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Section 67: Penalty for not drawing full number of bills or marine policies purporting to be in sets

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1899
Section 66 All 78 Sections Schedule I (Arts 1–65) Section 68

Legal Commentary & Landmark Judgments: Section 67

Section 67 criminalizes the practice of drawing or executing fewer parts of a bill of exchange, cheque, or policy of marine insurance than the full number stated on the face of the instrument to evade stamp duty, subjecting the drawer to a substantial fine.

  • Targeted Commercial Instruments: Applies to bills of exchange, cheques, promissory notes, and policies of marine insurance drawn or executed in sets of two, three, or more parts.
  • Actus Reus - Incomplete Execution of Sets: Penalizes drawing or executing an instrument purporting to be part of a set without executing the full number of parts stated on the face of the document.
  • Intent to Defraud Revenue: Requires establishing an intent to defraud the Government of stamp duty by circulating fewer stamped parts than represented to trade counterparties.
  • Substantial Penal Sanction: Imposes a fine which may extend to one thousand rupees, reflecting the high-value commercial risk associated with negotiable instruments and maritime insurance fraud.
Key Landmark Precedents:
  • Grover & Grover v. CCRA, AIR 1955 All 411: The Allahabad High Court analyzed the statutory framework governing bills drawn in sets, holding that Section 67 enforces transparency in international trade finance by penalizing the circulation of incomplete sets.
  • Canara Bank v. Nuclear Power Corporation of India Ltd., 1995 Supp (3) SCC 81: The Supreme Court stressed that commercial banking and negotiable instruments demand strict adherence to statutory integrity, with penal sections operating as vital deterrence against financial fraud.
  • Abdul Majid v. State, AIR 1963 Guj 45: The Gujarat High Court confirmed that prosecution under Section 67 requires clear proof of fraudulent design to avoid purchasing full sets of foreign bill stamps.
Courtroom Practice & Strategic Litigation Guidance:

In maritime trade, documentary credit (LC), and international banking transactions, trade finance counsel must ensure that foreign bills of exchange and marine insurance certificates drawn in sets (e.g. 'Sole of Exchange' or '1 of 3') strictly correspond to the exact number of physical or electronic counterparts stamped. Maintain an unbroken audit trail of all parts of the set in trade finance documentation to prevent exposure under Section 67.

Section 66 All 78 Sections Schedule I (Arts 1–65) Section 68