- The first holder in [India] [Substituted by Act 43 of 1955, Section 2, for "the States " (w.e.f. 1.4.1956).] of any bill of exchange [payable otherwise than on demand] [39a. Inserted by Act 5 of 1927, Section 5.] [*] [The word "cheque " omitted by Act 5 of 1927, Section 5.] or promissory note drawn or made out of [India] [Substituted by Act 43 of 1955, Section 2, for "the States " (w.e.f. 1.4.1956).] shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise negotiates the same in [India] [Substituted by Act 43 of 1955, Section 2, for "the States " (w.e.f. 1.4.1956).], affix thereto the proper stamp and cancel the same:

Provided that

(a) if, at the time any such bill of exchange [*] [The word "cheque " omitted by Act 5 of 1927, Section 5.]or note comes into the hands of any holder thereof in [India] [Substituted by Act 43 of 1955, Section 2, for "the States " (w.e.f. 1.4.1956).], 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