The first holder in India of any bill of exchange payable otherwise than on demand, or promissory note drawn or made out of India shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise negotiates the same in India, affix thereto the proper stamp and cancel the same:
Provided that —
(a) if at the time any such bill or note comes into the hands of any holder thereof in India, the proper adhesive stamp is affixed thereto and cancelled in manner prescribed by section 12, and such holder has no reason to believe that such stamp was affixed or cancelled otherwise than by the person, and at the time required by this Act, such stamp shall, so far as respects such holder, be deemed to have been duly affixed and cancelled;
(b) nothing contained in this proviso shall relieve any person from any penalty incurred by him for omitting to affix or cancel a stamp.
Legal Commentary & Landmark Judgments: Section 19
Section 19 of the Indian Stamp Act, 1899 governs the stamping of foreign bills of exchange and promissory notes drawn outside India, imposing a strict duty on the first holder in India to affix and cancel proper adhesive stamps prior to presentation, endorsement, transfer, or negotiation.
In international trade finance and cross-border collections involving foreign bills of exchange or promissory notes, the receiving Indian bank or holder must affix and cancel adhesive stamps before presenting the bill to the drawee for acceptance. If presentation occurs without stamping, subsequent stamping is void and the entire debt action on the negotiable instrument fails.