In any society, relationships are built on commercial and non-commercial agreements. Parties agree to a negotiated and typically binding arrangement of things between them, as to the course of action which will flow from each other. These arrangements can be of and be for a variety of reasons, and it is important that the arrangement should not be done away with, where its value fades prematurely.
Bindingness and Legal Sanction are essential for any arrangement to survive in a democratic state and for this purpose, the arrangements within an agreement between the parties are written/typed on a piece of paper bearing a certain value in the eyes of law expressly sanctioned by the state for the purpose.
The Indian Stamp Act defines stamp as ―stamp means any mark, seal or endorsement by any agency or person duly authorized by the State Government, and includes an adhesive, which serves the purposes of duty that is chargeable under this Act.14 different varieties of stamp papers are available in 10 denominations.
There are majorly two kinds of stamp paper
Judicial that is used for legal and court work;
Non-judicial that is used for registration of various documents, insurance policies, etc.
Judicial Stamp Papers:
In matters between parties, which concern court proceedings, the parties have to file various affidavits and petitions; the courts levy duty on these filings for the purpose of meeting expenses incurred in the functioning of the court.
Judicial Stamp Papers are Stamped Papers and duty payable is to the courts for the purpose of payment of court fee and other matters expressly judicial matters.
The court fee for different types of suits is different, section 7 of the Court Fee Act, 1870 provides for computation of fees in different matters.
For money.-(i) in suits for money (including suits for damages or compensation, or arrears of maintenance, or annuities, or of other sums payable periodically) – according to the amount claimed;
For maintenance and other formalities-(ii) In suits for maintenance or other sums that is payable periodically-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 moveable property that has a market value.-(iii) In suits for moveable property other than money, where the subject matter has a market value-according to such value at the date of presenting the plaint;
(iv)In suits –
For moveable property that essentially has no market-value.-(a) for moveable property where the subject-matter does not have market-value, as, for example, in the case of documents relating to title,
For enforcement of the right to share in a joint family-(b) 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 is prayed –(c) to obtain a declaratory decree or order, where consequential relief is prayed from the court,
For an injunction-(d) to obtain an injunction (be it temporary),
For easements-(e) for a right to some benefit that arises out of the land,
For accounts.-(f) for accounts according to the amount at which the relief sought is valued in the plaint or memorandum of appeal
Thus arrangements and fillings, which 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.
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 agreement, amendment 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; Government sets the Stamp Duty for each article and collects the revenue from the stamp duty.
For Example Stamp Duty for
It is Rs 50/- for Affidavits
Rupees 100 for General Power of Attorney
5% of amount secured, min 200 for Indemnity Bond/ Guarantee Bond
02% of market value for lease deed below 1 year