If an agreement or document is found not to be properly stamped, section 35 of the Indian Stamp Act prohibits the document from being processed by a public official or a court. The document must be seized and subsequently processed in accordance with section 33 or 38 of the Indian Stamp Act. If you wish to file an unstamped document as evidence in court, you must stamp the document and pay the late stamp penalty to the Inland Revenue Board (LHDN). In accordance with section 47 of the Stamp Act 1949, any unstamped document drawn or produced in Malaysia may be stamped after execution against payment of the unpaid fee if the document is presented for stamping within THIRTY (30) DAYS of its execution, if issued in Malaysia, or within thirty days after its first receipt in Malaysia, if it was issued outside Malaysia. The Contracts Act does not make the stamp of agreements compulsory. It does not invalidate or execute an unstamped agreement/contract. Therefore, an agreement does not require a mandatory stamp to make it a legal and valid instrument. For a secure agreement and contract, the same must be done in writing about the reasonable value of the stamp document, as required in the State where it is performed, and the same must be attested by at least two witnesses and preferably certified by a notary, so that the same can be more authentic, since the notarized certificate carries sanctity to the same, which is accepted all over the world. It is also important to note that regardless of whether the agreements have been stamped or not, this does not change the nature of the illegal agreements (Ong Thean Chye & Ors v. Tiew Choy Chai & Anor).
Another recent and similar case, the High Court in CIMB Bank Berhad v. Vacation Asia (MY) Sdn Bhd & Ors has ruled that not stamping the offer letter is not a triviable issue as it does not affect the root or validity of the document itself. The Supreme Court has held that a court must consider all relevant factors before admitting or responding to a contract as evidence. The contract must be checked to ensure that it has been properly stamped. Under section 35 of the Stamp Act, if it is found that the contract is not properly stamped, the court may not be able to respond to the contract submitted. Consequently, despite the idea of severability of the clause, the arbitration clause cannot be applied, since the entire contract must be taken into account for the calculation of stamp duty. The court may recognize the contract as validly covered only if the stamp duty on the deficit and the penalty are paid either by the court or before the collector in accordance with the method provided for in section 35 or 40 of the Stamp Law and if the defect in respect of the deficit stamp is remedied. As we all know, it is important to have a written contract to ensure that the terms of an agreement are documented as part of transactions. We will feel safe in the event of disputes arising from this contract to protect our rights and interests. However, would the agreement still be enforceable if it were not stamped? Would it still be acceptable to avoid paying stamp duty to save money? The Supreme Court overturned the decision of the Mumbai High Court in Gautam Landscapes Private Ltd. and Ors v. Shailesh S.
Shah and Ors, who noted that a high court must ex officio seize an arbitration agreement that is not stamped or insufficiently stamped and send it to the competent authority in order to resolve stamp duty and criminal matters as quickly as possible. In S.B.P. & Co. v. Patel Engineering Ltd. and Anr. , the Supreme Court held that courts were empowered to “consider the application for the existence of an arbitration agreement, the existence of a pending claim, the existence of a condition for the exercise of its authority and the powers of the arbitrator or arbitrators”. The Indian Stamp Act of 1899 (or similar state laws) is primarily intended to generate revenue for the government; These documents are admissible as evidence. Although the court exercises its powers under section 11 of the Arbitration and Conciliation (Amendment) Act 2015, the inadequacy of the payment of the stamp is not examined, as the narrow scope of the provision only allows it to consider prima facie the existence of an arbitration agreement. The economy of each country is based on agreements and contracts in which two parties agree on certain express conditions, which are defined in black and white and become binding as soon as they are signed by both parties involved. Agreements that are the soul and heart of companies must be legally enforceable.
They are legally enforceable if they comply with the provisions of the Indian Stamp Act, 1899 in conjunction with the Registration Act, 1908. Therefore, they should be properly stamped to be valid in the eyes of the law. The said agreement should insist on a SR. 100 Stamped paper which must be duly certified and stamped by the notary. You must make the agreement in an amicable stamp document and notarize it. The High Court in North Western Services v. Chan Yin Leng & Anor. In sum, the appellants argued that the unstamped investment contract was inadmissible. The respondent argued that the Defs themselves had refused to stamp the agreements. The Indian Registration Act provides for the registration of documents, which records the contents of the document. Registration is required to maintain records and titles.
Certain agreements referred to in section 17 of the Indian Registration Act must be registered and therefore cannot be entered into without stamped paper. Some of these are, section 11(6A) of the A&C Act – The Supreme Court or, as the case may be, the High Court is limited to reviewing the existence of an arbitration agreement when considering an application under subsection (4) or subsection (5) or subsection (6), notwithstanding any judgment, order or order of a court. In summary, in court, for the unstamped agreement to be admissible, the court will order the parties to stamp the agreement first, but this is not an issue that can be judged. Although the rights of the party in an unstamped agreement are not affected, unless the agreement itself is not authentic or consists of the element of fraud from the beginning. Therefore, an unstamped agreement is considered valid in Malaysia. An unsigned agreement on the required stamped paper may be admissible under Section 35 of the Indian Stamp Act of 1899 (Thiruvengada Pillai v Navaneethammal & Anr) as proof of payment of duties and penalties equivalent to ten times the stamp duty.