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Contract of indemnity

Definition .124

Contract in which one party promises the other party in case of loss caused to him by the promisor or by act of others.

Indemnifier-

The person who gives the indemnity 

Indemnity holder

The Person for whose protection it is given is called indemnity holder or indemnified

Case law

Secretary of State v bank of India ltd

The bank received  forged indorsement and it sent to the public debt office the original owner received compensation from state and the state was allowed to recover from bank on promise of indemnity.

Illustration 

An employee leaving employment earlier is valid only part of bond money is adjusted for the loss of the employer  

125.rights of indemnity holder when sued.

The indemnity holder can recover the amount from the promisor 

1.any amount for the suit 

2. Amount to defend the suit, in the absence of contract the promisee has acted prudently or the promisor authorised to defend the suit 

3.if the promissory asked to make the comprise 

Case law 

Mohit Kumar saha v new India assurance co ltd

The person insured for 2,00,000 lost his vehicle but compensated for a lesser amount was arbitary by the insurance company 

Gajanan moreshwar v moreshwar madan 

The indemnity holder should never be called to compensate the loss , unless damnified you are not indemnified .

Richardson re governor of st Thomas hospital 

Said it not repayment upon payment.

A company's agent was supplied with goods later the company went into liquidation but has to compensate for the losses  


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