Unstamped agreement is not legally enforceable

In India, an unstamped agreement is generally not enforceable in a court of law. This principle is rooted in the Indian Stamp Act, 1899, which requires certain documents to be duly stamped. If a document is not properly stamped, it cannot be admitted as evidence in court for any purpose.

One key case law that illustrates this principle is “Avinash Kumar Chauhan v. Vijay Krishna Mishra” (2009). In this case, the Supreme Court of India held that an unstamped document cannot be admitted as evidence, and if a party seeks to rely on such a document, it must be duly stamped as per the provisions of the Indian Stamp Act.

Avinash Kumar Chauhan v. Vijay Krishna Mishra (2009) 2 SCC 532

Facts:

The case involved a dispute over an agreement that was unstamped. The trial court refused to admit the document as evidence due to its unstamped nature. The matter eventually reached the Supreme Court.

Judgment:

The Supreme Court held that an unstamped or insufficiently stamped document is not admissible in evidence for any purpose unless it is duly stamped and penalty, if any, is paid as per the provisions of the Indian Stamp Act. The Court emphasized that the requirement of stamping is mandatory and non-compliance results in the document being inadmissible.

Key Points:

1. Mandatory Stamping: An agreement or document that requires stamping must be duly stamped to be enforceable.

2. Admissibility: An unstamped document cannot be admitted as evidence in a court of law.

3. Payment of Duty and Penalty: If an unstamped document is sought to be admitted, it can only be done after paying the required stamp duty along with any applicable penalty.

This case law reinforces the importance of complying with the stamping requirements under the Indian Stamp Act for the enforceability of agreements and documents in legal proceedings.