Insurance Policies are
stamped in accordance with the values prescribed in the Indian Stamp Act, 1899
- a fiscal statute laying down the law
relating to tax levied in the form of stamps on instruments recording
transactions. The purpose of this
enactment is to raise revenue for the local governments. Additionally, payment
of stamp duty imparts legality to the document making them authentic documents
in Court of Law. Stamp duty is to be paid in full and at the
time of contract inception. The Act also
provides for that – a person executing an instrument affixed with adhesive
stamp, shall cancel the adhesive stamp so affixed by writing on or across the
stamp his name or initials.
Here is an interesting case that came up before Calcutta High Court in
June 1929 – it was a reference made by the Board of Revenue, Bengal, under
Section 57 of the Indian Stamp Act, 1899 on whether a certain type of document
represented by a blank form attached to the statement of the case drawn up by
the Board of Revenue should be stamped with duty payable under Article 47-A (1)
(ii) of Schedule I to the Indian Stamp Act or with duty under Article 62 (c) of
the said Schedule or with some other and what duty.
The case pertained to an
Association called the Marine Insurance Association, Calcutta- who were issuing
Marina Insurance Policies upon goods. For these policies they had to pay stamp
duty as prescribed in the Indian Stamp Act. This Association has observed that,
in the course if shipments to India, the policies of insurance or their
equivalents sometimes take the form not of policies that have been executed in
India but of certificates that policies have been taken out abroad. It, appears
that this kind of certificate is so worded in some cases that it may be
construed as a document which transfers the rights of the original
policy-holder under a policy taken out abroad to the person interested in India
in the goods shipped--in many cases to the Bank through whom the bills for the
price of the goods are discounted. So, Marine
Insurance Association entered into correspondence with the Government of Bengal
representing that these certificates, to give them a neutral same, ought to be
subjected to duty under the Indian Stamp Act before they are allowed to operate
in India – various forums had varied opinions on this.
The Bench held that it is
not within the purview of Section 57 of the Indian Stamp Act at all that
section does not provide a means by which the authorities concerned in
collecting stamp duty can get advice from the Court by laying a case before it
for the decision a general question. It held that Court will decide only on an
actual case and will not provide opinion in the legal nature to a general
question.
The Court held that in the
impugned case, the person/body at whose
instance this matter has been raised as a general question is the Marine
Insurance Association, Calcutta. Its complaint is that certain of its rivals
are wrongly escaping stamp duty. No one of these rivals has been attacked
either by being threatened that the documents will be impounded or in any other
way. No one of the persons concerned is before the Court or has had an
opportunity of corning before the Court or can be brought before it. This case
illustrates very strongly the necessity of seeing that general questions are
not referred to the High Court under the machinery provided by Section 57 of
the Indian Stamp Act. The Court
dismissed the reference.
With regards – S.
Sampathkumar
2nd Sept. 2014.
