Indemnity Bond Format India | Word & PDF Template

Section 124 of the Indian Contract Act 1872 defines a contract of indemnity as one by which a party promises to save the other from loss caused by the conduct of the promisor himself or of any other person. The person giving the promise is the indemnifier; the person protected is the indemnity holder. Once that promise is put into a one sided instrument, attested by a witness, by which the executant obliges himself to pay, it becomes a bond within Section 2(5) of the Indian Stamp Act 1899. The institution you hand it to almost never signs; it simply relies on your promise. The statutory definition is narrow, since it covers only loss caused by human conduct, but courts apply equitable principles alongside it.

A contract of guarantee under Section 126 involves three parties and makes the surety's liability secondary, while an indemnifier's liability is primary and arises from the loss itself. An affidavit is a sworn statement of fact under the Oaths Act 1969, like our name change affidavit format for India. The affidavit says "my certificate is lost"; the bond says "if that statement causes you loss, I will pay". For duplicate securities within its simplified documentation threshold, SEBI now combines both in a single affidavit cum indemnity. Neither resembles a promissory note under Section 4 of the NI Act, which is an unconditional promise to pay a fixed sum.

The substantive law sits in Chapter VIII of the Indian Contract Act 1872. Section 125 lets the indemnity holder recover all damages he is compelled to pay in a suit covered by the promise, the costs of that suit if he acted prudently, and sums paid under a compromise that was prudent or authorised. Osman Jamal & Sons Ltd v. Gopal Purshottam (Calcutta High Court, 1929) held that these provisions are not exhaustive. In Gajanan Moreshwar Parelkar v. Moreshwar Madan Mantri (Bombay High Court, 1942), Chagla J. went further and held that an indemnity holder whose liability has become absolute can call on the indemnifier without first paying the claim himself.

Stamp duty is governed by the Indian Stamp Act 1899 and the State laws that amend or replace it. Under Article 34 of Schedule I, an indemnity bond carries the same duty as a security bond under Article 57; see the Indian Stamp Act 1899 on India Code, including Article 34 of Schedule I. An understamped bond is inadmissible in evidence under Section 35 until the deficit and a penalty of up to ten times that deficit are paid. In In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899 (13 December 2023), a seven judge bench of the Supreme Court held the defect curable and the instrument not void, but no registrar will process such a bond.

Registration under Section 17 of the Registration Act 1908 is not compulsory unless the bond creates rights in immovable property. Notarisation under the Notaries Act 1952 is not a statutory requirement, yet registrars insist on it. Sector rules add their own layer: Rule 6(2) of the Companies (Share Capital and Debentures) Rules 2014, the SEBI circulars on duplicate securities, Rule 7 of the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules 2016, and the Reserve Bank's directions on deceased customers' claims, now consolidated into its Responsible Business Conduct Directions. Our contract templates drafted under Indian law follow the same method.

The most common trigger is a lost physical share certificate. For a listed company, the investor files Form ISR-4 with the registrar and signs the affidavit cum indemnity prescribed by SEBI. For an unlisted company, Rule 6(2)(a) lets the Board issue a duplicate only with its prior consent and against supporting evidence and an indemnity, a routine file for anyone handling business and corporate documentation. Next come unclaimed dividends and shares transferred to the IEPF. Form IEPF-5, in the version substituted from 6 October 2025, requires an original indemnity bond from the claimant and, in certain cases, a surety affidavit.

Banks generate the rest of the volume. Where a deceased customer left no nominee and no survivorship clause, the Reserve Bank's simplified procedure lets the bank pay legal heirs below a threshold against a claim form, the death certificate and an indemnity from the claimants. Lost fixed deposit receipts and misplaced demand drafts follow the same logic.

One edge case is a lost original title deed. Before a lender accepts a certified copy of a registered sale deed for Indian property, it usually asks for an indemnity, a newspaper publication and a police complaint. A registered nominee claiming a deceased customer's deposit cannot be asked for an indemnity bond at all under the Reserve Bank's directions.

• The recital of facts identifies the indemnifier, every joint holder and the institution, then describes the instrument by folio, certificate number, distinctive numbers or deposit reference.
• The declaration of title confirms that the indemnifier owns the instrument, has not sold, pledged or transferred it, and knows of no competing claim.
• The operative indemnity covers losses, claims, damages, costs and compromise sums in the words of Section 125, extended to the institution's officers, registrar and successors. It excludes losses caused by the institution's own negligence or fraud, a carve out courts expect.
• The undertaking to surrender obliges the indemnifier to return the original immediately if found and to cooperate if a third party claims the duplicate or the released funds.
• The optional surety clause adds one or two sureties bound jointly and severally with the indemnifier. SEBI dropped the surety requirement for duplicate securities in May 2022, so you switch it on only when required.
• The continuing effect provision makes the bond irrevocable and binding on the heirs, executors and legal representatives of every signatory.
• The execution block records the date and place of signing, two witnesses with full names and addresses, and space for the notary's register book and serial number.

Maharashtra applies its own statute, the Maharashtra Stamp Act 1958, where the indemnity bond sits under Article 35 of Schedule I at a fixed duty set by the Maharashtra Stamp (Amendment) Act 2015. An instrument executed outside Maharashtra but received in the State may attract differential duty. The e-stamp certificate should describe the instrument as an indemnity bond, not an affidavit.

Delhi still works under the Indian Stamp Act 1899 as applied to the National Capital Territory, so the chain runs from Article 34 to the security bond entry in Article 57. E-stamp certificates issued through Stock Holding Corporation of India are the standard route. The certificate must name the first indemnifier as the purchaser. A certificate bought in someone else's name is a frequent reason bonds are returned.

Karnataka has a separate code, the Karnataka Stamp Act 1957, where Article 29 charges the indemnity bond at the rate of a security bond under Article 47. The Karnataka Stamp (Amendment) Act 2023, notified on 3 February 2024, raised the ceiling on that duty. A bond executed after that date on the old denomination is understamped.

Tamil Nadu applies the central Act with local amendments. The Indian Stamp (Tamil Nadu Amendment) Act 2023 (Tamil Nadu Act 13 of 2024) revised the duty on indemnity instruments with effect from 3 May 2024. For duplicate securities, SEBI requires stamp paper of the State where the claimant resides, which may differ from the State of the registrar's office. A Chennai resident dealing with a Hyderabad registrar stamps under Tamil Nadu law.

You start by selecting the State where you will sign, or your State of residence if the bond goes to a registrar for duplicate securities. Next, you choose the purpose: duplicate securities, a bank claim by legal heirs, a lost fixed deposit or demand draft, an IEPF refund or a general indemnity.

You then enter each indemnifier's full name, parentage, age, address and PAN, followed by the institution's name and registered office. Instrument details come next: copy folio, certificate and distinctive numbers from the institution's own letter. If a surety is required, you add their details and the joint and several clause is inserted automatically. Once complete, you download the indemnity bond format in Word and PDF, print it on e-stamp or franked paper of the correct value bought in the first indemnifier's name, and sign it before a notary with two witnesses present.

The stamp paper is the first trap: bought in a relative's name, purchased in the wrong State, or more than six months old when signed, which many registrars and the IEPF instructions treat as stale. The second is an incomplete list of signatories. Every registered joint holder must sign, even one who lives abroad. Mismatched particulars come third, and each fix means fresh stamp paper.

The drafting mistakes are subtler. Some downloaded formats promise to indemnify the institution against its own negligence or fraud, language Indian courts read down and careful counsel will refuse. Others omit the undertaking to surrender the original, leaving the indemnifier exposed if a lost certificate turns up in someone else's hands. Finally, many claimants sign bonds they never owed. A registered nominee on a bank account, or an investor whose securities fall below the value where SEBI accepts a plain undertaking, can decline the request and cite the applicable rule.