The main legal point established in the judgment is the requirement for the first holder of a promissory note in British India to affix the proper stamp and cancel the note before presenting it for acceptance or payment or before endorsing, transferring, or negotiating it, as specified in Section 19 of the Stamp Act.

Mockett, J.

1. This is a civil revision petition to revise an order of the learned District Munsif, Tinnevelly and it relates to the Stamp Act. The defendant made a promissory note in Colombo on the 11th March, 1934 in favour of one Arunachala Thevar. The promissory note was at the time stamped with one anna adhesive stamp, the correct stamp for a note in British India and was duly cancelled. That must be taken to have happened on the 11th March, 1934. On or before the 11th March, 1935, the promissory note came into British India and was assigned to the plaintiff. The relevant portions of the Stamp Act are:

Section 3. Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that schedule as the proper duty therefore respectively, that is to say--

(b) every promissory note drawn or made out of British India on or after that day and accepted or paid, or presented for acceptance or payment, or indorsed, transferred or otherwise negotiated, in British India.

2. Section 19 provides that:

The first holder in British India of any promissory note drawn or made out of British India shall, before he presents the same for acceptance or payment or endorses, transfers or otherwise negotiates the same in British India, affix thereto the proper stamp and cancel the same.

3. There is a proviso that:

If, at the time any such bill of exchange or note comes into the hands of any holder thereof in British 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.

4. The important words in Section 19 are the opening words, "The first holder in British India", The Act does not seem to be concerned with the possession o| the bill or promissory note before then and indeed Seshagiri Aiyar, J., in Kunhi Koya Haji v. Assan Bava Haji (1918) 36 M.L.J. 188 has held that a suit can be brought on a promissory note made outside British India as between promisor and promisee even though unstamped. But the first holder in British India must affix a proper stamp and cancel the note before he presents the same for acceptance or payment or endorses or transfers or otherwise negotiates the same in British India. So far as a promissory note is concerned stamping and cancellation seem to be required only before transfer or indorsement. It has been held in Mahomed Rowthan v. Mahomed Hussain Rowthan (1899) 9 M.L.J. 135 : I.L.R. Mad. 337 that this provision (Section 19) is only applicable to a holder where there is one of those acts set out in the section and that it need not be stamped in the manner provided when it was not dealt with in any of the ways set out. See also Griffin v. Weatherby (1868) L.R. 3 Q.B. 753. Mr. Justice Shephard in Ebrahim Rowthan v. Abdul Rahiman Mahomedi (1898)8MLJ182 , following Griffin v. Weatherby3, also took the view that the first holder who was the plaintiff had, before presenting it for acceptance or payment or before endorsing, transferring or otherwise negotiating it, to affix the proper stamp but none of these things had happened and therefore there was no obligation to affix any stamp. But in this case, it is common ground that the note has been endorsed to the proper plaintiff. I think that the first holder whether he is the promisee himself or his endorsee should have affixed the stamp and that the time for affixing the stamp must necessarily be some time in British India because it is the first holder in British India who is affected.

5. I would again refer to Seshagiri Aiyar, Js decision that a promissory note made abroad can be sued on without a stamp at all. There is a proviso to Section 19 as quoted above and the learned Counsel fo