Indian Stamp Act 1899 - The Legal Chamber

In this judgment, the Supreme Court clarified the distinction between a mortgage deed and a security bond for stamp duty under the Indian Stamp Act, 1899. The Court held that the substance of an instrument, not its nomenclature, determines its character. For Article 57 (security bond) to apply, a third-party surety distinct from the principal debtor must be involved. Since the deeds were executed by the principal debtors themselves to secure their own obligations, they were rightly classified as mortgage deeds chargeable under Article 40. Facts Of The Case: In Civil Appeal No. 7661 of 2014, M/s Godwin Construction Pvt. Ltd. executed a "Security Bond cum Mortgage Deed" on 19.12.2006 in favour of the Meerut Development Authority (MDA). This was done to secure performance of its oblig...

The Supreme Court ruled that an unregistered and unstamped sale agreement (dated 01.01.2000) could be admitted as evidence under the proviso to Section 49 of the Registration Act, 1908, in a specific performance suit. The Court clarified that such documents are permissible to prove collateral transactions or oral agreements, even if inadmissible for transferring title. It overturned the High Court's rejection, emphasizing that admissibility for limited purposes does not require stamping or registration. The judgment reaffirmed the precedent in S. Kaladevi v. V.R. Somasundaram (2010) 5 SCC 401, allowing unregistered documents as evidence in suits for specific performance or collateral claims. No costs were awarded. Facts Of The Case: The dispute arose from an agreement to sell dated 01.01...

Tag: Indian Stamp Act 1899

Supreme Court Judgment: When a “Security Bond” is Actually a Mortgage: A Landmark Stamp Duty Ruling

Supreme Court Allows Unregistered Sale Agreement: Permits Unregistered Document as Proof of Oral Contract