Section 62 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 62 is the main penal provision of the Act for instruments that are not duly stamped. It fines the person who signs, negotiates or otherwise deals with such an instrument, the person who votes on an unstamped proxy, and the company and officers who issue an unstamped share-warrant. This article covers section 62; section 62A, on the securities provisions, is in a different article.
Under section 62(1), any person who (a) draws, makes, issues, endorses, transfers, signs (other than as a witness), presents, accepts, pays, receives payment of or in any manner negotiates a bill of exchange payable otherwise than on demand or a promissory note that is not duly stamped; (b) executes or signs (other than as a witness) any other instrument chargeable with duty that is not duly stamped; or (c) votes or attempts to vote under a proxy not duly stamped, is punishable for every such offence with a fine which may extend to five hundred rupees. A penalty already paid under section 35, 40 or 61 is set off against the fine on the person who paid it. Under section 62(2), if a share-warrant is issued without being duly stamped, the company and its managing director, secretary or other principal officer at that time are punishable with the same fine.
Position in the Act
This article follows the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State of execution must be checked. This article explains the central Act only. The fine of five hundred rupees is quoted as printed. Section 62 does not set the duty; it penalises the failure to pay it. If you sign or negotiate documents in your business and want your stamping practice checked, our legal dispute resolution team can advise.
Section 62 opens Chapter VII (criminal offences and procedure). It works beside the civil consequences in Chapter IV, for example Section 35 (inadmissibility) and Section 40 (the Collector's penalty). The site's guides on the penalty for insufficient stamp duty and the consequences of not paying stamp duty give the outline.
Sub-section (1): three kinds of offence
The sub-section begins "Any person––" and lists three cases, each followed by the common punishment.
Clause (a): bills of exchange and promissory notes
The clause covers any person:
- drawing, making, issuing, endorsing or transferring, or
- signing otherwise than as a witness, or
- presenting for acceptance or payment, or
- accepting, paying or receiving payment of, or
- in any manner negotiating,
"any bill of exchange ... or promissory note without the same being duly stamped". The words in brackets were inserted, and the word "cheque" omitted, by Act 5 of 1927, s. 5, according to the footnotes. A bill of exchange payable on demand is therefore not within clause (a) as printed. The list of acts is wide. It reaches the drawer and the maker, but also the person who endorses, the person who presents, and the person who pays or receives payment.
Clause (b): every other chargeable instrument
"Executing or signing otherwise than as a witness any other instrument chargeable with duty without the same being duly stamped." The acts here are fewer: executing and signing (other than as a witness). A witness who attests a document is outside the clause.
Clause (c): proxies
"Voting or attempting to vote under any proxy not duly stamped." Both voting and attempting to vote are caught. For the form and rules of a proxy see the company-law post on proxy forms under section 105; this article states nothing from inside it.
The punishment
"Shall for every such offence be punishable with fine which may extend to five hundred rupees." Three points follow.
- It is a fine only. The section prescribes no imprisonment.
- The fine "may extend to" five hundred rupees. The court may impose less.
- "For every such offence" means the fine is per offence. Separate acts can attract separate fines.
The proviso: set-off of the penalty
"Provided that, when any penalty has been paid in respect of any instrument under section 35, section 40 or section 61, the amount of such penalty shall be allowed in reduction of the fine, (if any) subsequently imposed under this section in respect of the same instrument upon the person who paid such penalty."
| Condition | Effect |
|---|---|
| A penalty was paid in respect of the instrument under section 35, 40 or 61 | The amount is allowed in reduction of any fine later imposed under section 62 |
| The fine is on the person who paid the penalty | Only that person gets the reduction |
| The fine relates to the same instrument | The set-off applies to that instrument only |
The set-off is a reduction of the fine, not a bar to it. Section 43 separately says a payment of penalty does not bar prosecution, and section 61(4) allows the Collector to prosecute after a court's declaration. See Sections 43 to 45 and Section 61.
Sub-section (2): share-warrants
"If a share-warrant is issued without being duly stamped, the company issuing the same, and also every person who, at the time when it is issued, is the managing director or secretary or other principal officer of the company, shall be punishable with fine which may extend to five hundred rupees."
The persons liable are:
- the company issuing the share-warrant; and
- every person who, at the time of issue, is the managing director or secretary or other principal officer.
The test of office is "at the time when it is issued". An officer who joined later, or left earlier, is outside the words. For the Schedule I entries on share-warrants and proxies see the article on share certificates, letters of allotment, share-warrants, transfers and proxies.
Worked example
Rohan Malhotra signs a promissory note, as maker, without its being duly stamped. His friend Isha Kapoor endorses it and presents it for payment. Under clause (a), Rohan (making and signing) and Isha (endorsing and presenting) are each within the section. A fine may be imposed for every offence. If either has paid a penalty on the same note under section 35, 40 or 61, that amount is set off against the fine on that person. Separately, if a company issues a share-warrant that is not duly stamped, the company and its managing director and secretary at the time of issue are liable under sub-section (2). Whether the fine is imposed at all depends on a prosecution being brought in accordance with the Act.
What section 62 does not do
- It does not make the instrument invalid; section 35 deals with admissibility and section 40 with the Collector's steps.
- It does not describe the procedure for prosecution. Sections 70 to 72 deal with sanction, compounding and place of trial.
- It does not cover failure to cancel an adhesive stamp (section 63) or omission of facts (section 64); see the next article.
- It names no officer other than those in sub-section (2).
Need help with stamping practice?
Fines under section 62 are small, but the consequences for admissibility and for company officers are not. Our legal dispute resolution team can review your signing and negotiation practice and advise if a document has been left short.
Key takeaways
- A fine which may extend to five hundred rupees applies for every offence under section 62(1).
- Clause (a) covers bills of exchange payable otherwise than on demand and promissory notes, with a long list of acts; clause (b) covers executing or signing any other chargeable instrument; clause (c) covers voting or attempting to vote on an unstamped proxy.
- A penalty paid under section 35, 40 or 61 is allowed in reduction of a later fine on the same person for the same instrument.
- If a share-warrant is issued unstamped, the company and its managing director, secretary or other principal officer at the time of issue are punishable with the same fine.
- Duty rates come from the law and schedule of the State of execution, except for the instruments named in section 9(2)(a).
Read next
- Sections 63 and 64 of the Indian Stamp Act, 1899: penalty for not cancelling stamps and not stating the true consideration
- Section 61 of the Indian Stamp Act, 1899: revision of court orders on sufficiency of stamps
- Section 35 of the Indian Stamp Act, 1899: instruments not duly stamped inadmissible in evidence
- Penalty for insufficient stamp duty
Disclaimer: Based on the consolidated text of the Indian Stamp Act, 1899 published by the Department of Revenue, whose latest amendment shown is Act 13 of 2021, as consulted on 2 October 2026. Only the central text is covered: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, and State amendments, rules, notifications and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.