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Indemnity Bonds: What You Are Actually Promising

નુકસાની બંધપત્ર

An indemnity bond is a promise to make good someone else's loss. Everything about it turns on scope: what loss, arising from what, for how long, up to what amount.

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What it actually says

Somebody — a bank, a company, a registrar, an RTO — is being asked to do something on your word alone. Issue a duplicate when the original is missing. Release a balance without a formal legal representation. Transfer a record without producing a document. Each of those exposes them to a risk: the original may reappear, another claimant may emerge, the facts may turn out differently.

The indemnity bond is your written answer to that risk. You promise that if they act on your request and suffer loss as a result, you will make it good. That is a real financial obligation, undertaken by you, usually with no ceiling unless one is written in.

Scope is everything.

Read the operative clause and ask four questions. What loss is covered — only loss flowing from this transaction, or anything the institution suffers? Arising from what — the specific facts you have stated, or every consequence however remote? For how long — forever, or a stated period? Up to what amount — unlimited, or capped at the sum involved? A bond that answers those four narrowly is a proportionate document. One that answers them all at their widest is an open cheque, and it is worth knowing that before you sign it.

Where indemnity bonds come up

  • Duplicate share certificates. The classic case. Shares held in physical form, the certificate lost, and the company or its registrar will issue a duplicate against an indemnity, usually with an affidavit and a newspaper notice.
  • Lost title deeds. The original sale deed missing, and a buyer, a bank or a society needs comfort. Indemnity plus affidavit plus police complaint plus, in most cases, a certified copy from the Sub-Registrar's record.
  • A bank releasing a deceased customer's balance. Where the amount falls within the bank's own threshold, the branch typically releases against a death certificate, a declaration of heirs and an indemnity from the claimants. See notary work for banks.
  • Vehicle transfers. RTO matters where the seller has moved away, a document is missing, or a transfer is being completed after a death.
  • Lost fixed deposit receipts, drafts, cheque books and passbooks.
  • Employment and contractual settings — a company indemnifying a customer, or a contractor a principal.

The indemnity is only as good as the affidavit under it

An indemnity bond nearly always travels with an affidavit setting out the facts — that the certificate was lost, when and how, that no transfer was made, that no one else has a claim. The affidavit is where you make the factual assertions on oath under section 8(1)(e) of the Notaries Act, 1952; the bond is where you accept the financial consequence if they are wrong. Get the affidavit thin or vague and the bond becomes the only thing standing, which is a bad position. See affidavit notarisation.

Sureties

Some institutions want a surety or a co-obligant on the bond — another person, of means, who promises alongside you. If you are being asked to stand as a surety on somebody else's indemnity, read the document with the same four questions above, because a surety's obligation is generally as wide as the principal's. People sign these as a favour to a relative without reading them. Some of them are still answering for it years later.

Stamp duty

An indemnity bond is chargeable under the article of the Schedule to the Gujarat Stamp Act, 1958 that applies to it. Which article, and what the charge is, depends on what the instrument does — and a document titled “indemnity bond” that in substance also creates a security or an agreement may be charged differently. We do not publish figures: the Act was amended in 2025, and a stale rate produces an insufficiently stamped bond, which is discovered precisely when the institution tries to rely on it. We confirm the current duty at the counter and issue the e-stamp certificate here as a Government authorised centre, CSC ID 136237240013.

Do not stamp one and photocopy the rest.

The 2025 amendment inserted an Explanation treating copies, extracts and photocopies as original instruments for duty purposes. Indemnity bonds usually go to more than one place. Tell us how many executed originals you need before the stamp is issued, not afterwards.

Bring the institution's own format.

Banks, registrars and companies mostly have prescribed wording and will accept nothing else. If you have it, bring it — we will read it with you, tell you honestly where the scope is wider than the transaction warrants, stamp it correctly and notarise it. If you do not have it, ask for it before you pay for a draft that may be sent back.

What to bring

  • The institution's own prescribed format for the bond, if it has one
  • Its letter or checklist setting out what it requires
  • Original photo identity and PAN of every obligant and surety, with photocopies
  • Details of what has been lost — certificate number, folio, FD number, deed particulars
  • Police complaint copy and newspaper notice, where the item was lost
  • Death certificate and heirship papers, for a deceased account or holding

Related

Common questions

What does an indemnity bond actually commit me to?

To making good the loss the other party suffers if they act on your request and something goes wrong. The extent depends entirely on the drafting: what loss is covered, arising from what, for how long, and up to what amount. Many institutional formats are drawn very widely — unlimited in time and amount. That may still be acceptable to you, but you should be deciding it knowingly rather than discovering it later.

What stamp duty applies to an indemnity bond?

It is charged under the article of the Schedule to the Gujarat Stamp Act, 1958 applicable to the instrument, and the correct article depends on what the document does in substance, not on its title. The Act was amended in 2025, so we do not publish figures — a stale rate leaves the bond insufficiently stamped, which surfaces when someone tries to rely on it. We confirm the current duty at the counter.

Is an indemnity bond enough to get a duplicate share certificate?

Usually it is one part of a set. Companies and their registrars typically want the indemnity bond, an affidavit setting out how the certificate was lost, a police complaint, and often a newspaper notice, with the requirements varying by company. Ask the registrar for its checklist before you start. We prepare the whole set together so the file goes in complete rather than in instalments.

Not sure which document you need?

Tell us what the office, bank or court asked for. We will name the exact document, the stamp value and whether notarisation is enough — before you pay anything.

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