Loan bond with surety and hypothecation of property

LOAN BOND WITH SURETY AND SIMPLE MORTGAGE OF PROPERTY

This Loan Bond is executed on this ______ day of ____________ at ____________, between:

1. Mr. X, s/o ____________, r/o ____________ (hereinafter called "the Debtor") of the First Part;

2. Mr. Y, s/o ____________, r/o ____________ (hereinafter called "the Surety") of the Second Part; and

3. Mr. Z, s/o ____________, r/o ____________ (hereinafter called "the Creditor") of the Third Part.

WHEREAS the Debtor has applied for a loan of Rs. ____________, which shall be repayable in instalments as specified hereunder, with interest at the rate of 18% per annum;

AND WHEREAS the Surety has agreed to give security for the above loan, and the Creditor has agreed to advance the loan on such security.

NOW THIS BOND WITNESSETH AS UNDER:

1. That in pursuance of the said agreement, the Creditor has advanced a sum of Rs. ____________ to the Debtor. The Debtor and Surety have jointly and severally agreed with the Creditor as under:

2. That the Debtor and the Surety are jointly and severally responsible for repayment of the above amount in four equal instalments, with interest, on a half-yearly basis, as under:

INSTALMENT | DUE DATE | PRINCIPAL AMOUNT | INTEREST
1st instalment | ________ | ________________ | ________
2nd instalment | ________ | ________________ | ________
3rd instalment | ________ | ________________ | ________
4th instalment | ________ | ________________ | ________

3. That in case of failure to pay any instalment, or part thereof, with interest, the entire amount along with interest shall become payable at once, and the Debtor and the Surety shall be jointly and severally liable to pay the same.

4. That for the consideration aforesaid, and in further pursuance of the aforesaid agreement, the Debtor and the Surety grant and transfer by way of simple mortgage to the Creditor all that property described in the Schedule hereto, which shall remain and be charged by way of simple mortgage as security for the payment to the Creditor of the said principal amount along with interest, in accordance with the covenants herein contained.

5. The Debtor and the Surety hereby declare that the said property is free from all encumbrances.

6. That it is hereby agreed and declared that in case of failure on the part of the Debtor to pay the instalments in time, the Creditor shall be entitled to dispose of the mortgaged property, in part or in full, to recover the principal amount and interest.

We, the above-noted parties, have signed this deed on the date and at the place mentioned above, after fully understanding the contents of this deed, in the presence of the following witnesses.

Name: ____________ Signature: ____________
Address: ____________
(Debtor)

Name: ____________ Signature: ____________
Address: ____________
(Surety)

Name: ____________ Signature: ____________
Address: ____________
(Creditor)

WITNESSES:
1. ________________________
2. ________________________

SCHEDULE OF PROPERTY
____________________________________________
(description of the mortgaged property)