Promissory Note with one rupee revenue stamp affixed thereon and signed by the borrower across the stamp is O.K. as legal proof. If your friend has immovable property ask him to deposit his original title deeds with a simple letter that they have been deposited with intent to create a security thereon for the loan by you. Of course getting PDC(s) also would be an added advantage.

promissory note is ok , however i would advise you to get a cheque from the borrower.