However, if the agreement requires to be stamped and registered then it cannot be used as an evidence of proof before a Court of law. Under the Indian Stamp Act, 1899, Section 35 [1] specifically provides that a document which any person relies upon to be used as an evidence cannot do so if the same is not duly stamped and unregistered.

To make it enforceable and valid, you will be required to pay the deficit stamp duty alongwith penalty, if any, imposed by the collecting authority. The amount of penalty can be maximum upto 10 times of the deficit penalty amount. Imagine if the authorities pass orders stating that you have to pay an amount of Rs. 5 lacs as deficit stamp duty and impose penalty in addition upto 5 times the deficit amount which will come to Rs. 25 lacs and imagine the worse case where the penalty is 10 times.

Also it increases the litigation, delaying the process and adds up to your headache. So, to avoid any hassels you should make the agreement on a stamp paper and pay the required duty. And like a good citizen of the country abide by the law.

I absolutely agree with Ms.Usha kapoor.

I too agree with Ms Usha Kapoor.

Not agreed with Shri Bhartesh Goyal.

Agreements are not compulsorily registerable documents. They are dealt under S.18 of Registration Act.

In some states, some types of agreements are made as compulsorily registerable.

Stamp Act, S.35 provides the agreement made on plain paper as admissible, enforceable.

Ms Usha Kapoor's reply ( third para ) above contains explanation.