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S.Karthick (Student)     29 January 2010

What is the consequence of Understamping of Loan Agreements

What is the consequence of Understamping of Loan Agreements for Vehicle Loan ?


 10 Replies

R.R. KRISHNAA (Legal Manager)     29 January 2010

It follows no consequences.  It is not mandatory to properly stamp the loan agreement for movable properties.  The deficiency in stamps can be rectified by paying the deficit amount along with penalty.

S.Karthick (Student)     29 January 2010

1.what is the Penalty if so?

2.If the document is not at all stamped what will be the consequences ?

Pls let me know.


R.R. KRISHNAA (Legal Manager)     29 January 2010

Amount of penalty differs from state to state.


If the document is not at all stamped, even then penalty can be levied later.

Daksh (Student)     29 January 2010

Dear S Karthik,

If in case the Loan Agreement is not stamped the deficiency of stamp can be cured subsequently as well. 

Best Regards


aruntrivedi (lawyer)     29 January 2010

inadequate stamp on any document looses its legal value and it become null and void not enforceable.


Mr.Arun Trivedi, can you please cite any judgment(s) for the benefit of all our LCI members ... that legally struck down an insufficiently stamped document ?

aruntrivedi (lawyer)     30 January 2010

so many are there

Section 28(2) in The Co- Operative Societies Act, 1912 [ "Section 28" ] [ "Complete Act" ]

society or class of registered society, remit-- (a) the stamp- duty with which, under any law for the time being ... section 28, so far as it relates to the stamp- duties specified in the second paragraph thereof, has been repealed
Central Government Act

Section 80 in The Companies Act, 1956 [ "Complete Act" ]

shares shall not, so far as relates to stamp duty, be deemed to have been issued in pursuance of this
Central Government Act

Kothari Industrial Corporation ... vs Lazor Detergents Private Ltd. And ... on 28 July, 1994

Securities Contracts (Regulation) Act, prescribing stamp duty for any instrument. The only enactment which prescribes stamp duty for instruments referred ... Indian Stamp Act. In order to find out the stamp duty, one has to refer to the provisions

Niagara Hotels & Builders (P) Ltd. vs Union Of India And Ors. on 22 November, 1996

been collected and charged from the plaintiff towards Stamp Duty under the Indian Stamp Act, 1899, and towards duty ... above said plot in favour of the plaintiff : (a) Stamp Duty : 4,35,735.00 (b) Duty on transfer of property

In Re: Glofame Cotspin Industries ... vs Unknown on 15 April, 2005

affidavit. The transferee-company has undertaken to pay stamp duty as per the final adjudication in the said appeal subject ... anybody claiming exemption from payment of requisite stamp duty. Effect was given subject to the outcome of the adjudication

Section 80C in The Income- Tax Act, 1995 [ "Complete Act" ]

affiliated to such university or a local authority; (d) stamp duty, registration fee and other expenses for the purpose
Central Government Act

Income-Tax Officer vs A.C. Mathiah on 31 January, 1986

Indira Nagar, Bangalore addressed to Shri Ramanathan enclosing the stamped paper along with instalment details duly signed by Mrs. Fordye ... manage the suit properties. As part of their duties the receivers carried on the various businesses which A had carried

Section 51 in The Land Acquisition Act, 1894 [ "Complete Act" ]

Exemption from stamp duty and fees.- No award or agreement made under this Act shall be chargeable with stamp duty
Central Government Act

Western Coalfields Ltd. And Ors. vs State Of M.P. And Anr. on 18 July, 2006

Govt. Company is liable to make the payment of stamp duty on a notification issued Under Section ... pointed out that question of payment of stamp duty does not arise. Reliance was placed on letter (P/9) issued

Indushekar B.S. And Ors. vs The Special Land Acquisition ... on 6 October, 2001

Registration Department for purposes of collection of stamp duty. He argues that in Karnataka the estimation of market value ... Valuation Register was maintained for the purpose of collecting stamp duty under Section 47A of the Indian Stamp

P. Ram Reddy vs Land Acquisition Officer, ... on 19 April, 1993

documents for the lowest possible amounts to avoid stamp duty. At certain times for obtaining loans from the banks ... Stamps deposed that for the determination of the stamp duty and registration in respect of documents, the basic value register

Article 269(1) in The Constitution Of India 1949 [ "Article 269" ] [ Constitution ]

succession to property other than agricultural land; (b) estate duty in respect of property other than agricultural land; (c) terminal ... railway fares and freights; (e) taxes other than stamp duties on transactions in stock exchanges and futures markets; (f) taxes
Central Government Act

S. Ananthakrishnan vs The State Of Madras on 19 October, 1951

persons shall have paid in respect of enrolment the stamp duty, if any under the Indian, Stamp ... petitioner's counsel contended that the payment of the stamp duty cannot be said to be a qualification necessary

Section 88(2) in The Income- Tax Act, 1995 [ "Section 88" ] [ "Complete Act" ]

local authority 1[ or a co- operative society]; (d) stamp duty, registration fee and other expenses for the purpose
Central Government Act

L.H. Sugar Factory vs Moti on 24 March, 1941

within exemption (a) of Article 5 which exempts from stamp duty : "Agreement or memorandum of agreement for or relating ... within the 'exemptions' and he will have to pay stamp duty only on the latter instrument. But if he joins
Allahabad High Court
- Cites 29 - Cited by 4 -
AIR 1941 All 243
- I Ahmad

Gorva Vibhag Co-Operative ... vs State Of Gujarat And Ors. on 5 May, 1992

provided that the Stamp Duty on conveyance is to be charged on the basis of the consideration for such conveyance ... Stamp Act would prevail because different heads for which stamp duty can be recovered are provided in Schedule
Gujarat High Court
- Cites 40 - Cited by 3 -
(1992) 1 GLR 654
- M Shah

Naveen Gun House And Ors. vs Union Of India (Uoi) And Ors. on 13 December, 2002

mandamus directing the respondents not to realize the stamp duty on the basis of the amendment made in the Indian ... petitioners forthwith, without compelling them to deposit stamp duty on renewal of their licence. 2. The State Legislature has amended
Allahabad High Court
- Cites 29 - Cited by 3 -
AIR 2003 All 187
- N Mehrotra

Subramaniam Chettiar vs Revenue Divisional Officer And ... on 8 March, 1956

Collector of Ramnad at Madurai, with certain modifications, levying stamp duty and penalty on two bonds from Subramanian Chettiar ... sent to the Collector for levying the appropriate stamp duty and penalty. The learned Subordinate Judge impounded those documents under
Chennai High Court
- Cites 8 - Cited by 2 -
AIR 1956 Mad 454
- P Ayyar

Attached File : 46 46 inadequate stamp duty judgments.doc downloaded: 125 times

S.Karthick (Student)     08 February 2010

Dear Aruntrivedi sir,

As per the infomation provided,

whether agreement entered by a customer & A financial institution (providing vechile loan) is stamped without Proper stamping is NULL & VOID ?

Under whose favoue will the judgement prevail ? pls clarify.

Warm regards


Kumar Ankit (Student)     15 November 2010

Can someone please tell me if a loan agreement , of a loan to be given between to related private companies based in AP and Maharashtra needs a stamp duty? If yes, then what will be the value of the stamp duty in such case. 

yuvnesh subramanian (LEGAL CONSULTANT)     10 April 2012

Hello sirs,

I have some doubts in stamping of agreement pl guide me.

1. Agreement signed on 01-04-2012 but stamping /stamp paper purchased on 10-04-2012? whether it is valid ? any risk in executing the same agreement in the furutre litigation?

2.stamping done on 01-04-2012 agreement signed on 10-04-2012?

A person who borrows loan by way of executing the above agreement whether any problem will arise?

pl advice me ...



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