Stamp paper purchased in another State did not invalidate a promissory note; the defect was curable and admissibility was preserved.

A State rule on stamp paper purchase could not invalidate a promissory note falling within Parliament's exclusive competence on stamp duty rates, because the rule could not attach invalidity merely due to purchase of the stamp paper in another State. The defect from using stamp paper of another State was treated as a matter of improper description, and the Stamp Act with the Rules provided a certification mechanism to cure it. The instrument was therefore not inherently void or inadmissible, and the objection to admissibility was set aside.

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Issues: (i) Whether Rule 3(iii) of the Indian Stamp Rules, 1925 could invalidate a promissory note executed in Andhra Pradesh on stamp paper purchased in Tamil Nadu; (ii) whether any defect arising from use of stamp paper of another State was curable under the Stamp Act and the Rules.

Issue (i): Whether Rule 3(iii) of the Indian Stamp Rules, 1925 could invalidate a promissory note executed in Andhra Pradesh on stamp paper purchased in Tamil Nadu.

Analysis: The promissory note fell within Entry 91 of List I of the Seventh Schedule to the Constitution of India, under which Parliament alone has power to prescribe the rate of stamp duty for promissory notes. The State's rule requiring use of stamp papers purchased in Andhra Pradesh could operate only for instruments within the State's competence under Entry 63 of List II. A State rule could not attach invalidity to an instrument governed by a Union entry merely because the stamp paper was purchased outside the State.

Conclusion: The requirement in Rule 3(iii) could not be used to invalidate the promissory note.

Issue (ii): Whether any defect arising from use of stamp paper of another State was curable under the Stamp Act and the Rules.

Analysis: Section 37 of the Indian Stamp Act, 1899 permits certification of instruments bearing a stamp of sufficient amount but of improper description, and Rule 18 of the Indian Stamp Rules, 1925 provides the mechanism for such certification. The defect was therefore one of form or description and did not render the instrument inherently void or inadmissible.

Conclusion: The defect was curable and did not destroy admissibility of the promissory note.

Final Conclusion: The revision succeeded, the order sustaining the objection to admissibility was set aside, and the promissory note was held admissible.

Ratio Decidendi: A State rule regulating the use of stamp papers cannot invalidate an instrument falling within Parliament's exclusive competence on stamp duty rates, and a defect of improper stamp description is curable under the statutory certification mechanism.

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