03
VALIDITY OF STAMP PAPER[1]
The Hon’ble Supreme Court of India in Thiruvengada Pillai Vs. Navaneethammal & Anr., 2008 held that a stamp paper can be used validly even if it is more than six months old. The Supreme Court upheld the decision of the High Court by doubting the genuineness of the sale agreement between the parties and concluded that it was illegal to use stamp papers purchased on different dates for execution of a document. As the stamp papers used in the agreement of sale were more than six months old, they were not valid stamp papers and consequently, the agreement prepared on such ‘expired’ papers was also not valid. As per the Indian Stamp Act, 1899, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.
Following are the uses of an old stamp paper:
- Use it for a new agreement, but the purpose must be the same for which you purchased it.
- Deposit back to Collector to get a substantial refund after satisfying that:
- purchase was made with a bonafide intention to use,
- full price of the stamp was paid,
- and they were purchased within three months before the date of depositing. (Section 54 of the Indian Stamp Act)
The amount is refunded after a deduction of 10 paise per rupee.
Spoilt Stamp Papers:
A document not executed by a material party, stamp on any paper inadvertently and undesignedly spoiled, obliterated or rendered unfit, deficient stamp are considered spoilt stamps. Section 49 of the Indian Stamp Act, 1899, provides an exhaustive list of spoilt stamps and makes a provision for their allowance by the Collector. An application under Section 50 of the Indian Stamp Act, 1899, for seeking a refund under section 49 can be made within:
- two months of the date of an executed instrument where one party refuses to act,
- six months after the stamp has been spoiled, where no instrument has been executed by any party on a stamped paper, and
- six months after the date of the instrument, where an instrument has been executed on a stamped paper. (In the case of Vimal Kumar Saigal v. The Office of Collector of Stamps, 2016 (judgement dated 16 January 2020), the Court permitted refund of stamp duty under section 49(d)(8) of beyond six months of the stamp being spoilt.)
Case Laws:
- Moideen Koya v. Parakulambil Kadeejakutty and Ors., O.P.(C). No. 1716 of 2015, Decided on: 17.07.2015
The original petition was filed by the plaintiff challenging the order of the Sub Court returning the plaint for non-payment of Court Fee. The suit was filed on 22-6-2015 with Court Fee Stamp for ‘300 purchased on 5-3-2015’. The Court took the view that stamps purchased prior to 6 months from the date of use could not be made use of for the payment of Court Fee.
- Vimal Kumar Saigal v. The Office of Collector of Stamps, W.P. (C) 9699/2016, Decided on: 16.01.2020
The Court permitted refund of stamp duty under section 49(d)(8) of beyond six months of the stamp being spoilt.
- P.C. Jain Textile Pvt. Ltd v. State of Haryana, CWP No. 1016 of 2013, Decided on: 12.01.2017
The petitioner argued that a belated claim must be allowed since the vendor delayed the matter and ultimately refused to sell his land. The High Court held that “the limitation provided for moving the application under Section 50(2) of the Act has a sanctity behind it which cannot be brushed aside making the provision redundant and nugatory.”
- Dr. Poornima Advani v. Government of Delhi, W.P.(C) No. 9014/2017, upheld in appeal in Government of NCT of Delhi v. Dr. Poornima Advani, 2019
The Delhi High Court permitted a refund of a lost stamp paper on the basis that the State cannot adopt the principle of retention and must not indulge in undue enrichment. However, Poornima Advani only dealt with whether the case of a lost stamp, not covered by section 49, is a spoilt stamp, and not the case of limitation under section 50.
[1] Conceived and penned by Manisha Jain, Associate and Rohit Anand Das, Partner