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Section 63: Penalty for failure to cancel adhesive stamp

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1899
Section 62 All 78 Sections Schedule I (Arts 1–65) Section 64

Legal Commentary & Landmark Judgments: Section 63

Section 63 creates a criminal penal offence punishing any person who, being required by Section 12 to cancel an adhesive stamp, fails to cancel it effectively so as to prevent its reuse, subjecting the offender to a statutory fine.

  • Statutory Obligation to Cancel: Directly penalizes non-compliance with the mandatory duty under Section 12, which requires any person executing an instrument bearing an adhesive stamp to cancel the stamp at the time of execution.
  • Actus Reus - Failure to Render Reusable: The offence is committed when the stamp is left uncancelled or cancelled so ineffectively that it can be removed, cleaned, and used a second time.
  • Strict Criminal Liability and Penalty: Prescribes a criminal fine which may extend to one hundred rupees (subject to enhanced state amendments), imposed by a Magistrate upon summary or regular trial.
  • Sanction Prerequisite under Section 70: No prosecution under Section 63 can be validly instituted by any private complainant without the prior sanction or direction of the Collector under Section 70.
Key Landmark Precedents:
  • Mahadeo Kori v. Sheoraj Ram Teli, AIR 1923 All 93: The High Court held that failure to cancel an adhesive stamp under Section 12 carries dual legal consequences: civilly, the instrument is deemed unstamped under Section 12(2), and criminally, the executant becomes liable to fine under Section 63.
  • Surajmull v. State of West Bengal, AIR 1969 Cal 403: The Calcutta High Court held that prosecution under Section 63 requires positive proof that the accused was the person who actually signed or executed the instrument and had the statutory obligation to cancel the stamp.
  • Emperor v. Ramaswamy, AIR 1940 Mad 655: The Madras High Court held that a criminal magistrate has no jurisdiction to take cognizance of an offence under Section 63 in the absence of a formal sanction issued by the Collector under Section 70.
Courtroom Practice & Strategic Litigation Guidance:

In corporate and transactional practice, implement an unwavering standard operating procedure: whenever adhesive stamps (such as revenue stamps on receipts or share transfer stamps) are affixed, ensure the signatory signs diagonally across both the stamp face and the document paper, recording the date of signature. If defending an accused under Section 63, immediately challenge the complaint under Section 482 CrPC / Section 528 BNSS, 2023 for lack of statutory sanction from the Collector.

Section 62 All 78 Sections Schedule I (Arts 1–65) Section 64