Patekar: Dud for dud?

Mumbai, June 30: Enraged, Bollywood is wondering why it needs to be saddled with a stamp duty.

Amused, Maharashtra officials are sniggering: Look no further than Nana Patekar.

The actor had moved court over a payment complaint the same day a controversy broke on the imposition of a tax on the entertainment industry in Maharashtra.

The telling coincidence has come in as handy ammunition to the government which claims that the stamp duty will give a much-needed legal sanctity to contracts that Bollywood stars and other showbiz personalities sign.

“Once a contract is duly stamped, it becomes legally enforceable and can be contested in a court of law,” the inspector-general (stamps and registration), .P. Gupta, told The Telegraph over the phone from Pune.

The amendment covers activities relating to “any advertisement on mass media, made for promotion of any product, or programme or event with an intention to make profits or business out of it”.

It also mentions that a stamp duty of 0.25 per cent has to be paid when the value of the contract exceeds Rs 1 lakh. This means that the executors of the contract will have to shell out Rs 250 for every Rs 1 lakh mentioned in the agreement.

He added that the duty would help the entertainment industry settle disputes in a methodical manner as a stamped agreement between two individuals can be admitted and contested in court.

“Unless the stamp duty on agreements or contracts is paid, the court does not consider the document valid. The court will impound such documents and send them to us for recovering the stamp duty,” another official said.

Patekar had yesterday slapped a civil suit on producer Dilip Wadhwani for not paying an “agreed” acting fee of Rs 75 lakh for a film. The actor claimed that Wadhwani had issued dud cheques of Rs 50 lakh and Rs 25 lakh for acting in the film Vadh, one of the flops of 2002.

Patekar’s lawyer Nilesh Pawaskar refused to say today if a stamped contract was signed between the actor and the producer. “Suits like these are filed on the basis of a negotiable instrument, irrespective of whether there is a contract or not. In Nana’s case, the two cheques exist,” Pawaskar said.

Payment-related complaints crop up in Bollywood frequently. They are usually referred to industry associations for mediation.

Asked who should pay the levy ? the actor or the producer ? officials pointed to a clause that says that “the person executing the instrument” will have to shoulder the burden.

“A contract between an actor and a producer, for example, has to mention who will pay the stamp duty specifically. If it is not mentioned, we will hold both the parties responsible and divide the stamp duty amount equally between the two,” the deputy inspector-general, V.M. Mhaske, said.

Mhaske added that the amendment does not require those entering into a contract to visit registration offices. They can purchase the stamp paper of the relevant value and seal the agreement.