An article about " Stamping and Execution "

Stamping and Execution

I. Whether a promissory note, which is not adequately stamped is admitted in evidence?

The Indian stamp act has spelt out what are the document which are admitted as evidence though insufficiently stamped. Section 35 the act deals with this situation . There are certain document if insufficiently stamped which are not admitted in evidence and another category of insufficiently stamped document which are admitted in evidence on payment of penalty. The following documents if not sufficiently stamped are not at all admitted in evidence, even on payment of penalty

1.    Promissory note

2.  Bill of exchange

3. Document which required to be stamped with 10 pairs or less

Some states have amended this minimum stipulation of 10 paise; in Andhra Pradesh it is 20 paise and in Tamilnadu it is 25 paise. All other document through insufficiently stamped are admitted in evidence on payment of penalty.

2. Who is to decide the proper stamp duty on any instrument incase of any doubts ?

Stamp acts of various states and union Government provide the stamp duty payable on documents. In case of any doubt the concerned party may approach the collector or dist registrar and apply for the deciding correct stamp duty payable on the instrument; on payment of certain fees.

The collector or dist registrar may call for the abstract of the instrument and also evidence to prove that all the circumstance and fact are  correctly set forth in the instrument the collector there of will decide the correct stamp duty payable and on payment of duty or any shortfall, shall certify to that effect. Such person need not pay any penalty or fine. If the document does not attract any stamp duty he shall certify accordingly.

3. Can document be stamped after signed  by parties?

No, cannot be.  All the document need to de stamped and cancelled at the time of execution. Execution means the process of affixing the signature on the document. Adhesive stamps such as revenue stamps should also be cancelled by the party's signature across the face  of the stamp evidencing that the stamp were cancelled at the time of execution. Document which are to be franked should not bear the date of execution andsignature of the parties. The document are to be dated at the time of franking the and parties have to execute the document after they are franked.

4. If an instrument is under stamped by accident or ignorance of the parties can it be rectified. If so what is the procedure?

YES. There is provision to rectify the mistake. Section 41 of Indian stamp act, section 40 of Karnataka stamp act provide for such situation. The time limit is one year from the date of execution. But this relief is not applicable for promissory note, Bill of exchange; instrument attracting stamp duty of 15 parties of less, mortgage of crop. The concerned parties on his own may produce the document, may bring it, to the notice of the collector or dist registrar the fact that the instrument in under stamped and agrees to pay the amount of the shortfall. If the collector or dist registrar is satisfied that the instrument is under stamped by accident, mistake or urgent necessity he may permit the party to pay the correct stamp duty and shall certify to the that effect.