Section 35, Indian Stamp Act — Why an Unstamped Agreement Cannot Be Used

What the section does

• 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.
• The section does not make the instrument void. The contract remains valid; what is lost is the ability to prove it in a proceeding.
• The proviso allows the instrument to be admitted on payment of the deficient duty together with a penalty, which may extend to ten times the amount of the shortfall.
• A seven-judge bench of the Supreme Court held in December 2023 that non-stamping is a curable defect rendering an agreement inadmissible rather than void or unenforceable.

Penalty on curing

Up to 10× the deficient duty. Payable with the shortfall itself, which is why stamping at execution is far cheaper.

Where people go wrong

• Believing the contract is void. It is valid and merely inadmissible until cured.
• Applying another state’s rate. Stamp duty on most instruments is levied by the states and differs between them.
• Curing it on the morning of a hearing. The impounding and penalty process takes time the proceeding may not allow.
• Keeping only a photocopy. Admissibility arguments attach to the original instrument.

Common questions

Is an unstamped agreement valid in India?

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. It is valid and unusable at the same time.

Can an unstamped document be stamped later?

Yes. The proviso to section 35 allows admission on payment of the deficient duty and a penalty of up to ten times the shortfall. Section 17 contemplates stamping before or at execution, which is considerably cheaper.

Does non-stamping make an arbitration agreement void?

No. A seven-judge bench of the Supreme Court held in December 2023 that non-stamping is a curable defect making the agreement inadmissible rather than void or unenforceable, departing from the earlier position in N.N. Global.

Act on this

• Is an unstamped agreement valid?
• All document templates

• Is an unstamped agreement valid?
• All document templates

About this summary

A plain-English summary of what this provision requires, not a reproduction of it and not legal advice. Read alongside the bare Act, and take advice on anything turning on your own facts.