Generally we confuse with the word ‘Bond’. In legal, bond have different meaning from the meaning perceived by the people in general sense.  In this article, will clear your concept about the bond in a very simple manner.

In general sense ‘Bond’ is a deed by which one person binds him to pay a sum to another person; it is an instrument the language of which itself must expressly create the obligation. A creditor whose debt is secured through a bond is called a bond creditor. Thus no document can be a ‘Bond’ unless it is one which by itself creates obligation to money within the stipulated period. Section 2(5) of the Indian Stamp Act, 1899 defines “Bond” as it includes-

(a) any instrument whereby a person obliges himself to pay money to another,on condition that the obligation shall be void if a specified act is performed or is not performed, as the case may be;

(b) any instrument attested by a witness and not payable to order or bearer,whereby a person obliges himself to pay money to another; and

(c) any instrument so attested, whereby a person obliges himself to delivergrain or other agricultural produce to another.

The above definition seems to be not exhaustive. Section 2(d) of the Limitation Act, 1963 defines that “Bond” includes any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed as the case may be. This definition indicates that a bond may be absolute or it may be conditional also. In a conditional bond, the obligator undertakes certain condition that if he does some particular act or abstains from doing some act, the obligations contained in the primary part of the document shall be void. For example, if a person enters into a bond to be of good behaviour to society during a specified period and in case of making default he binds himself to deposit with the government a sum of rupees three thousand, and during the specified period he maintains good behaviour, his obligation to pay the sum under the bond becomes void. However, in a simple bond’ the instrument contains an obligation to pay money, the money is not payable to bearer and the document is attested by a witness. Such bonds may also be executed to create an obligation to deliver grain or other agricultural produce.

Execution of the “Bond” is essential, it cannot be oral. In civil matters the instrument of bond’ must be attested at least by one witness who should give his signature before the executant of the bond. Although the registration of “bond” is not necessary but where the value of the immovable property in which some interest is created is rupees 100 or upwards, its registration is compulsory. A”bond” should be properly stamped according to Schedule First- article 15 or 16 of the Stamp Act, as per the nature and value of the bond.


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