Banking · Indian Stamp Act
According to the Indian Stamp Act, 1899, what is the legal consequence if a Demand Promissory Note is unstamped or under-stamped at the time of execution?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It can be validated by paying a penalty of 10 times the deficiency.
- 2It is inadmissible as evidence in a court of law and the defect cannot be cured.✓
- 3The bank can apply to the Collector of Stamps for adjudication to rectify it later.
- 4The document remains valid for 3 years but cannot be used for summary suits.
Correct answer
It is inadmissible as evidence in a court of law and the defect cannot be cured.
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