Validity Of Unstamped Agreement
However, the Supreme Court held that the doctrine of harmonious construction should be interpreted as such that section 11(13) of the act must be read with paragraphs 33 and 34 of the Stamps Act (which provide for the thawing of unstamped instruments). The Supreme Court went further to define a mechanism that courts and stamp authorities must follow when the underlying agreement is stamped: the Supreme Court overturned the decision of the Bombay High Court in Gautam Landscapes Private Ltd. and Ors v. Shailesh S. Shah and Ors with respect to the decision on an application under Section 11 of an unsealed arbitration agreement. , and found that a high court required an unstamped or under-stamped arbitration agreement and was handed over to the decision-making authority to rule as quickly as possible on stamp tax and penalty issues. In addition, Section 16 of the Act authorized the Court of Arbitration to determine the validity and existence of an arbitration provision and the Arbitral Tribunal could make the mandatory provisions of the stamp law effective. This has been further cemented by the Supreme Court by declaring that an agreement becomes a contract only if it becomes enforceable under the law, and under the Indian Stamp Act, an agreement will not be legally applicable if it is not stamped or insufficiently labelled. Therefore, a compromise clause contained in such an agreement would not exist if it is not applicable. However, Section 35 of the Indian Stamp Act, 1899 (Act), prohibited courts from receiving in evidence unstamped or under-stamped documents unless they were corrected by the seizure and payment of defective fees and penalties.
The Supreme Court has decided that the provisions of the law on the protection of revenue and therefore of the mandatory and therefore mandatory and lack of stamp duty affects the compromise clause and cannot take effect, unless corrected at the beginning. In the case where an arbitral tribunal has been formed without judicial intervention, the arbitrator is responsible for seizing the document and implementing the mandatory provision of the act. As lawyers, we are often asked whether agreements that are not made on stamp paper are invalid and unenforceable. The answer is a simple «NO.» Agreements can be made either on a stamp paper or in a non-buffer document. While agreement has been reached on a document without stamps, certain legal aspects must be respected. This article establishes the validity of unstamped agreements and delves into the legal and technical consequences of unmarked agreements. The Supreme Court referred to its earlier decision in SMS Tea Estates v. Chandmari Tea Co. P. Ltd.,2 in ruling that if a compromise clause is contained in an unstamped agreement, the judge would be required to enter the agreement and ensure that stamp duty and penalty (if any) are paid before the arbitrator is appointed. In this case, karnataka HC, while dealing with the validity of unstamped and stamped instruments, has established that if the original document is stamped or not and a copy of it is brought to court, the same is not possible, even under section 35 of the act.