Contracts
Section 35 of the Indian Stamp Act does not void your contract. It stops a court from looking at it, which in a dispute amounts to the same thing until you cure it.
Check your DPDP readiness — free More on the blogThis is the question that arrives after the dispute has already started, which is the worst possible time to ask it. The answer has two halves and people usually only hear the frightening one.
An agreement that has not been stamped is still a contract. If it has offer, acceptance, consideration, competent parties and a lawful object, it is valid under the Indian Contract Act, 1872. Nothing in the Indian Stamp Act, 1899 says otherwise, and the common belief that an unstamped agreement is "not legal" is simply wrong.
Section 35 of the Indian Stamp Act says that an instrument chargeable with duty is not to be admitted in evidence for any purpose, nor acted upon, registered or authenticated, unless it is duly stamped. So the contract exists and you cannot prove it. In a dispute where the written terms are the whole of your case, that distinction stops being academic very quickly. The agreement is not destroyed. It is made unusable until you pay what you should have paid.
The proviso to section 35 lets the document be admitted on payment of the deficient duty together with a penalty. The penalty can run to ten times the shortfall. That is the design: stamping is cheap in advance and punitive afterwards, which is exactly the incentive the statute intends to create. Section 17 requires instruments executed in India to be stamped before or at the time of execution. Stamping afterwards is not the ordinary path; it is the remedial one.
Stamp duty on most instruments is a State subject, so the rate on the same agreement differs between Maharashtra, Karnataka, Delhi and West Bengal, and a figure someone quotes you from another state is not a figure you can rely on. Some instruments carry a fixed duty and others are charged on value. Every document drafted on this site states the stamp position that applies to it rather than leaving you to discover it later — see the document library.
For arbitration agreements this had become genuinely uncertain. A five-judge bench in N.N. Global held that an unstamped arbitration agreement was unenforceable, which threatened a large number of contracts. A seven-judge bench revisited it in December 2023 in the Interplay reference and held that non-stamping is a curable defect that renders an agreement inadmissible rather than void or unenforceable, and that the objection is for the arbitral tribunal rather than the referral court. The direction of that ruling is the point of this article: insufficient stamping is a procedural problem to be fixed, not an event that destroys the bargain.
The related trap is an agreement that is stamped correctly and then never signed by one side, or signed by somebody without authority. A board resolution is what fixes the authority half of that.
The agreement is valid as a contract, but section 35 of the Indian Stamp Act, 1899 prevents a court from admitting it in evidence or acting upon it until the duty is paid. So it is valid and unusable at the same time: the contract exists, and you cannot prove it in a proceeding until the defect is cured.
Yes. The proviso to section 35 allows an insufficiently stamped instrument to be admitted on payment of the deficient duty plus a penalty, which can be up to ten times the shortfall. Stamping at execution, as section 17 contemplates, is far cheaper than curing it afterwards.
No. A seven-judge bench of the Supreme Court held in December 2023, in the Interplay reference, that non-stamping is a curable defect making the agreement inadmissible rather than void or unenforceable, and that the objection falls to the arbitral tribunal rather than the referral court. That decision departed from the earlier position in N.N. Global.
No. Stamp duty on most instruments is levied by the states, so the rate for the same agreement varies between them, and some instruments attract a fixed duty while others are charged on value. A rate quoted for one state is not reliable for another.
Published 31 August 2026. Founder & CEO at VidhiSar. I have watched four companies pay for the same mistake, and it was never the mistake anyone expected. VidhiSar is software, not a law firm: every answer names the section it relies on so you can check it, and anything turning on your specific facts is worth putting to a professional. More about who builds this
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