Jojy George Koduvath.

Introspection

• Can an unstamped or insufficiently stamped document be stamped subsequent-to-its-execution?
  • Answer: Yes, under Sec. 31 of the Indian Stamp Act.
• What is the time-limit prescribed for adjudication, without being fined (or impounded)?
  • Answer: Within one month (if executed in India); and
  • three months (of receiving it in India, if executed out of India), under Sec. 32 of the Indian Stamp Act.
• What is the effect of not adjudicating the document within the time allowed?
  • Answer: The document will be impounded (seized for levying the penalty), under Sec. 33 of the Indian Stamp Act.

The Relevant provisions of the Stamp Act can be summarised as under:

Read Blog: Adjudication as to Proper Stamp under Stamp Act

Sec. 31, 32 and 33 Stamp Act Analysed

• 1. Any person can apply for ‘adjudication’ by Collector. (See: Gujarat Ambuja Cements Limited (Ambuja Cements Limited) v. State of Chhattisgarh (2018).
• 2. Adjudication can be sought for even after the expiry of one month from the date of its execution (or three months of receipt in India, if executed outside India).
• 3.  If the holder of the document pays the penalty (on its impounding), the document will be treated as a sufficiently stamped document.

• 4. Effect of Limitation Prescribed Under Proviso to Sect. 32:
  • (i) Under Sec. 32, if the instrument is brought to the Collector within one month of its execution (or three months, as stated above), the Collector has to endorse the certificate, on payment of the deficit duty, if any; but, without levying any penalty.
  • (ii) What is ‘not authorised’, in Sec. 32 Proviso, is that “in this section“; that is, the endorsement under Section 32 – without imposing any penalty and impounding.
    • (Note: This interdiction will not affect grant of certificate even after the stipulated time, if the document is sufficiently stamped, as shown below).
  • (iii) The question of proceeding against a document for levying penalty or impounding comes only if it is
    • (i) produced after the time limit prescribed
    • and
    • (ii) insufficiently stamped (because, for impounding and imposing penalty, the collector has to invoke Sec. 33; it is not done under Sec. 32).
• 5.  The Collector has to grant the certificate as to proper stamp even if the document is produced after one month (or three months, as stated above) if the document is a sufficiently stamped document (without imposing any penalty)-
• because,
  • if only the document is an insufficiently stamped one, then only the question of levying penalty or impounding comes for consideration (even under Sec. 33);
  • no time limit for applying adjudication under Sec. 31; and
  • (as already stated) the interdiction (‘not authorised’) in Sec. 32 Proviso, is as to making the endorsement under Section 32 – without imposing any penalty and impounding – for, the proviso speaks as to the actions “in this section” alone.

The afore-stated propositions are explained in the following decisions-

Relying on Government of Uttar Pradesh v. Raja Mohammed Amir Ahmad Khan, AIR 1961 SC 787, The Secretary to Government v. The Gwalior Rayon Silk, 1971 Ker LJ 309] and Sethuraman v. Ramanathan, AIR (33) 1946 Mad 437, it is held in  M.P. Rajeswaran Nair vs The District Collector, 2009 (3) Ker LT 56, as under:

• “ … if an executed instrument is produced before the Collector under Section 31, within one month, even if the Collector finds that the instrument is insufficiently stamped, the  instrument would not attract penalty, and the Collector shall make the endorsement under Section 32, if the party pays the deficit stamp
• whereas if it is produced after one month, it would, and the Collector cannot make the endorsement which is the effect of the limitation prescribed under the proviso to Section 32, instead the Collector has to, after adjudication of the proper stamp, proceed either under Sections 33 and 39 read with Section 41 or under Section 40 read with Section 41.”
• Also see: Ambat Aboobacker v. District Collector (2012, Kerala High Court)
• Wilson and Company Private Limited v. K. S. Lokavinayagam, AIR  1992 Mad 100, (A. R. Lakshmanan, J.)

In Sethuraman Chettiar v. Ramanathan Chettiar, AIR 1946 Mad 437, it is held as under:

• “It cannot be said that Sections 31 and 32 contained in Chapter III form one integrated procedure for adjudication to stamps and that the limit referred to in proviso (a) to Section 32 governs applications made under Section 31. Section 31 provides no time limit for an application to the Collector for adjudication as to the proper stamp duty payable in respect of an instrument. There is nothing in the section to prevent a person from resorting to the Collector for an adjudication as to the proper stamp even after the expiry of one month from the date of its execution. If the instrument is brought to the Collector within one month of its execution, the applicant would be entitled to have the Collector’s certificate endorsed on the instrument on payment of the deficit duty, if any, but without having to pay any penalty. But if he seeks the Collector’s adjudication beyond the limit specified in Section 32. The Collector has, under Section 33, to impound the instrument and proceed under Section 40 to decide whether the instrument is duly stamped and to require the payment of the additional duty chargeable in respect of the instrument together with the prescribed penalty in case he is of opinion that it is not duly stamped. On payment of such duty and penalty, a certificate that the proper duty and penalty have been paid has to be endorsed under Section 42 on the instrument which becomes thereupon admissible in evidence and may be acted upon as if it had been duly stamped” (Quoted in: A. Karuppanna Pillai v. Nallathambi, 2000-3 CCC 35, 2000-1 CTC 341.)

Read Blogs:

• Time Limit for Registration of Documents
• LAW ON INSUFFICIENTLY STAMPED DOCUMENTS 
• Registration of Documents Executed out of India
• Unstamped & Unregistered Documents and Collateral Purpose
• Impounding of Documents, When Produced; Cannot Wait Till it is Exhibited
• No Adjudication Needed If Power of Attorney is Sufficiently Stamped
• Notary Attested Power-of-Attorney Sufficient for Registration
• Presumptions on Registered Documents & Collateral Purpose

Provisions of the Indian Stamp Act

Sec. 31-

• “31. Adjudication as to proper stamp.
• (1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than [fifty naye paise]) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable.
• (2) For this purpose the Collector may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove that all the facts and circumstances affecting the chargeability of the instrument with duty, or the amount of the duty with which it is chargeable, are fully and truly set forth therein, and may refuse to proceed upon any such application until such abstract and evidence have been furnished accordingly:
• Provided that–
• (a) no evidence furnished in pursuance of this section shall be used against any person in any civil proceeding, except in an inquiry as to the duty with which the instrument to which it relates is chargeable; and
• (b) every person by whom any such evidence is furnished, shall, on payment of the full duty with which the instrument to which it relates, is chargeable, be relieved from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.”

Sec. 32

• 32. Certificate by Collector—
• (1) When an instrument brought to the Collector under section 31 is, in his opinion, one of a description chargeable with duty, and—
• (a) the Collector determines that it is already fully stamped, or
• (b) the duty determined by the Collector under section 31, or such a sum as, with the duty already paid in respect of the instrument, is equal to the duty so determined, has been paid, the Collector shall certify by endorsement on such instrument that the full duty (stating the amount) with which it is chargeable has been paid.
• (2) When such instrument is, in his opinion, not chargeable with duty, the Collector shall certify in manner aforesaid that such instrument is not so chargeable.
• (3) Any instrument upon which an endorsement has been made under this section, shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duty, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it had been originally duly stamped:
• Provided that nothing in this section shall authorise the Collector to endorse—
• (a) any instrument executed or first executed in  [India] and brought to him after the expiration of one month from the date of its execution or first execution, as the case may be;
• (b) any instrument executed or first executed out of [India] and brought to him after the expiration of three months after it has been first received in [India]; or
• (c) any instrument chargeable [with a duty not exceeding ten naye paise], or any bill of exchange or promissory note, when brought to him, after the drawing or execution thereof, on paper not duly stamped.

Sec. 33

• 33. Examination and impounding of instruments.
• (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police or any other officer empowered by law to investigate offences], before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
• (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the Union territory of Jammu and Kashmir when such instrument was executed or first executed:
• Provided that––
• (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter IX or Part D of Chapter X of the Code of Criminal Procedure, 1973 (2 of 1974) ;
• (b) in the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
• (3) For the purposes of this section, in case of doubt, the Government of the Union territory of Jammu and Kashmir may determine what offices should be public offices and who shall be deemed to be persons in charge of such public offices.
• (4) Where a person referred to in sub-section (1), during the course of inspection or otherwise, detects from an instrument or copy thereof that the instrument is not duly stamped, such person shall forthwith make a reference to the Collector in the matter.
• (5) The Collector may, either suo motu or on a reference, call for the original instrument for ascertaining whether it is duly stamped and the instrument so produced shall be deemed to have been produced or come before him in the performance of his functions, and in case the original instrument is not produced within the period specified by the Collector, he may require the payment of the proper duty or the amount required to make up the same together with the penalty under section 40 from the person liable to pay the duty.