Indemnity Bond in India: Format and When It Is Used (2026)
What an indemnity bond is under the Indian Contract Act, where it is commonly required, the stamp duty, a usable format you can adapt for a lost document or a duplicate, and how it is enforced. Last verified October 2026.
Format · Drafting
An indemnity bond is a written promise by one person to make good any loss suffered by another. In law this is a contract of indemnity, defined by Section 124 of the Indian Contract Act, 1872, where one party promises to save the other from loss. In everyday life it is the document a bank, an office or an authority asks for when there is some risk they want covered, for example when you have lost an original document, want a duplicate issued, or claim money of a person who has died without the usual papers. This page explains what an indemnity bond is, where it is used, the stamp duty, a usable format you can adapt, and how it is enforced. Last verified October 2026.
- What it is: a written promise to make good another person's loss, a contract of indemnity under Section 124 of the Indian Contract Act, 1872.
- Common uses: getting a duplicate of a lost document, claiming a deceased person's dues without a succession certificate, and transfers or releases.
- Stamp duty: charged under the state Stamp Act, varies by state, often a fixed or modest amount; confirm your state figure before signing.
- Enforcement: if the covered loss happens, the holder can recover from the indemnifier under Section 125 and sue on the bond if unpaid.
01What an indemnity bond is
Under Section 124 of the Indian Contract Act, 1872, a contract of indemnity is one where a person promises to save another from loss caused either by the promisor's own conduct or by the conduct of any other person. An indemnity bond is the one-sided written form of that promise: the person giving it, the indemnifier, binds themselves to compensate the person receiving it, the indemnified, for any loss that may arise from a stated situation.
Unlike an agreement between two sides giving and taking, an indemnity bond is usually signed by one person in favour of another, who may be a bank, a company, a government office or an individual. The person who holds the bond can, under Section 125, recover from the indemnifier the damages, costs and sums they have to pay because of the matter covered.
02Where it is commonly required
You are most likely to be asked for an indemnity bond in situations like these:
- Lost document or duplicate: when an original share certificate, fixed deposit receipt, insurance policy, academic certificate or property paper is lost and you want a duplicate issued, the issuer asks for an indemnity bond so that it is protected if the original turns up or is misused.
- Claim after a death: when a legal heir claims a bank balance, provident fund, insurance or other dues of a person who has died without a will or a succession certificate, the payer often takes an indemnity bond from the heirs. Where the amount is large, a succession certificate or the process to get one may be required instead.
- Transfer or release: for a vehicle transfer, a property transfer among heirs, or release of goods, an office may ask for an indemnity bond, sometimes along with a legal heir no-objection document.
- Employment and contracts: an employer or a contracting party may take an indemnity bond to cover a specific risk.
03Stamp duty and execution
An indemnity bond must be executed on stamp paper, or on an e-stamp, of the value fixed by the stamp law. The duty on an indemnity bond is charged under the specific entry for such bonds in the stamp schedule, and the amount is set by each state, so it varies. It is often a fixed or modest duty rather than a percentage, but you should confirm the current figure for your state before you execute the bond.
Stamp duty varies by state
The stamp duty on an indemnity bond is a state subject and differs from one state to another. Some authorities also want the bond notarised, and some want a surety to join it. Check the exact stamp value and whether notarisation or a surety is needed on your state stamp authority portal, or with the office asking for the bond, before you sign.
For how stamping works more generally, see stamp duty on agreements, and for the online route, how e-stamping works in India.
04A usable indemnity bond format
Below is a general indemnity bond format for a common use, a duplicate of a lost document. Adapt the recitals, the covered situation and the amount to your case, put it on stamp paper of the value set by your state, and get it notarised or witnessed as the authority requires.
INDEMNITY BOND
This Indemnity Bond is made on this ____ day of __________ 20____
BY
I, [Full name], aged ____ years, [son/daughter/wife] of __________,
resident of ____________________ (hereinafter the INDEMNIFIER),
IN FAVOUR OF
[Name of the bank / office / company / person] (hereinafter the
INDEMNIFIED).
WHEREAS the Indemnifier was holding [describe the document/asset,
for example Fixed Deposit Receipt No. ____ / Share Certificate
No. ____ ] issued by the Indemnified.
AND WHEREAS the said [document] has been lost / misplaced /
destroyed, and the Indemnifier has requested the Indemnified to
issue a duplicate / to make payment, and the Indemnified has
agreed to do so on the Indemnifier furnishing this indemnity.
NOW THIS BOND WITNESSES:
1. That in consideration of the Indemnified issuing the duplicate
/ making the payment, the Indemnifier undertakes to keep the
Indemnified fully indemnified and harmless against all loss,
claims, demands, costs and expenses that may arise on account
of the said [document] or its duplicate.
2. That if the original [document] is later found, the Indemnifier
shall surrender it to the Indemnified and shall not use it.
3. That this indemnity shall remain in force and bind the
Indemnifier and the Indemnifier's legal heirs.
IN WITNESS WHEREOF the Indemnifier has signed this Bond on the
date first written above.
________________
INDEMNIFIER
WITNESSES:
1. Name, address, signature __________
2. Name, address, signature __________
(Notary / attestation, if required.)Hand the executed, stamped bond to the authority asking for it, with any identity proof and the supporting documents they list.
05How an indemnity bond is enforced
If the covered loss actually happens, the person holding the bond can claim the amount from the indemnifier. Under Section 125, the indemnity holder can recover the damages, costs and sums they are compelled to pay in the matter the bond covers. If the indemnifier does not pay, the holder can sue on the bond to recover the loss, treating it as a contract.
Two practical points keep a bond strong. First, describe the covered situation precisely, because an indemnity is read for what it actually says. Second, stamp and execute it correctly, since a bond that is unstamped or under-stamped can face objection when it is produced. An indemnity bond is a real financial obligation, so sign one only when you understand the risk you are taking on.
06Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
When an indemnity is disputed, the question is usually how courts have read a similar promise: what loss it covered, whether the holder could recover before actually paying, and how a one-sided bond was enforced. Claw lets you search 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, to find rulings on indemnity and contract points like yours, with results in under 5 seconds. If a suit on the bond is already filed, Claw tracks cases, orders and hearings across 9,102 courts, benches and forums, so you can follow it by party name. Claw does not use your case documents to train its AI models.
Create a FREE Claw account to find indemnity and contract rulings on point and track any suit, using case search across Indian courts.
07Sources and further reading
- India Code (Indian Contract Act, 1872, Sections 124 and 125; the Stamp Act schedule for your state): indiacode.nic.in
- Claw: clawlaw.in
This is a general format and information, not legal advice. Stamp duty, notarisation and whether a surety is needed differ by state and by the authority asking for the bond, so confirm the current requirements and have the bond settled by an advocate before you sign.
08Frequently asked questions
What is an indemnity bond?
An indemnity bond is a written promise by one person to compensate another for any loss that may arise from a stated situation. In law it is a contract of indemnity under Section 124 of the Indian Contract Act, 1872, usually signed by one person, the indemnifier, in favour of another, the indemnified.
When is an indemnity bond required?
Most often when a bank or office wants to be protected against a risk, for example to issue a duplicate of a lost document, to pay the dues of a person who has died without a succession certificate, or to allow a transfer or release of an asset.
How much stamp duty is payable on an indemnity bond?
It is charged under the specific entry for such bonds in the stamp schedule, and the amount is set by each state, so it varies. It is often a fixed or modest duty rather than a percentage. Confirm the current figure for your state before you execute the bond.
Does an indemnity bond need to be notarised?
Not always, but many authorities ask for it. Some also want a surety to join the bond. Check what the office asking for the bond requires, and execute the bond on stamp paper of the correct value, with witnesses and notarisation if needed.
How is an indemnity bond enforced?
If the covered loss happens, the holder can recover the damages, costs and sums they have to pay from the indemnifier under Section 125 of the Indian Contract Act. If the indemnifier does not pay, the holder can sue on the bond as a contract to recover the loss.
What is the difference between an indemnity bond and a surety or guarantee?
An indemnity bond is a direct promise to cover another person's loss. A guarantee or surety involves a third person promising to answer for the default of someone else, such as a borrower or an accused. An indemnity covers loss; a guarantee backs another person's obligation.