Whether the Promissory Note which is
not adequately stamped us admitted in evidence?
The Indian Stamp Act has spell out what are the documents
which are admitted as evidence though insufficiently stamped. Section 35 of the
Act deals with this situation. There are certain documents if insufficiently
stamped which are not admitted in evidence and another category of
insufficiently stamped documents which are admitted in evidence on payment of
penalty.The following documents if not
sufficiently stamped are not admitted in evidence, even on payment of penalty:
- Promissory note.
- Bill of Exchange.
However, it is clarified that an insufficiently stamped promissory note executed as collateral
security cannot be accepted in evidence whereas some other evidence can be adduced to prove oral agreement in respect of
the debt.
Who is to decide the proper stamp
duty on any instrument in case of any doubts?
Stamps Acts of various State Governments and Central
Government provide the stamp duty payable on documents. In case of any doubt
the concerned party may approach the Collector or the District Registrar and
apply for deciding the correct stamp duty payable on the instrument, on payment
of certain fees/charges.
The
Collector or the District Registrar may call for the abstract of the instrument
and also evidence to prove that all the circumstances and facts are correctly
set forth in the instrument, and accordingly the Collector there of will decide
the correct stamp duty payable and on payment of duty or any shortfall, shall
certify to that effect. Such person need not pay any penalty or fine. If the
document does not attract any stamp duty, he shall certify accordingly.
Can document be stamped after signed by the
parties?
No, cannot be. All the documents need to be stamped and
cancelled at the time of execution. Execution means the process of affixing the
signature on the document. Adhesive stamps including revenue stamps should also
be cancelled by the party’s signature across the face of the stamp evidencing
that the stamp/s were cancelled at the time of execution of the document. Documents which are to be franked should not
bear the date of execution and signature of the parties. The documents are to
be dated at the time of franking and the parties have to execute the document
after they are franked.
If an instrument is under-stamped by
accident or ignorance of the parties, can it be rectified? If so, what is the procedure ?
Yes. There is provision to rectify the mistake. Section 41 of Indian Stamp Act, and Section
40 of the Karnataka Stamp act provide for such situation. The time limit is one year from the date of
execution. But this relief is not
applicable for Promissory note and Bill of Exchange. The concerned parties on
his own may produce the document, may bring it, to the notice of the Collector
or District Registrar the fact that the instrument is under-stamped and agrees
to pay the amount of the shortfall. If the Collector or the District Registraris satisfied that the instrument is under-stamped by accident, mistake or
urgent necessity he may permit the party to pay the correct stamp duty and
shall certify to that effect.
Section 41 of the Act says: Instruments unduly stamped by accident.-
If any instrument chargeable with duty and not duly stamped, not being an
instrument chargeable [with a duty not exceeding
ten naye paise] only or a bill of exchange or promissory note, is produced by any
person of his own motion before the Collector within one year from the date of
its execution or first execution, and such person brings to the notice of the
Collector the fact that such instrument is not duly stamped and offers to pay the Collector the amount of the
property stamp duty, or the amount required to make up the same, and if the
Collector is satisfied that the omission to pay such stamp duty on such
instrument has been occasioned either by accident, mistake or urgent necessity,
the Collector may instead of proceeding under Sections 33 and 40, receive such
amount and proceed as per Section 42 – Endorsement of instruments in which duty
has been paid under Section/s 35, 40 or 41.
Can a document presented for registration be taken
back ?
Yes. Any document presented for registration
may be withdrawn before the process is completed that is before
certification. The parties may also
apply for refund of stamp duty and registration charges, where the full stamp
duty and 50% of registration charges are refunded depending upon the
circumstances.
What is the stamp duty payable on exchange of
properties ?
Exchange of Property is a recognized mode of conveyance of property, where two
properties are exchanged with consent. The stamp duty is payable on the market
value of the property, whichever is higher, of two properties involved.
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