GOKULDAS KAMATH (EX BANKER) 29 October 2021

Old dated loan agreement in a newly purchased stamp paper

I am working for a Chennai based NBFC. A borrower was required to execute an additional loan agreement for restructure of his loan account .The draft of agreement is dated 22.10.2021 and it needs to be got executed .on a stamp paper. Borrower purchased e stamp paper on 29.10.2021 in which agreement dated 22.10.2021 was typed

Kindly clarify whether old dated loan agreement on a new stamp paper of later date is valid

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Quick Summary

This discussion explores the validity of a loan agreement dated prior to the purchase of the stamp paper it's printed on. While one perspective cites Stamp Rules, 1925, as invalidating such agreements, another argues for their validity as a record of a prior mutual understanding between parties, later formalised for legal enforcement.

2 Replies

kavksatyanarayana (subregistrar/supdt.(retired)) 29 October 2021

No. It is contrary to Rule 6 (2) of Stamp Rules, 1925.

Anand Bali Adv. (Advocate Solicitor & Consultant) 30 October 2021

Yes, it can be done. as both the parties are only giving a legal enforcement to an agreement to which they arried mutually few days ago. As in your case the draft of the agreement for a loan was made first with a mutual understatnding and then further to give it a legan enforecment on an understanding of agreement is has been executed on a Stamp paper lateron, thus making it as a CONTRACT between two parties.