Deed of Hypothecation (India) by OLL

Deed of Hypothecation - Machinery

THIS DEED OF HYPOTHECATION executed at ________

on this the ___________ day of _________

between

Mr.________________, son of_____________,

aged about ___________ years,

residing at _____________________,

hereinafter called the CREDITOR (which expression shall, unless it is repugnant to the context mean and include his legal representatives, executors, administrators, and assigns)

And

Mr.________________, son of_____________, aged about ___________ years, residing at _____________________, hereinafter called the BORROWER (which expression shall, unless it is repugnant to the context mean and include his legal representatives, executors, administrators and assigns);

WHEREAS

The BORROWER has placed an order for the purchase of, a ___________, namely________________, {valued at Rs.____________ (Rupees ____________), (Details of the same are set out in the schedule 'A' hereunder) (hereinafter referred to as the asset), with the ________________, namely ________________, having its office at __________, and has remitted an amount of Rs.______________(Rupees _____________only}, with the said _________________ as advance towards the sale consideration.

The BORROWER has approached the CREDITOR for a loan of Rs.______________, (Rupees _____________only), for the payment of the balance price of the schedule 'A' mentioned asset. The CREDITOR and BORROWER have agreed that the CREDITOR shall finance the purchase of the schedule 'A' mentioned asset, on the condition that the BORROWER hypothecates the schedule mentioned asset with the CREDITOR as security for the due repayment of the said loan. The parties have agreed to reduce their agreement to writing

NOW THEREFORE IN CONSIDERATION OF THE MUTUAL OBLIGATIONS AND UNDERTAKINGS CONTAINED HEREIN THIS AGREEMENT WITNESSETH AS FOLLOWS:

Payment by the CREDITOR

The CREDITOR shall pay to the said manufacturer, on behalf of the BORROWER, a sum of Rs. ____________/-, (Rupees _______), towards the balance price of the said asset and shall retain possession of the original invoice of the said asset till the debt is fully discharged by the BORROWER.

Hypothecation

The BORROWER hereby hypothecates and creates a charge on the asset more fully described in the schedule 'A' hereunder to and in favour of the CREDITOR as security for the repayment of the loan with interest.

Obligations of the BORROWER

The BORROWER hereby undertakes to repay the loan amount within a period of ______ months commencing from________ along with interest. The BORROWER shall pay interest at the rate of ______________ on the principal per month, at Rs._____________/-, (Rupees ____________only). The Interest and principal are payable in monthly installments as per schedule-B hereto.

Rights of the CREDITOR

If the BORROWER defaults in payment of the amount as per schedule-B hereto then such defaulted installment will carry interest as if the defaulted installment is the principal, until it is paid. If the BORROWER fails to pay any ______ installments then the CREDITOR shall be entitled to claim the principal and interest amount due, and the same shall become payable forthwith, on the CREDITOR calling upon the BORROWER to make payment of such defaulted principal amount.

The BORROWER shall not remove or take the said asset, outside the State without prior intimation to the CREDITOR.

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