Dear Colleagues,

I have come across many Long-Term Settlements including settlements under Section 18(3) which have been signed on a non-judicial stamp paper, mostly having a value of Rs.100/-. Can you please highlight the legal requirements of non-judicial stamp paper, preferably with the relevant Section?

From India, Delhi
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Babu Alexander

Settlements under Section 12(3) and settlement under Section 18 (1) are typed in plain paper only. non-judicial stamp paper is not a requirement under law.
Sec 12(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings. The memorandum of the settlement is signed by the parties to the dispute, before the Conciliation Office . Such Agreements stand as a binding to the Employer and its employees in the organisation.
Sec: 18 (1) When ever a dispute arise between the employer and its workmen, they come to a settlement after mutual discussions with out any third party intervention and settle the disputes, arrive at by agreement between the employer and workman concerned. The memorandum of settlement has to be send to the respective Conciliation Officer for registration and copy to the respective labour department of government. This memorandum of settlement shall be binding on the parties to the agreement/ settlement only.

From India, Madras

Basically it is a mutual settlement/agreement between the parties, that way it is a contract, legally speaking. A valid contract can be on any paper, it can even be oral. It does not matter on its validity or binding nature whether it is executed on non-judicial stamp paper or otherwise. Making it on a non-judicial stamp paper does not add any legal value to it but it would surely look to be a legal document executed by the parties consciously.
From India, Mumbai

All agreements need to be on stamp paper.
If not, in case of dispute, the court may ask you to pay the stamp duty (10 times of the normal duty) before admitting the document as evidence.

Whether you use 100 or 500 rupees stamp paper, depends on the stamp rules of the concerned states.
You need to check with your lawyer for the correct information.

From India, Mumbai

Dear friends,

The Indian Stamps Act,1899 provides for stamp duty in respect of instruments mentioned in its schedule I read with section 3 of the Act. Agreements or settlement or awards under the Labor Laws do not find place there. The Industrial Disputes Act, 1947 under which such instruments are made also does not prescribe any stamp duty on them. Therefore, it is enough that settlements made under the Labor Laws can be deduced in writing in plain paper.

From India, Salem

Thank you for the update, Umakanthan.M Sir I was not aware that its not in the Stamp Act.
From India, Mumbai

Would this question be better referred to the CiteLegal forum for advice?
From Australia, Melbourne

I believe we should know such things, so even though it is legal, I would be happy to see such questions (specially as they are related to HR / IR functions) posted here. I hope there is no specific rule on the forum not having such questions.

From India, Mumbai

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