BHasker (engineer) 09 May 2010

Declaration cum indemnity bond

Hi Sir,

I am Purchasing a site and taking a loan from LIC Housing. The LIC asking me to sign on a stamp paper titled "Declaration cum indemnity bond".

It has the following information.

"Further i indemnify LICHFL from any losses , interests, claims or rights , financial or otherwise if any , arising out of no availability of documents , minor's interest , litigation , non regularaziataion of deviations in constructions etc and other acts of omission/commission in connection with the said property and construcion /development as mentinoed above.

Signature of deponet

Date:

According to LIC the property i am purchasing is pre approved by them . It means they verified the gueninity of the property.

Here my question is that if the property is genuine and pre approved b LIC for loans ,

why should i sign on the above mentioned "Declaration cum indemnity bond" . The LIC is insisting me to sign the same.

Please advice me in this regard. Your help is very much needed.

Thanks

Bhasker

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1 Replies

Ayush (Advocate) 15 May 2010

as far as i understand your question, LIC Housing has advanced a loan to you for the purchase of the site ad the LIC has declared the plot to be genuine and approved. The reason for indemnity bond would be to save itself from any losses which may be occured by the LIC due to non compliance of procedure by you. For instance, there would be condition with the site that the owner must complete the construction on the site within so and so period. However, if the owner does not construct any building thereupon, an amount may be charged as non-contruction fee by the authority you are purchasing the site from. LIC has approved the site and is genuine from all encumbrances but LIC wants you take responsibility of all the expenses or fees that may be charged in future by the authority.

e.g. a fees may be charged for the non availability of the documents by the authority, LIC wants to keep itself on the safe side and wants you to take responsibility for any fees that may be charged due to non-availability of the documents. There may be so many charges like that which you will have to compensate, not LIC.

The answer is opinion of my personal knowledge. Dont take my answer to be granted. Please have a legal advice.