Amendment in Maharashtra Stamp law makes FIs incriminate themselves

The amendment is certainly grossly harsh for financial institutions–FIs as it not only assigns the responsibility of stamp duty payment on them but also imposes a penalty in case of failure to comply

One of the major amendments of Maharashtra Stamp Act, 1958 has been insertion of Section 30A which requires any financial institutions (FIs) such as banks, non-banking financial companies (NBFCs), housing finance companies (HFCs) or alike to ensure that proper stamp duty is paid on all instruments which creates rights in favor of such instruments.


The amendment goes further to impose liability for not just such instruments executed post the amendment, but also such instruments, which though were executed before  commencement of this amendment but are effective after the amendment. And for such instruments FIs shall impound such instruments before 30 September, 2013


In exercise of powers conferred by sub-section (2) of Section 1 of the Maharashtra Tax Laws (Levy and Amendment) Act, 2013, the Maharashtra government vide Notification No.VAT 1515/CR 57/Taxation-1 dated 25 April 2013 made certain amendments in the Maharashtra Stamp Act, 1958 (the Stamp Act) effective from 1 May, 2013.


The amendment is certainly grossly harsh for the FIs as it not only assigns the responsibility of payment of stamp duty on the FIs but also imposes a penalty equal to the stamp duty payable on such instrument in case of failure to comply with the same. Moreover, the amendment requires the financial institutions to impound, on or before 30 September 2013 for all such insufficiently stamped instruments which were executed before 1 May 2013 and are effective as on date.


According to Oxford Dictionary, ‘impound’ means to take legal or formal possession. 


As per Section 33 of the Stamp Act… “Every person having by law or consent of parties authority to receive evidence and every person in charge of public office, except an officer of police or any other officer, empowered by law to investigate offences under any law for the time being in force, before whom any instrument chargeable with stamp duty is produced or comes in the performance of his functions, shall if it appears to him that instruments is not duly stamped, impound the same, irrespective whether the instrument is not valid in law.”


Proviso to Section 33 of the Stamp Act states that

“1) any magistrate or judge of criminal court shall not be deemed to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than proceeding under Chapter IX (order for maintenance of wives, children and Parents) or Part D of Chapter X (Disputes as to immovable property) and

b) a Judge of a High Court may delegate the duty of examining and impounding any instrument under the Section to such officer as the Court may appoint in this behalf.”


It is clear that the power to impound a document is with the authority specified in the Section. Also, impounding can only be done at a time when the instrument is produced or comes in the performance of the function of the authority. Hence it does not fit in the rationale for a stamp act amendment to require the FI on suo moto to go for impounding of the document, which under the Act itself is not permissible and it can only be done when produced before the empowered authority.


In view of the above-mentioned, the executor of an instrument itself being expected to impound what is not duly stamped (instrument) is like imposing self-incrimination


This amendment with retrospective effect will surely not be well received by the FIs. Impounding by FIs for inadequate stamp duty paid on instruments executed prior to 1 May 2013 and effective as on date will be cumbersome. This is surely a draconian amendment requiring the party who is the offender to impound for the instrument not properly stamped on or before 30 September 2013.


(The author can be contacted at [email protected])


Axis hikes lending rate while Dena Bank increases deposit rates

Axis Bank increased benchmark lending rate to 10.25% while Dena Bank hiked term deposit rates by 1% for select deposits

Axis Bank, India’s third largest private sector bank, on Monday increased its benchmark lending rate by 0.25% to 10.25%. It will make home, auto and corporate loans costlier than other loans linked with base rate or the minimum lending rate.

“The new base rate will be effective from 19 August 2013,” the lender said in a statement.


On the other hand, Dena Bank, one of the oldest banks in India, has revised its term deposit rates. The lender hiked interest rates by 1% on its foreign currency non-resident bank (FCNR-B) and resident foreign currency (RFC) term deposit rates. For deposits of three years to less than four years, the new deposit rate would be 4.78% and for deposits of four years to less than five years it would be 5.17%. However, interest rates for FCNR/RFC deposits of between two and three years remain unchanged at 2.48%. For deposits between one and two years, the rates remain at 2.67%, the bank said.


Dena Bank’s FCNR (B)/RFC term deposit Rates

 (Interest in % terms p.a.)

Maturity Period








1 year to less than 2 years















2 years to less than 3 years















3 years to less than 4 years















4 years to less than 5 years















5 years only















Figures in brackets indicate previous rates for August 1 to18, 2013.


Last week ICICI Bank and HDFC Bank increased interest rates on domestic term deposits (NRO) deposits and NRE deposits. While in the case of ICICI Bank, the interest rate hike varies between 0.5 and 0.75%, HDFC Bank increased interest rate by 0.25%. Public sector lender Andhra bank also hiked its base rate 0.25% to 10.25% during last week.



Ramesh Poapt

4 years ago

Retail Indian depositor is the only 'bechara'or joker in the pack!.Lending rates up NRE/FCNR rates up, but FD rates are increased considering him as bagger (fractionalrise), so that the real interest rates are too NEGATIVE den d real inflation!sorry,poor commonman/sr.citizen,God bless you as FM is not in yr favour!

McGraw Hill Financial raises stake in CRISIL to 67.8%

McGraw Hill Financial bought additional 15.1% stake in CRISIL at Rs1,210 per share or for Rs1,290 crore

McGraw Hill Financial on Monday said its stake in ratings agency CRISIL Ltd increased to 67.8% after it bought 15.1% worth Rs1,290 crore ($214 million).


“...McGraw Hill Financial acquired 1.06 crore shares or about 15.1% stake from shareholders of CRISIL,” the company said in a statement.


After the acquisition, McGraw Hill's stake in the ratings agency has gone to 67.8% from 52.8%.


Harold McGraw III, Chairman, President and CEO of McGraw Hill Financial said, “We have enjoyed a very productive long-term relationship with CRISIL, which has been enormously successful, and our new investment underscores the confidence we have in CRISIL’s future”.


The company said it has financed the transaction with existing cash resources at a cash offer of Rs1,210 per share.


The offer represents a premium of 29% to the closing share price on 31 May 2013 and a premium of 12% to CRISIL’s all-time closing high on the NSE prior to the offer being announced.


CRISIL closed Monday 1.1% down at Rs1,155 on the BSE, while the benchmark Sensex wended the day 1.6% down at 18,307.


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