Stamping defect in a hundi remained uncured; the Court held the instrument inadmissible and challenge to validity open.

A hundi bearing an uncancelled one-anna stamp was held inadmissible in evidence because the Collector's endorsement after impounding did not attract the conclusive presumption under Section 40, which expressly excluded instruments chargeable with a duty of one anna. The endorsement was therefore not one made in accordance with the section, and Section 120 of the Negotiable Instruments Act could not bar challenge to the instrument's validity unless there was a properly stamped bill of exchange before the Court. The alternative contention that the plaintiff could sue independently of the hundi also failed because the plaint rested solely on the hundi. The challenge was open and the application was dismissed with costs.

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Issues: Whether a hundi bearing an uncancelled one-anna stamp, and endorsed by the Collector as sufficiently stamped after impounding, could be received in evidence, and whether Section 120 of the Negotiable Instruments Act barred challenge to its validity.

Analysis: The certificate of the Collector could not attract the conclusive presumption under Section 40 because that provision expressly excluded instruments chargeable with a duty of one anna. The endorsement was therefore not one made in accordance with the section. The ruling relied upon by the plaintiff concerned a different situation under the provision corresponding to Section 31 and did not govern the present case. Section 120 of the Negotiable Instruments Act could apply only if there was a properly stamped bill of exchange before the Court. An unstamped instrument, unless admissible under some special provision, remained inadmissible in judicial proceedings. The alternative submission that the plaintiff could sue independently of the hundi also failed because the plaint itself rested on the hundi alone.

Conclusion: The hundi was not receivable in evidence, the Collector's endorsement did not cure the defect, and the challenge to its validity was open. The application was dismissed with costs.

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