In any society, relationships are built on commercial and non-commercial agreements. To ensure that these agreements are binding and have a legal sanction, parties write them on a piece of paper bearing a certain value in the eyes of the law, expressly sanctioned by the state for the purpose. In India, these papers are referred to as stamp papers, and there are 14 different varieties of them available in 10 denominations.
There are two main types of stamp papers:
1. Judicial Stamp Papers
Judicial stamp papers are used for legal and court work. In matters between parties that concern court proceedings, the parties have to file various affidavits and petitions, and the courts levy duty on these filings to meet expenses incurred in the functioning of the court.
The court fee for different types of suits is different, and section 7 of the Court Fee Act, of 1870 provides for the computation of fees in different matters:
- For money: In suits for money, including suits for damages or compensation, arrears of maintenance, annuities, or other sums payable periodically, the fee is according to the amount claimed.
- For maintenance and other formalities: In suits for maintenance or other sums that are payable periodically, the fee is according to the value of the subject matter of the suit, where such value shall be estimated to be about ten times the amount claimed to be payable for the next one year.
- For any other movable property that has a market value: In suits for movable property other than money, where the subject matter has a market value, the fee is according to such value at the date of presenting the plaint.
- In suits for a moveable property that essentially has no market value: For a moveable property where the subject matter does not have market value, as in the case of documents relating to the title.
- For enforcement of the right to share in a joint family: To enforce the right to legal share in any property on the ground that it is joint family property, for instance in the case of Hindu Undivided Families.
- Where declaratory decree and consequential relief are prayed: To obtain a declaratory decree or order, where consequential relief is prayed from the court.
- For an injunction: To obtain an injunction (be it temporary).
- For easements: For a right to some benefit that arises out of the land.
- For accounts: For accounts according to the amount at which the relief sought is valued in the plaint or memorandum of appeal.
Arrangements and filings that concern the administration of justice are carried out on judicial stamp papers, and duty in the form of court fees is applicable to them. A judge will never use a non-judicial stamped paper for the administration of justice, such as writing down orders and judgments, and will not accept petitions filled on such papers.
2. Non-Judicial Stamp Papers
Non-judicial stamp papers are used in matters which concern transactional arrangements between parties that are not judicial in nature, such as an agreement to sell, affidavits, lease agreements, amendments in the article of association, etc. For every type of transaction, a certain amount of stamp duty is fixed by the state. Different states levy different stamp duties for different transactions. Thus, the government sets the stamp duty for each article and collects the revenue from the stamp duty.
For example, stamp duty is:
- Rs. 50/- for affidavits
- Rs. 100 for general power of attorney
- 5% of amount secured, minimum 200 for indemnity bond/guarantee bond
- 2% of market value for lease deed below 1 year
Non-judicial stamp papers bear evidentiary value depending on the nature of the transaction and the property involved. For example, a sale deed, although made and stamped on a non-judicial stamp paper, also has to be notarized and registered with the local registrar’s office as per the law. Similar provisions exist for lease deeds as well.
Judicial and non-judicial stamp papers play a crucial role in legal transactions in India. Judicial stamp papers are used for court-related documents and require payment of court fees, while non-judicial stamp papers are used for non-court-related transactions and involve specific stamp duties set by the state. Understanding the differences between these two types of stamp papers is important for individuals involved in legal matters. By adhering to the necessary procedures and using the appropriate stamp paper, individuals can ensure the legal validity and enforceability of their documents, protecting their rights and interests in a lawful manner.