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Indemnity Bond

(Querist) 01 April 2008 This query is : Resolved 

Thanks for such a wonderful forum you started.
I appriciate if you answer my question :

I booked a flat in pune in 2005 and got possession in Dec 2006.
now in Apr 2007, builder is ready to give me completion letter. But he is demanding Rs. 1 Lac for indemnity bond.
I am not sure what is this.
and he did not tell me while purchasing the flat.
Also can you please let me know what is this and who is liable to pay the amount.

Kalpana.S (Expert) 01 April 2008
You need to ask the builder for what purposes he needs the indemnity bond.
Kalpana.S (Expert) 01 April 2008
In common parlance indemnity is often used as a synonym for compensation or reparation.

As a legal concept, it has a more specific meaning. For instance, compensation connotes merely a sum paid to make good the loss of another without regard to the payer's identity, or their reasons for doing so.

You need to ask the builder for what purposes he needs the indemnity bond.
Manish Singh (Expert) 02 April 2008
However if he is asking for an indemnity bond, it doesn't make any sense to give him any amount since you need to indemnify a person in case you incur any loss to him. So for what reason he is asking for the compensation before the loss done to him.
Anyways, I don't think the builder needs to ask you for an indemnity bond because the society formed afterwards will take care of the whole society.

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