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Introduction

Stamp duty laws form the backbone of documentary authenticity in civil litigation and commercial transactions in India. The Indian Stamp Act, 1899, together with State amendments, imposes a statutory obligation that instruments chargeable with duty must be properly stamped before they are admitted into evidence.

At the same time, courts are expected to balance strict compliance with stamp laws against the fundamental objective of justice, namely deciding disputes on their merits.

A significant pronouncement by the Punjab and Haryana High Court, reported as 2025 Law Herald Online 1525, reaffirmed this balance by holding that a second application for impounding of a document cannot be dismissed merely because an earlier application was rejected.

Legal Framework Governing Stamp Duty and Impounding

The Indian Stamp Act, 1899 governs the levy of stamp duty on instruments. Two provisions are of particular importance.

• Section 33 imposes a duty on every authority receiving evidence to impound an unstamped or insufficiently stamped document.
• Section 35 bars admission of such documents unless duty and penalty are paid.

The Issue Before the High Court

The core question was whether a second application seeking impounding of a document can be rejected solely because an earlier application on the same issue was dismissed.

High Court’s Reasoning

• Stamp deficiency is a continuing illegality.
• The doctrine of res judicata does not strictly apply to stamp duty objections.
• Courts cannot contract out of their statutory duty.
• Every impounding application must be decided on merits.

Implications for Courts and Practitioners

Trial courts must independently examine stamp duty objections. Appellate courts cannot grant immunity to unstamped documents. Advocates must ensure compliance at the earliest stage to avoid delays and adverse consequences.

Relevance in Property and Commercial Litigation

The ruling has far-reaching implications in property disputes, commercial contracts, recovery suits, and cases involving agreements to sell, powers of attorney, and lease deeds.

Conclusion

The ruling reinforces the principle that statutory duties cannot be overridden by procedural shortcuts. An insufficiently stamped document remains legally defective until the law is complied with, regardless of earlier judicial orders.

Citation:
Stamp Duty, Impounding of Document, Second application must be decided on merits,
Punjab and Haryana High Court,
2025 Law Herald Online 1525