Sections 38 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.
Once an instrument has been impounded under section 33, section 38 says where it goes. Section 39 gives the Collector a power to refund penalty, and section 46 protects the person who sends the original to the Collector and lets the owner demand a copy first. The three sections are not consecutive, but they are one story.
If the impounding person admits the instrument on payment of penalty under section 35 (or duty under section 37), he sends the Collector an authenticated copy with a certificate of the duty and penalty levied, and the money. In every other case he sends the original. When a copy is sent, the Collector may refund any portion of the penalty above five rupees, and the whole penalty if the only defect was a breach of section 13 or section 14. A sender is not liable for loss, destruction or damage in transmission of an original, and the owner may require a copy to be made first at his own expense.
How these sections fit together
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 amounts of five rupees in section 39 are quoted as printed. If you have a document that has been impounded in your matter, our legal dispute resolution team can help you decide the next step.
The starting points are Section 33, which requires impounding, and Section 35, which allows admission on duty and penalty. The site's guide to impounding of instruments not duly stamped gives the outline.
Section 38: how an impounded instrument is dealt with
Sub-section (1): the copy goes to the Collector
The sub-section applies when "the person impounding an instrument under section 33 has by law or consent of parties authority to receive evidence" and "admits such instrument in evidence upon payment of a penalty as provided by section 35 or of duty as provided by section 37". In that case he "shall send to the Collector":
- an authenticated copy of the instrument;
- a certificate in writing stating the amount of duty and penalty levied in respect of it; and
- the amount itself, either to the Collector or "to such person as he may appoint in this behalf".
The text speaks of sending a copy, a certificate and the money to the Collector, not of sending the original.
Sub-section (2): every other case
"In every other case, the person so impounding an instrument shall send it in original to the Collector." This covers every impounding that does not fall within sub-section (1). The Collector then deals with it under section 40 (see Section 40).
| Case | What is sent to the Collector |
|---|---|
| Admitted in evidence on penalty under s.35 or duty under s.37 by a person with authority to receive evidence | Authenticated copy, certificate of duty and penalty levied, and the amount |
| Every other case | The instrument in original |
Section 39: refund of penalty
Section 39 is headed "Collector's power to refund penalty paid under section 38, sub-section (1)". It applies only where a copy has been sent under section 38(1).
Sub-section (1): penalty above five rupees
"When a copy of an instrument is sent to the Collector under section 38, sub-section (1), he may, if he thinks fit, ... refund any portion of the penalty in excess of five rupees which has been paid in respect of such instrument."
Three features follow from the text.
- The power is discretionary: "if he thinks fit".
- It reaches only the part of the penalty above five rupees. The first five rupees stay with the Government.
- The ellipsis in the quotation stands for words that the footnote says were omitted by Act 4 of 1914, s. 2 and the Schedule Pt I: "upon application made to him in this behalf or, if no application is made, with the consent of the chief Controlling Revenue-authority". The current text therefore carries no requirement of an application or consent on its face; any practice on that point should be checked in the official text and under State rules.
Sub-section (2): a breach of section 13 or 14 only
"When such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may refund the whole penalty so paid." Sections 13 and 14 deal with the way an instrument is written on stamp paper, as explained in the article on Sections 13 to 16. Where the only defect is a breach of those sections, there is no limit of five rupees. The Collector may refund the whole penalty, again at his discretion ("may").
Example
Rekha Pillai produces a rent agreement in a civil suit. The court admits it on payment of the deficient duty and a penalty. The court sends the Collector an authenticated copy, a certificate of the amounts and the money. Under section 39(1) the Collector may refund any part of the penalty above five rupees. If the deed had been impounded only because it was written on stamp paper in a way that broke section 13, section 39(2) would let him refund the whole.
Section 46: loss in transmission and a copy in advance
Sub-section (1): no liability for loss
"If any instrument sent to the Collector under section 38, sub-section (2), is lost, destroyed or damaged during transmission, the person sending the same shall not be liable for such loss, destruction or damage." The protection covers the sender in the case where the original goes to the Collector.
Sub-section (2): the right to a copy
"When any instrument is about to be so sent, the person from whose possession it came into the hands of the person impounding the same, may require a copy thereof to be made at the expense of such first-mentioned person and authenticated by the person impounding such instrument."
In plain words, the person who produced the instrument may ask for a copy before it goes. The copy is made at that person's own expense and is authenticated by the impounding person. This protects the owner against the risk of loss on the way, since the sender is not liable under sub-section (1).
Points to note
- The five-rupee figure is the same as the base penalty in proviso (a) to section 35, but section 39 only deals with refunds after a copy has been sent.
- Section 39 uses the word "may" twice. It gives a power, not a right to a refund.
- The Chief Controlling Revenue-authority has its own power to refund penalty on application in writing under section 45, covered in Sections 43 to 45.
- The text consulted contains no rules on how copies are authenticated or how money is transmitted.
Need help with an impounded document?
When a document has been impounded, the owner may want a copy before the original goes, and may want to ask for part of the penalty back. Our team can plan these steps through our legal dispute resolution service, whichever forum is involved.
Key takeaways
- If an instrument is admitted on penalty under section 35 or duty under section 37, an authenticated copy, a certificate of duty and penalty and the amount go to the Collector.
- In every other case the original goes to the Collector.
- The Collector may refund any part of a penalty above five rupees, and the whole penalty where the only defect was a breach of section 13 or 14.
- A sender is not liable for loss, destruction or damage of an original in transmission.
- The owner may require an authenticated copy to be made, at his own expense, before the original is sent.
Read next
- Section 40 of the Indian Stamp Act, 1899: Collector's power to stamp impounded instruments
- Section 33 of the Indian Stamp Act, 1899: examination and impounding
- Sections 13 to 16 of the Indian Stamp Act, 1899: writing on stamp paper and denoting duty
- Impounding of instruments not duly stamped
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.