Section 2 Stamp Act: Definitions

Section 2 of Indian Stamp Act: Definitions

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

In this Act, unless there is something repugnant in the subject or context,—

(1) [ "allotment list" means a list containing details of allotment of the securities intimated by the issuer to the depository under sub-section (2) of section 8 of the Depositories, Act, 1996; [Substituted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.]

(1A) "banker" includes a bank and any person acting as a banker;]

(2) Bill of exchange.Bill of exchange means a bill of exchange as defined by the Negotiable Instruments Act, 1881 ( 26 of 1881 ), and includes also a hundi, and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money;

(3) Bill of exchange payable on demand.Bill of exchange payable on demand includes an order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen; an order for the payment of any sum of money weekly, monthly or at any other stated period; and a letter of credit, that is to say, any instrument by which one person authorises another to give credit to the person in whose favour it is drawn;

(4) Bill of lading.Bill of lading includes a through bill of lading, but does not include a mates receipt;

(5) Bond.Bond includes [but does not include a debenture;] [Added by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be; any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another;

(6) Chargeable.chargeable means, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument, chargeable under the law in force in [India] [Substituted by Act 43 of 1955, Section 2, for "the States" (w.e.f. 1.4.1956).] when such instrument was executed or, where several persons executed the instrument at different times, first executed;

(7) Cheque.cheque means a bill of exchange, drawn on a specified banker and not expressed to be payable otherwise than on demand;

(7A) [ "clearance list" means a list of transactions of sale and purchase relating to contracts traded on the stock exchanges submitted to a clearing corporation in accordance with the law for the time being in force in this behalf; [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.]

(7B) "clearing corporation" means an entity established to undertake the activity of clearing and settlement of transactions in securities or other instruments and includes a clearing house of a recognised stock exchange;

(8) ["Chief Controlling Revenue Authority" omitted by the Adaptation of Indian Laws Order, 1937. See now clause (10) of section 3 of the General Clauses Act, 1897 (10 of 1897).]

(9) Collector.Collector means, within the limits of the towns of Calcutta, Madras and Bombay, the Collector of Calcutta, Madras and Bombay, respectively and, without those limits, the Collector of a district, and includes a Deputy Commissioner and any officer whom [the [State Government] [Substituted by A.O.1937, for "the L.G." .] ] may, by notification in the Official Gazette, appoint in this behalf;

(10) Conveyance.conveyance includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I;

(10A) [ "debenture" includes - [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not; bonds in the nature of debenture issued by any incorporated company or body corporate; certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time; securitised debt instruments; and any other debt instuments specified by the Securities and Exchange Board of India from time to time;

(10B) "depository" includes - a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996; and any other entity declared by the Central Government, by notification in the Official Gazette, to be a depository for the purposes of this Act;]

(11) Duly stamped.duly stamped, as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in [India] [Substituted by Act 43 of 1955, Section 2, for "the States" (w.e.f. 1.4.1956).] ;

(12) Executed and execution.executed and execution, used with reference to instruments, mean signed and signature; [and includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000] [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] [* * *] [Definition of [collecting Government" inserted by A.O.1937 was omitted by A.O.1950.]

(13) Impressed stamp.impressed stamp includes labels affixed and impressed by the proper officer, and stamps embossed or engraved on stamped paper; [(13-A) India.India means the territory of India excluding the State of Jammu and Kashmir;] [Inserted by Act 43 of 1955, Section 4 (w.e.f. 1.4.1956).]

(14) [ "instrument" includes - [Substituted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and any other document mentioned in Schedule I, but does not include such instruments as may be specified by the Government, by notification in the Official Gazette;]

(15) Instrument of partition.instrument of partition means any instrument whereby co-owners of any property divide or agree to divide such property in severalty, and includes also a final order for effecting a partition passed by any revenue-authority or any civil Court and an award by an arbitrator directing a partition;

(15A) [ "issuer" means any person making an issue of securities;] [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.]

(16) Lease.lease means a lease of immovable property, and includes also a patta; a kabuliyat or other undertaking in writing, not being a counter-part of a lease, to cultivate, occupy, or pay or deliver rent for, immovable property; any instrument by which tolls of any description are let; any writing on an application for a lease intended to signify that the application is granted;

(16A) [ "marketable security" means a security capable of being traded in any stock exchange in India; [Substituted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.]

(16B) "market value", in relation to an instrument through which - any security is traded in a stock exchange, means the price at which it is so traded; any security which is transferred through a depository but not traded in the stock exchange, means the price or the consideration mentioned in such instrument; any security is dealt otherwise than in the stock exchange or depository, means the price or consideration mentioned in such instrument;]

(17) Mortgage-deed.mortgage-deed includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates to, or in favour of another a right over or in respect of specified property;

(18) Paper.paper includes vellum, parchment or any other material on which an instrument may be written;

(19) Policy of insurance.policy of insurance includes any instrument by which one person, in consideration of a premium, engages to indemnify another against loss, damage or liability arising from an unknown or contingent event; a life-policy, and any policy insuring any person against accident or sickness, and any other personal insurance; [*] [The word "and" and sub-Clause (c) omitted by Act 5 of 1906, Section 2.] [* * *] [The word "and" and sub-Clause (c) omitted by Act 5 of 1906, Section 2.] [(19-A) Policy of group insurance [Inserted by Act 43 of 1955, Section 4 (w.e.f. 1.4.1956).] .policy of group insurance means any instrument covering not less than fifty or such smaller number as the Central Government may approve, either generally or with reference to any particular case, by which an insurer, in consideration of a premium paid by an employer or by an employer and his employees jointly, engages to cover, with or without medical examination and for the sole benefit of persons other than the employer, the lives of all the employees or of any class of them, determined by conditions pertaining to the employment, for amounts of insurance based upon a plan which precludes individual selection;]

(20) Policy of sea-insurance or sea-policy.policy of sea-insurance or sea-policy means any insurance made upon any ship or vessel (whether for marine or inland navigation), or upon the machinery, tackle or furniture of any ship or vessel, or upon any goods, merchandise or property of any description whatever on board of any ship or vessel, or upon the freight of, or any other interest which may be lawfully insured in, or relating to, any ship or vessel, and includes any insurance of goods, merchandise or property for any transit which includes, not only a sea risk within the meaning of clause (a), but also any other risk incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance; where any person, in consideration of any sum of money paid or to be paid for additional freight or otherwise, agrees to take upon himself any risk attending goods, merchandise or property of any description whatever while on board of any ship or vessel, or engages to indemnify the owner of any such goods, merchandise or property from any risk, loss or damage, such agreement or engagement shall be deemed to be a contract for sea-insurance;

(21) Power-of-attorney.power-of-attorney includes any instrument (not chargeable with a fee under the law relating to Court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it;

(22) Promissory note.promissory note means a promissory note as defined by the Negotiable Instruments Act, 1881 ( 26 of 1881 ); it also includes a note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen;

(23) Receipt.receipt includes any note, memorandum or writing whereby any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received, or whereby any other movable property is acknowledged to have been received in satisfaction of a debt, or whereby any debt or demand, or any part of a debt or demand, is acknowledged to have been satisfied or discharged, or which signifies or imports any such acknowledgment, and whether the same is or is not signed with the name of any person; [*] [The word "and" omitted by Act 18 of 1928, Section 2 and Sch.I.]

(23A) [ "securities" includes - [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956; a "derivative" as defined in clause (a) of section 45U of the Reserve Bank of India Act, 1934; a certificate of deposit, commercial usance bill, commercial paper, repo on corporate bonds and such other debt instrument of original or initial maturity upto one year as the Reserve Bank of India may specify from time to time; and any other instrument declared by the Central Government, by notification in the Official Gazette, to be securities for the purposes of this Act;]

(24) Settlement- settlement means any non-testamentary disposition, in writing, of movable or immovable property made in consideration of marriage, for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him, or for any religious or charitable purpose; and includes an agreement in writing to make such a deposition [and, where any such disposition has not been made in writing, any instrument recording, whether by way of declaration of trust or otherwise, the terms of any such disposition] [Inserted by Act 15 of 1904, Section 2.] ; [*] [The word "and" inserted by Act 18 of 1928, Section 2 and Sch.I, omitted by A.O.1950.]

(25) [ Soldier [Added by Act 18 of 1928, Section 2 and Sch.I.] .soldier includes any person below the rank of non-commissioned officer who is enrolled under the [Indian Army Act, 1911];]

(26) [ Stamp [Clause (26) inserted by Act 23 of 2004, Section 117 (w.e.f. 10.9.2004).] .Stamp means any mark, seal or endorsement by any agency or person duly authorised by the State Government, and includes an adhesive or impressed stamp, for the purposes of duty chargeable under this Act.]

(27) [ "stock exchange" includes - [Inserted by Finance Act, 2019 (Act No. 7 of 2019 ) dated 21.2.2019.] a recognised stock exchange as defined in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956; and such other platform for trading or reporting a deal in securities, as may be specified by the Central Government, by notification in the Official Gazette, for the purposes of this Act.] ANDHRA PRADESH.- For Section 2, sub-section (13) after clause (b), the following clasue shall be Added, namely, - "(c) impression by franking machine or any other such machine as the State Government or the Central Government, as the case may be, by notification in the Official Gazette, specify."[Act No. 8 of 2003]

Legal Commentary & Landmark Judgments: Section 2

Section 2 of the Indian Stamp Act, 1899 establishes statutory definitions governing the entire machinery of the Act, defining core legal concepts including 'instrument' [Sec 2(14)], 'conveyance' [Sec 2(10)], 'bond' [Sec 2(5)], 'lease' [Sec 2(16)], 'bill of exchange' [Sec 2(2)-(3)], 'chargeable' [Sec 2(6)], 'duly stamped' [Sec 2(11)], and 'executed' [Sec 2(12)].

Comprehensive Definition of 'Instrument' [Section 2(14)]: Defines an instrument as every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished, or recorded; encompasses formal deeds, letters, memoranda of understanding, electronic records (under IT Act 2000), and court orders that alter or declare legal entitlements inter partes.
Expansive Scope of 'Conveyance' [Section 2(10)]: Encompasses conveyances on sale and every other instrument by which property, movable or immovable, or any estate or interest in any property is transferred inter vivos and which is not otherwise specifically provided for by Schedule I; judicially construed to include composite amalgamation decrees, demergers, and consent awards transferring title.
Bonds, Leases, and Duly Stamped Standards [Sections 2(5), 2(11), 2(16)]: Distinguishes a 'bond' (obligation to pay attested by witness, not payable to order/bearer) from promissory notes; defines 'lease' broadly beyond Section 105 TPA to include kabuliyats, agreements to lease, and undertakings to cultivate; mandates under Section 2(11) that 'duly stamped' requires not only numerical duty adequacy but strict compliance with prescribed manner, description, and cancellation of stamps.

Key Landmark Precedents:

Hindustan Lever v. State of Maharashtra (2004) 9 SCC 438: The Supreme Court held that the definition of 'conveyance' under Section 2(10) is an inclusive definition of wide import; an order of the High Court sanctioning a scheme of amalgamation under Section 394 of the Companies Act transfers property inter vivos and squarely constitutes an 'instrument' and 'conveyance' chargeable with stamp duty.
Trustees of H.C. Dhanda Trust v. State of M.P. (2020) 9 SCC 510: The Supreme Court clarified the strict statutory meaning of 'duly stamped' under Section 2(11), holding that an instrument is duly stamped only when it bears an adhesive or impressed stamp not less than the amount required by law and has been affixed and cancelled in accordance with the mandatory procedures of the Act.
M.P. Housing Board v. Progressive Writers and Publishers (2009) 5 SCC 678: The Supreme Court distinguished between an agreement to lease requiring stamp duty as a lease under Section 2(16) and a mere executory agreement creating no immediate demise, ruling that an instrument that effects immediate demise or possession falls within the inclusive definition of lease under the Stamp Act.

Courtroom Practice & Strategic Litigation Guidance:

Scrutinize the character of every commercial agreement at the drafting and pleading stage: if a document creates an immediate demise or present transfer of possession, authorities will treat it as a lease or conveyance under Section 2(10)/2(16) attracting ad valorem duty rather than nominal agreement duty. In court, object to unmarked exhibits by testing them strictly against Section 2(11) 'duly stamped' benchmarks.

Section 2: Definitions

Section 2 of Indian Stamp Act: Definitions

Legal Commentary & Landmark Judgments: Section 2