stamp paper means it seems getting governments nod (presumption) as third party to the lease agreement.
Yet on letter head means that falls under normal contract Act and yes you can go to the court for adjudication even just on letter head.
stamp paper is not a mandatory requirement provided on your letterhead if you have 2 wittnesses on executor and on acceptance side of lease. Witnesses not mandatory but preferable
people use stamp paper to keep awe on the document.
Different states have different revenue rates for non judicial stamp paper value and then if you want to register with registrar of stamps then you will end up paying some registration fees depending upon states !