Promissory Note Template India

PROMISSORY NOTE (UNCONDITIONAL)

Document ID: PN-[YYYYMMDD]-001
Effective Date: [Date]
Version: 1.0
Governing Jurisdiction: [City, State], India

STATUTORY AND LEGAL COMPLIANCE NOTICE

This Promissory Note is drafted in accordance with the Negotiable Instruments Act, 1881 of India. This template is provided for general informational purposes and constitutes a legal instrument. Users are advised that the validity of this instrument depends upon compliance with the Indian Stamp Act, 1899, which requires the payment of appropriate stamp duty in the relevant state of execution. Failure to stamp this instrument may render it inadmissible as evidence in Indian courts. Consult with local legal counsel to verify current stamp duty requirements in your jurisdiction.

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1. PARTIES AND RECITALS

This Promissory Note (“Note”) is made and entered into as of the Effective Date by and between:

MAKER (The Borrower): [Full Legal Name of Borrower], an individual/entity organized under the laws of India, having its principal place of business/residence at [Full Address] (“Maker”).

PAYEE (The Lender): [Full Legal Name of Lender], having its principal place of business/residence at [Full Address] (“Payee”).

RECITALS: WHEREAS, the Maker desires to borrow funds from the Payee, and the Payee has agreed to lend such funds to the Maker subject to the terms and conditions set forth herein.

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/USD] ([Amount in Words]) (the “Principal Amount”), together with interest on the unpaid principal balance at the rate of [Percentage]% per annum, calculated on a [Daily/Monthly/Annual] basis.

3. REPAYMENT TERMS

The Principal Amount and accrued interest shall be paid in full on [Maturity Date] (the “Due Date”). Payments shall be made via [Bank Transfer/NEFT/RTGS] to the account designated by the Payee in writing. In the event of default in payment, the Maker shall be liable for a late fee of [Percentage]% per month on the overdue amount until fully discharged.

4. PREPAYMENT

The Maker reserves the right to prepay the Principal Amount, in whole or in part, at any time without penalty. Any partial prepayment shall be applied first to accrued interest and thereafter to the principal balance.

5. EVENTS OF DEFAULT

An "Event of Default" shall occur if: (a) Maker fails to make any payment when due under this Note; (b) Maker files for insolvency or bankruptcy, or becomes subject to any liquidation proceedings; (c) Maker breaches any material representation or warranty contained herein. Upon the occurrence of an Event of Default, the entire outstanding balance, including accrued interest, shall become immediately due and payable, at the option of the Payee.

6. REPRESENTATIONS AND WARRANTIES

The Maker represents and warrants that: (a) The Maker has the full power, authority, and legal capacity to enter into and perform the obligations under this Note. (b) This Note constitutes a legal, valid, and binding obligation of the Maker, enforceable in accordance with its terms. (c) The execution and delivery of this Note do not violate any law, regulation, or contractual obligation to which the Maker is bound.

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], India. The parties agree to first attempt to resolve any dispute through amicable negotiation before resorting to litigation.

8. MISCELLANEOUS

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

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EXECUTION AND SIGNATURE BLOCKS

FOR MAKER (BORROWER): Signature: _____________________________________ Printed Name: [Name of Signatory] Title/Capacity: [Role/Capacity] Date: [Date]

FOR PAYEE (LENDER): Signature: _____________________________________ Printed Name: [Name of Signatory] Title/Capacity: [Role/Capacity] Date: [Date]

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STEP-BY-STEP EXECUTION AND FILING GUIDE

1. Drafting: Fill all bracketed fields in the document. Ensure that all amounts are expressed in both words and figures.
2. Stamp Duty: Determine the applicable stamp duty for a "Promissory Note" in your state under the Indian Stamp Act, 1899. Purchase the requisite non-judicial stamp paper or use an e-stamping portal to secure the legal validity of the document.
3. Verification: Verify the signatory authority. If the Maker is a corporation, ensure the signatory possesses a Board Resolution authorizing the execution of the promissory note.
4. Execution: Print the document on the stamped paper. All parties must sign each page of the document. Digital signatures (e.g., DocuSign) are valid under the Information Technology Act, 2000, provided they are Aadhaar-based or issued by a Certifying Authority.
5. Notarization: While not strictly mandatory for a promissory note, having the document notarized by a Public Notary adds an extra layer of authentication for evidentiary purposes.
6. Record Retention: The Payee must retain the original physical copy (if executed on physical stamp paper) in a secure, fire-proof environment as it is a negotiable instrument and the primary evidence of the debt.