Indemnity Bond Format in India: What It Is, Uses, and a Sample Structure (2026)

Explainer · Legal Formats

Updated for 2026 · Claw Editorial

An indemnity bond is a written promise, usually made on stamp paper and often notarised, in which one person agrees to make good a specified loss suffered by another. It is widely asked for when documents are lost, insurance claims are made, or a government office needs protection against a later dispute. This guide explains the format, the common uses, the stamp paper rules, a sample clause outline, and what happens if the promise is broken. Last verified October 2026.

01Why people need an indemnity bond

Most people meet an indemnity bond when an office asks for one and they do not know what to write. A bank, an insurer, a registrar or an employer says, "Please submit an indemnity bond on stamp paper," and the clock starts.

Someone is taking a risk for you

The office is being asked to act without full proof. It may be issuing a duplicate share certificate, releasing an insurance payout, or accepting a claim without an original paper. If the original later turns up in the wrong hands, the office could be sued. The bond moves that risk to you.

The format is not fixed by one law

There is no single government form called an "indemnity bond". The wording is a private contract, and each office often has its own preferred text. That is why people search for a sample, a PDF, or a bond of indemnity form. The structure below works as a safe starting point, but you should always check what the receiving office wants.

Mistakes are costly

A bond on the wrong stamp value, with missing details, or with a vague promise can be rejected. Worse, a badly worded bond can be hard to enforce when you actually need to rely on it.

02What an indemnity bond is

An indemnity bond is a signed document in which one party promises to compensate another for a loss or claim that may arise from a stated event. It is a contract, so it needs the normal parts of a contract: two parties, a clear promise, and consent.

An indemnity bond is a written promise to cover a specific loss. The clearer the risk is described, the easier the promise is to enforce.

The three basic parts

• Indemnifier: the person who gives the promise and agrees to bear the loss. This is usually the person asking the office to act.
• Indemnified (or indemnity holder): the person or body who receives the promise and is protected, such as a bank, insurer, company or government office.
• The risk covered: the exact loss, claim, damage or cost that the indemnifier will make good, for example a claim by a third party after a duplicate document is issued.

What the law says

The Indian Contract Act, 1872 defines a contract of indemnity in section 124. In simple words, it is a contract where one party promises to save the other from loss caused by the promisor’s own conduct or by the conduct of any other person. Section 125 sets out the rights of the person who is indemnified, such as recovering damages, costs of suits and sums paid under a compromise, within the limits stated there. You can read the Act on India Code.

Indemnity bond versus similar papers

People often mix up an indemnity bond with an affidavit or a self-declaration. An affidavit is a sworn statement of facts, while an indemnity bond is a promise to bear a loss. See what an affidavit means and the self-declaration format for those. Many offices ask for an affidavit and an indemnity bond together.

03Common uses of an indemnity bond in India

Indemnity bonds are used wherever one side needs protection against a later claim. These are the most common situations.

Lost or missing documents

This is the most searched use. A person who has lost a share certificate, a property paper, a bond or a deposit receipt may be asked for an indemnity bond before a duplicate is issued. The bond protects the issuer if the original later appears and someone else claims under it.

Insurance claims

Insurers may ask for an indemnity bond when the original policy or a key document is lost, or where a claim is settled on incomplete papers. LIC and other insurers often use their own prescribed wording for this.

Employment

An employee may be asked for a bond of indemnity when a document such as an original certificate is missing, or when the employer wants cover against a claim linked to the hire. Note that service bonds that restrict an employee from leaving are a different thing, and their enforceability depends on being reasonable.

Government and other processes

Offices that issue duplicates, release funds or transfer records, such as registrars, transport offices, banks and utilities, may ask for an indemnity bond so that they are not left exposed. Property and succession related transfers sometimes use it too.

For a related format that many readers also need, see the guide to the partnership deed format.

04Stamp paper and notarisation

An indemnity bond is normally executed on non-judicial stamp paper, and the stamp value depends on the state. There is no single national figure, so you must check the rule for the state where the bond is signed or used.

Stamp duty is state-specific

Stamp duty on bonds and similar instruments is set by the Indian Stamp Act, 1899 as amended by each state. Some states fix a small flat amount for an indemnity bond, while others link the duty to the value secured. Offices commonly ask for stamp paper of a stated value, so ask the receiving office first. Your state revenue or stamps department website, or a licensed stamp vendor, can confirm the current amount.

Why stamping matters

An instrument that is not properly stamped may not be accepted as evidence until the deficiency and any penalty are paid. So the right stamp value is not a formality. It protects your ability to rely on the bond later.

Notarisation

Many offices ask for the bond to be notarised. A notary public attests that the signatory appeared and signed. Notarisation adds credibility but it does not replace stamping. Some offices only need the stamp paper and signatures, and some want two witnesses as well, so check what is required.

E-stamping

Many states now offer e-stamping, which gives an electronic stamp certificate instead of physical paper. Whether the receiving office accepts it is a practical question to settle in advance.

05A sample indemnity bond clause outline

The outline below is a general structure you can adapt. Replace the bracketed items with your details, and align the wording with the office that asked for the bond.

Keep each clause short and specific. Describe the document or event by its number, date and issuer so there is no doubt about what the bond covers.

06Drafting tips that avoid rejection

• Use the office’s own format if it has one. Many banks, insurers and companies publish a prescribed text. Adapt that rather than a generic sample.
• Match the names exactly. Use the same spelling of names and addresses as on your ID and the original document.
• Describe the risk precisely. A vague promise to cover "any loss" is harder to enforce than one tied to a named document or event.
• Consider a cap or a time limit. An open-ended promise is a heavy burden on the person giving it, so agree limits if possible.
• Stamp before signing. Buy the right stamp paper first, in the name of the executant where the state requires it.
• Keep copies. Keep a copy of the signed and stamped bond, and a copy of the police complaint or newspaper notice if the office asked for one for a lost document.

If you are the person receiving the bond, check that the indemnifier has real means to pay. A promise is only as good as the person making it. Some offices ask for a surety, which is a third person who also stands behind the promise.

07If an indemnity is dishonoured

If the indemnifier does not make good the loss, the usual remedy is a civil suit for recovery. The bond is a contract, so the indemnity holder can sue to enforce it.

What the Contract Act gives the indemnity holder

Section 125 of the Indian Contract Act lets the indemnity holder recover, within the limits of the promise, damages he is made to pay in a suit, the costs of defending that suit, and sums paid under a lawful compromise. The right depends on the bond being valid and the loss falling within the risk described.

Practical steps

1. Send a written demand to the indemnifier, with a copy of the bond and proof of the loss.
2. If there is no response, send a legal notice through an advocate.
3. File a civil suit for recovery in the court that has jurisdiction under the bond and the Code of Civil Procedure.
4. Watch the limitation period, because a late suit can be barred. Take advice on the period that applies to your facts.

A recovery suit can run for a long time, with many hearings and dates. Knowing when the next hearing is, and what the court ordered last, matters for both sides. Searching by party name helps when you only have the names on the bond and not a case number.

If you are dealing with a related wrong, such as a false statement made during a dispute, that is a separate matter. See the guide on defamation under sections 499 and 500 IPC. And if the dispute is about a mark or brand, see trademark search tools in India.

08Where 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.

Claw does not draft or stamp your indemnity bond, and this page is not a substitute for an advocate. Its place in this topic comes later, if an indemnity is dishonoured and a recovery suit is filed. In that case, you can create a free Claw account to track the recovery suit by party name, so you do not miss a hearing or an order. Claw has a free plan for individual advocates, while teams and enterprises are on paid plans.

09Sources and further reading

• Indian Contract Act, 1872 (sections 124 and 125): indiacode.nic.in
• Indian Stamp Act, 1899 and state amendments: indiacode.nic.in
• Claw: clawlaw.in

Stamp duty and office requirements change and differ by state. Confirm them with your state stamps department and the office asking for the bond.

10Frequently asked questions