Binod Kumar 01 November 2018

Stamping of a loan document of bank

Dear sir,
I have got my bank loan documents stamped by judicial stamp i.e. court fee.
Now bank is telling me that these documents are invalid as it should have been stamped by non-judicial stamp.
Kindly guide me in this case as re-stamping Wil cost me high.

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6 Replies

SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 02 November 2018

What was the loan? Which bank? Coop bank? Or Commercial Bank ?

SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 02 November 2018

Normally PSU/Private banks have time tested systems and procedures researched and standardised by the Head Office of each Bank. Branch Managers gave no say in the documentation. It's simply futile to discuss the matter in forums.

G.L.N. Prasad (Retired employee.) 02 November 2018

To avoid this, many banks keep adequate Non judicial stamps and they are empowered to keep such stocks. There is no ambiguity in such stipulation and only non judicial stamps must be used in case of transactions not connected with courts. If not done, it must be done. I have read that such judicial stamps can also be returned and I am not sure about the encashment.

Coming to the specific query, you have to execute such agreements / memorandums only with non judicial stamps and this is mandatory to give legal validity and there is no alternative.

SHIRISH PAWAR, 7738990900 (Advocate) 02 November 2018

You have to execute loan document on non-judicial stamp papers only. You may seek return of amount paid for judicial stamp papers. Judicial stamp papers are meant for judicial purpose meant for suit filing in court,

AVI M 10 November 2018

sir one of my friend working in bank had sanctioned a vehicle loan but disbursed the amont before stamping
is there any rectification in above case

G.L.N. Prasad (Retired employee.) 10 November 2018

@AVI M It is not a great mistake. Hypothecation of vehicle agreement can be taken even later. (During past hypothecation agreement was taken at the time of disbursal of loan by sending it to supplier, whereas vehicle with body building used to come after two months, after receiving such vehicle no, Chasis no, they used to incorporate in the blank form) Ask your friend to take it immediately and ask him to inspect the vehicle at the branch and verify chasis no and engine no The most important part is including Hire Purchase agreement clause with RTA and hypothecation agreement is the basis for that.