Contract
P.S.Subbaraman
(Querist) 16 October 2009
This query is : Resolved
When a contract is entered among two parties A and B there is violation of stamp laws but at a later stage can the other party B enforce the same through court by set righting the same legally.
DD Sathe
(Expert) 16 October 2009
If it is set right obviously violation will cease.
Contract is essentially between two parties and procedural lapses as mentioned by you may not dilute relative obligations unless contract is decared void for such reason.
Raj Kumar Makkad
(Expert) 16 October 2009
So far as stamp duty is concerned, when the contract is executed through court of law, the same is payable as per law and contract exists till it is set aside by proper court of law and it hardly differs if no stamp duty has been paid thereon.
joyce
(Expert) 16 October 2009
I agree with Raj makkad, when stamp duty is mandatory then voilation of it will become a irregular procedure in contract, but contract will not be void -ab-natio, but it may be rectified if irregularties are quoted with bonafide reasons.
Sachin Bhatia
(Expert) 16 October 2009
agree with Joyce & Mr. Raj
venkatesh Rao
(Expert) 17 October 2009
I do agree with all the experts. Non-Payment of required stamp duty never vitiates the legal contract. B can very well enforce the contract through court. The court may direct the parties to pay the duty as well as penalty. This can be done even after passing of decree. Deficit or non payment of duty under stamp Act has nothing to do with the enforcement of valid contracts.
H. S. Thukral
(Expert) 17 October 2009
There is some confusion created by my Ld. Friends while answering the query.
An instrument not stamped or inadequately stamped shall be inadmissible in evidence as such ( Section 35 Indian Stamp Act)but it can be admitted in evidence if stamp duty as well as penalty as prescribed under the proviso in ss 35 has been paid. If the contract inadquately stamped could not be taken into evidence how a favourable decree for enforcement of the same could be passed? However the defendant has to take objection before the document is admitted into evidence.
It is rightly said that contract shall not be void for the said reason.
Khaleel Ahmed
(Expert) 22 October 2009
I agree with Mr Harbhajan Singh.
venkatesh Rao
(Expert) 06 November 2009
Thanks for the comments of Sri Singh. I forgot to mention that even if the Non-Payment of required stamp duty or deficit stamp duty is not noticed till the disposal of the case, it will not invalidate the decree but the duty and penalty can be recovered as if they were the arrears of land revenue.
