It does not matter much whether an agreement is printed on a letter head of the company, on a plain simple paper or on a stamp paper. What is important is whether proper stamp duty has been paid. If proper stamp duty has been paid on such agreement, then it does not make much difference even if such agreement is printed on the letter head of the company.
There is an Act called the Indian Stamp Act, 1899. Section 17 of this Act lays down that “All instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution”.
In Section 2(14) of this Act Instrument has been defined to include “every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded”.
This is an Act which is supposed to have been made by the Parliament under its power of legislation under Entry 44 of the Concurrent List in the Seventh Schedule to the Constitution.
Entry 91 of the Union List in the Seventh Schedule to the Constitution, power has been given to the Union to fix “Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts”.
Power with regard to rates of stamp duty in respect of documents other than those specified above in the provisions of the Union List has been given to the States vide Entry 63 of the State List in the Seventh Schedule.
Article 268 of the Constitution lays down that even those stamp duties, which are included in the Union List, shall be levied by the Central Government, but these shall be collected by the States within their areas, and the duties so collected shall be assigned to the states wherein they have been collected.
Now, various States have enacted their own Stamp Acts for their own respective areas (by way of amendment / repeal of the aforesaid Indian Stamp Act, 1899, in accordance with the provisions of the Constitution), and stamp duty rates have been fixed. These rates fixed by the respective states may have to be consulted and the stamp duty has to be paid accordingly on an agreement as per the prescribed rate. Once such stamp duty has been paid, it does not matter much how such agreement is printed.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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