Indemnity Bond

Querist : Anonymous (Querist) 24 January 2010 This query is : Resolved
Sir,
What is Indemnity Bond? In what way it helps in purchase of land thro GPA?
Thanks to all

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adv. rajeev ( rajoo ) (Expert) 24 January 2010
1.statement of liability to pay compensation for a loss or for a wrong in a transaction to which you are a party
2. Compensation for a loss or a wrong.
The deed executed by the a person is known as indemnity bond.
Indemnity bond is different from the GPA. GPA is to work for another and the work done by the GPA holder binds on the person who has executed the GPA.
Indemnity is only to compensate the loss. Eg., Insurance co., collecting the premium indemnify the loss in case of an accident, or loss of goods etc.,

N RAMESH. (Expert) 24 January 2010
I agree with the explanation.

kranthi kiran (Expert) 24 January 2010
The indemnity clause used in the deed of GPA or Sale Deed, (such as" The Vendor does hereby agree to keep indemnified the Vendee from and against all losses, costs, damages and expenses which the Vendee may sustain by reason of anybody to the said property" ) is enough in case of immovable property transactions. No seperate indemnity bond is required.

Sachin Bhatia (Expert) 26 January 2010
Indemnity Bond:

A bond to indemnify and save harmless the party to whom the bond is issued against some anticipated loss.

Coverage for loss of an obligee in the event that the principal fails to perform according to standards agreed upon between the obligee and the principal.

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