Rights and duties of indemnity-holder

Rights of indemnity-holder [Sec. 22(1) of NCA]

A person whose loss is to be made good is called the indemnity-holder. He has some rights against the indemnifier in accordance with the legal provisions incorporated under the Nepalese and Indian Contract Acts. But, the duties of the indemnity-holder have not been mentioned under the Acts. The indemnity-holder is entitled to recover any or all of the amounts of compensation under the contract. They are as follows:

i. All the indemnity amount (damage) prescribed in the contract.

ii. All the damages he may be compelled to pay a third party for the loss.

iii. All the costs spent on the case filed or defended by him in connection with the contract relating to indemnity.

iv. All the costs of legal actions, if it becomes necessary to initiate such an action for a failure to pay the amount mentioned in all the above clauses.

Duties of indemnity-holder

Except otherwise is mentioned in the contract, the indemnifier will not liable for the loss in the following circumstances. They are called duties of indemnity-holder too.

i. Duty to work prudently: Except otherwise is mentioned in the contract, the indemnifier will not liable for the loss caused by the negligence work of the indemnity-holder. In other words, it is the duty of indemnity-holder to work prudently.

ii. Duty not to act to cause harm or loss: If the indemnity-holder acting with the intention of causing any loss or damage, the indemnifier will not liable for such loss. In other words, it is the duty of indemnity-holder not to act to cause harm or loss.

iii. Duty to comply with the intention of promisor: If the indemnity-holder acting against the instruction of the other party or promisor, the indemnifier will not liable for the loss caused by such against act to his instruction. In other words, it is the duty of indemnity-holder to comply with the intention of promisor.