Hi Krishna,
I also tried to find the validation for procedure and failed. What was on my mind when I posted earlier was related to Window -> Properties -> SAP HANA -> Modeler -> Validation Rules but this is not the same for procedure.
Also the validation error seems to not being raised by Studio but the server, so it's not a frontend validation anyway.
Trying to replicate your error I create two procedures here and both worked fine with cursor.
The behavior you found was the same I found, the .procedure goes to repository and _SYS_BIC after activation and .hdbprocedure goes to catalog only.
As far as I understood as you are moving from catalog (manually) and it worked on catalog (.hdbprocedure), I could check the declaration of table types of header as it's the main difference.
Despite this investigation of declaration, you can try create it on modeler direct and see what you found on .procedure created. This can speed up investigation.
Regards, Fernando Da Rós
BTW: I'm faced an very strange behavior that each caracter I type on .procedure or .hdbprocedure freezes studio by around 15 seconds ?!?!?!?! (studio rev73)