SC Overrules Verdict Of Holding Unstamped Agreements Invalid, Unenforceable

A 7-judge Constitution bench of the Supreme Court on Wednesday has held that non-stamping or insufficient stamping of an agreement has nothing to do with the validity of the document as it is a curable defect.

The bench headed by Chief Justice DY Chandrachud, in a unanimous verdict, overruled its judgement which held that if an agreement, having arbitration clause to resolve disputes between contracting parties, is unstamped then it is invalid and unenforceable.

The bench which also comprised justices Sanjay Kishan Kaul, Sanjiv Khanna, BR Gavai, Surya Kant, JB Pardiwala and Manoj Misra held that, “The agreements that are not stamped are not rendered void (invalid). Non-stamping of an agreement is a curable defect.”
Besides the CJI, who penned the judgement for himself and 5 other judges, Justice Khanna wrote a separate and concurring verdict.

On October 12, the apex court reserved its verdict on reconsideration of a prior order of its 5-judge bench which held that unstamped arbitration agreements are not enforceable in law.