Indemnity

Question 1

Essential ingredients

Answer 1

Promise (express or implied) to save indemnity holder

From loss (actual or not actual)

Loss caused by promisor or any other person

Question 2

Gajanan Moreshwar v Moreshwar Madan 1942

Answer 2

ACTUAL LOSS, ABSOLUTE LIABILITY

FACTS
Plaintiff- Lease of plot for 999 years
Transferred benefit of lease to defendant
Defendant owed money to materials supplier- with help of plaintiff mortgaged the property for payment of debt (TWICE)
Lease transferred to defendant at his request
Defendant gave in writing that he would release plaintiff from claims w materials supplier and discharge all mortgages- did not do that

ISSUE
does indemnity holder need to suffer actual loss before he can sue for indemnity

RATIO
No- INTOLERABLE BURDEN on indemnity holder
If liability of indemnity holder is ABSOLUTE- entitled to get indemnified to pay off the claim
ICA- not exhaustive, EQUITABLE PRINCIPLES applied

LIABILITY OF INDEMNIFIER COMMENCES WHEN LIABILITY OF INDEMNITY HOLDER BECOMES ABSOLUTE

Question 3

Shanti Swarup v Munshi Singh
1967

Answer 3

IMPLIED INDEMNITY.

FACTS
Plaintiff (owner) executed mortgage

Sale deed executed for half that land w defendant- plaintiff paid defendant and left some amount in that to be paid to mortgagees to close debt

Neither plaintiff nor defendant paid mortgagees- mortgagees brought suit against plaintiff

ISSUE
is there a contract of indemnity

RATIO
Implied contract of indemnity (circumstances- leaving money w defendant)

Question 4

Rights of indemnity holder when sued

Answer 4

Damages- compelled to pay in bringing or defending suit

Costs- compelled to pay in bringing or defending suit

Sums - paid in compromise of suit

As long as the payment was:
Not contrary to orders of promisor
and
Prudent for promisee to make in the absence of contract of indemnity

OR
Promisor authorised him to do it