Legal Question in Banking Law in India

Re: Law of limitation

If you take a loan you have to pay the same. The plea which you have taken cannot be tenable.

Re: Law of limitation

Acknowledgment of debt does not require stamp duty so held by Bombay High Court. You may find the ruling in AIR Bombay between 1980 to 1987. Look up in any latest text book on Limitation Act under Sec.18 thereof. Many stamp Acts define acknowledgment as evidence of a new debt and not as acknowledgment of an existing debt. It should be possible to plead successfully that the unstamped acknowledgment can save limitation for a period of 3 years and if it is a mortgage for a period of 12 years from the date of acknowledgment.

Re: Law of limitation

The validity of loan documents is not affected by insufficiency or lack of stamps.

If a document is unstamped, it may still be valid and there may be a small penalty in lieu of stamp which may be paid in court; normally it is twenty times of the stamp value; thus if the document required a stamp of one rupees, you may have to pay twenty rupees as penalty.

Advice : The borrower is taking an untenable plea and the bank is safe.

Re: Law of limitation

No