C. ---Of the time of stamping InstrumentsCentral

Section 19 of The Indian Stamp Act, 1899 in hindi

The first holder in 1[India] of any bill of exchange 3[payable otherwise than on demand], 2*** or promissory note drawn or made out of 1[India] shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise negotiates the same in 1[India], affix thereto the proper stamp and cancel the same: Provided that,--

(a)if, at the time any such bill of exchange, 2*** or note comes into the hands of any holder thereof in 1[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 relates to 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. STATE AMENDMENT Himachal Pradesh.-- Addition of a new section 19-A.--After section 19 of the said Act the following new section shall be inserted, namely:--- 19-A. Payment of duty on certain instruments liable to increased duty in Himachal Pradesh under clause (bb) of section 3.-- Where any instrument has become chargeable in any part of India and thereafter becomes chargeable with higher rate of duty in the Himachal Pradesh under clause (bb) of the first proviso to section 3 as amended by the Indian Stamp (Himachal Pradesh Amendment) Act, 1952--
1. (i)notwithstanding anything contained in the said proviso, the amount of duty chargeable on such instrument shall be the amount chargeable on it under Schedule- I-A less the amount of duty, if any already paid on it in India,
2. (ii)in addition to the stamps, if any, already affixed thereto, such instrument shall be stamped with the stamps necessary for the payment of the amount of duty chargeable on it under clause (i) in the same manner and at the same time and by the same person as though such instrument were an instrument received in India for the first time at the time when it became chargeable with the higher duty. [Vide Himachal Pradesh Act 4 of 1953, s. 7]

Summary

Sets the rules for bills of exchange and promissory notes created outside the country.
Charges the first person who holds the note in India with the duty to stamp and cancel it.
Requires stamping to occur before the holder presents the note for payment or transfers it to someone else.
Protects later holders who receive a note that looks like it was stamped correctly and on time even if it was not.
Keeps the original legal responsibility and penalties on the first person even if a later holder is protected.

Practical examples

1Meera receives a promissory note for 50,000 rupees from her uncle in New York. Before she goes to the bank to collect the money or gives the note to her brother, she must buy the correct stamp, stick it on the note, and cancel it.

2A company in Chennai receives a bill of exchange from a supplier in Singapore. Before the company manager signs the back of the bill to transfer it to a business partner, he must ensure the proper Indian stamp is attached and cancelled.

FAQ

1. Who must stamp a foreign bill of exchange according to Section 19 of The Indian Stamp Act, 1899?

The first person who holds the bill in India is responsible for stamping and cancelling it under Section 19 of The Indian Stamp Act, 1899.

2. When exactly must the stamp be applied under Section 19 of The Indian Stamp Act, 1899?

It must be done before the holder presents it for payment or tries to transfer it under Section 19 of The Indian Stamp Act, 1899.

3. What happens if I receive a foreign note that is already stamped under Section 19 of The Indian Stamp Act, 1899?

If the stamp looks correct and you have no reason to doubt it, the note is treated as properly stamped for you under Section 19 of The Indian Stamp Act, 1899.

4. Can I avoid a penalty if the next person is protected by Section 19 of The Indian Stamp Act, 1899?

No, Section 19 of The Indian Stamp Act, 1899 states that the original person who failed to stamp it is still liable for any penalties.

Test yourself

Q1.Under Section 19 of The Indian Stamp Act, 1899, the first holder must stamp a foreign bill before they:

Q2.What type of bill is specifically mentioned as being subject to this rule in Section 19 of The Indian Stamp Act, 1899?

Q3.According to the proviso in Section 19 of The Indian Stamp Act, 1899, a holder is safe if they receive a note where:

Q4.If Arjun fails to stamp a note and passes it to Meera, and the note is deemed stamped for Meera under Section 19 of the 1899 Act:

18PreviousSection 18 Instruments other than bills and notes executed out of India.20NextSection 20 Conversion of amount expressed in foreign currencies.

←Section 18 Section 20→

C. ---Of the time of stamping InstrumentsCentral

Section 19 of The Indian Stamp Act, 1899 in hindi

(a)if, at the time any such bill of exchange, 2*** or note comes into the hands of any holder thereof in 1[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 relates to 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. STATE AMENDMENT Himachal Pradesh.-- Addition of a new section 19-A.--After section 19 of the said Act the following new section shall be inserted, namely:--- 19-A. Payment of duty on certain instruments liable to increased duty in Himachal Pradesh under clause (bb) of section 3.-- Where any instrument has become chargeable in any part of India and thereafter becomes chargeable with higher rate of duty in the Himachal Pradesh under clause (bb) of the first proviso to section 3 as amended by the Indian Stamp (Himachal Pradesh Amendment) Act, 1952--
1. (i)notwithstanding anything contained in the said proviso, the amount of duty chargeable on such instrument shall be the amount chargeable on it under Schedule- I-A less the amount of duty, if any already paid on it in India,
2. (ii)in addition to the stamps, if any, already affixed thereto, such instrument shall be stamped with the stamps necessary for the payment of the amount of duty chargeable on it under clause (i) in the same manner and at the same time and by the same person as though such instrument were an instrument received in India for the first time at the time when it became chargeable with the higher duty. [Vide Himachal Pradesh Act 4 of 1953, s. 7]

Summary

Sets the rules for bills of exchange and promissory notes created outside the country.
Charges the first person who holds the note in India with the duty to stamp and cancel it.
Requires stamping to occur before the holder presents the note for payment or transfers it to someone else.
Protects later holders who receive a note that looks like it was stamped correctly and on time even if it was not.
Keeps the original legal responsibility and penalties on the first person even if a later holder is protected.