instrument is subject to appropriate stamping under the Indian Stamp Act, 1899, as applicable in the specific State of execution. Failure to pay the requisite stamp duty may render the instrument inadmissible as evidence in Indian courts. Parties are advised to verify local state-specific stamp duty requirements prior to execution.

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1. PARTIES

MAKER (BORROWER): [Full Legal Name of Borrower], having a principal place of residence/business at [Full Address, PIN Code], (hereinafter referred to as the "Maker").

PAYEE (LENDER): [Full Legal Name of Lender], having a principal place of residence/business at [Full Address, PIN Code], (hereinafter referred to as the "Payee").

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2. PROMISE TO PAY

For value received, the Maker hereby unconditionally promises to pay to the order of the Payee the principal sum of Indian Rupees [Amount in Figures] (INR [Amount in Words] only), together with interest on the outstanding principal balance at the rate of [Percentage]% per annum, calculated on a monthly compounding basis.

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3. PAYMENT TERMS

The principal amount and all accrued interest shall be payable in full on demand by the Payee. In the event of no demand being made, the total outstanding liability shall be satisfied by the Maker on or before [Maturity Date]. Payments shall be made via NEFT/RTGS/IMPS to the Payee’s designated bank account: [Bank Name], [Account Number], [IFSC Code].

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4. 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. If the Maker fails to perform any obligation herein, the entire unpaid principal balance and accrued interest shall, at the option of the Payee, become immediately due and payable without further notice.

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5. PREPAYMENT

The Maker reserves the right to prepay the principal amount in whole or in part at any time without any prepayment penalty, provided that all accrued interest up to the date of such prepayment is settled in full.

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6. REPRESENTATIONS AND WARRANTIES

The Maker represents and warrants that: (a) they have the full legal capacity and authority to enter into this agreement; (b) this Note constitutes a legal, valid, and binding obligation of the Maker; and (c) the execution of this Note does not conflict with any other contractual obligations of the Maker.

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7. GOVERNING LAW AND DISPUTE RESOLUTION

This Note shall be governed by and construed in accordance with the laws of India. Any dispute arising out of or in connection with this Note, including any question regarding its existence, validity, or termination, shall be subject to the exclusive jurisdiction of the courts at [City, State].

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8. MISCELLANEOUS

(a) Severability: If any provision of this Note is held to be invalid or unenforceable, the remaining provisions shall continue to be valid and enforceable. (b) Entire Agreement: This Note constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements. (c) Amendments: No modification or amendment of this Note shall be effective unless in writing and signed by both parties.

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9. EXECUTION & SIGNATURES

FOR MAKER (BORROWER): Signature: _____________________________________ Printed Name: [Full Name of Signatory] Title: [Role, if applicable] Date: [Date]

FOR PAYEE (LENDER): Signature: _____________________________________ Printed Name: [Full Name of Signatory] Title: [Role, if applicable] Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Stamp Duty Verification: Prior to execution, consult the schedule of the Indian Stamp Act as applicable to your specific state. Purchase the required e-Stamp paper or utilize Franking services to ensure the instrument is admissible in court.
2. Bracket Completion: Use a word processor to replace all [...] fields with accurate legal information. Ensure the "Amount in Words" matches the "Amount in Figures" exactly to avoid ambiguity.
3. Execution: Ensure the document is signed in the presence of two witnesses. If the Maker is an entity, obtain a Board Resolution authorizing the signatory.
4. Digital Execution: If using DocuSign or Adobe Sign, ensure that the audit trail includes the IP address and email verification of all signatories. Note that digital signatures under the IT Act (2000) are valid, but they do not negate the requirement for physical stamping if required by local state law.
5. Record Retention: Retain the original stamped hard copy in a secure, fireproof document repository. Digital copies should be encrypted and backed up for the duration of the loan period plus the statutory limitation period (typically 3 years from the date of default).