DEED OF HYPOTHECATION OF BOOK DEBT AND ASSESTS OF BUSINESS TO SECURE ADVANCE
The ______________ Bank ______________ (hereinafter called “The Bank”) having at the request of ________________ (hereinafter called “The Borrower”) agreed to grant accommodation and facilities to the Borrower by the way of overdraft loan Cash Credit Account or otherwise under a drawing limit of Rupees _____________ on the Security hereof it is agreed as follows:
1. That the Borrower’s book debts outstanding moneys receivable claims and bills and other assets as are set out in the Schedule hereunder are hereby, and all present and future book debts outstanding moneys receivable claims and bills, and other assets the documents relating to which shall be handed to or come into the possession of the Bank, shall be hypothecated and charged to the Bank and its assigns by the way of first charge Security for:
a. The payment to the Bank on demand of all moneys which now are, or which at any time or times hereafter may become due and owing from the Borrower to the Bank, whether alone or in partnership with any person, firm or company by way of overdraft in current account or by way of loan or by way of cash credit with the Bank (including moneys owing upon any cheques, promissory notes or bills of exchange drawn, accepted or endorsed by the borrower or which shall have been paid for credit or the borrower either solely or jointly with another or others).
b. Interest on the money aforesaid from the respective dates from which the same shall be chargeable.
c. All costs (as between Attorney and Client) charges and expenses, if any, which the Bank may be entitled to add to its security.
d. And for the payment and discharge of all the Borrower’s present and future indebtedness and liabilities to the Bank of any kind in any manner whether solely or jointly primary or collateral accrued or accruing with all relative interest, charges, costs (as between attorney and client) and expenses payable to or incurred by the Bank in relation thereto.
2. That interest at the rate of ____ percent per annum ______ the Reserve Bank of India _____ rate from time to time _______ shall be calculated on the daily balance of accounts and charged in accordance with the practice of the Bank with monthly rests.
3. That on any default of the Borrower in payment of any money hereby secured or the performance of any obligation to the Bank under this or any other security or the occurrence of any circumstances in the opinion of the Bank endangering this or any other security the Bank shall be entitled at the Borrower’s risk and expense as Attorney for and in the name of the Borrowers or otherwise to take possession and/or appoint receiver of any debts or assets under this security give notices and demands to the Borrower and third parties liable therefore sue for recovery receipts and give receipts for the same and sell or realise by public auction or private contract or otherwise dispose of all or any part or such debts or assets and enforce settle compromise submit to arbitration or deal in any manner with any debts or claims under this security without being bound to exercise any of these powers or liable for any loss in the exercise thereof the Borrower undertaking to transfer and deliver to the Bank all relative documents and papers and agreeing to accept the Bank’s accounts of receipt from realizations under this security and to pay shortfall or deficiency thereby shown. Provided also that subject to these powers of the Bank, the Borrowers may with approval of the Bank deal with the said debts and assets in due course of business on the express understanding that the same and all proceeds thereof and documents therefore are always kept distinguishable and held as the Bank’s exclusive property specifically appropriated to this security to be dealt with only under the direction of the Bank.
4. That nothing herein shall prejudice the Bank’s rights or remedies in respect of any present or future security guarantee obligation or decree for any indebtedness or liability of the Borrower to the Bank.
5. All account sales rendered to the Borrower by the Bank shall conclusive evidence both in and out of court of matters therein stated.
6. The Borrower agrees to execute on demand by the Bank such further documents as may be required by the Bank to vest the said securities or any of them in the Bank and to render the same readily realizable or transferable by the Bank at any time.
7. The Borrower also agrees that notwithstanding anything hereinbefore contained the Bank shall not be bound to allow or to continue the Borrower’s overdraft or current or loan or cash credit account or to grant to the Borrower any financial or other facilities or accommodation to any extent or for any time further than the Bank shall in its absolute discretion see fit to do but in no circumstances to an amount at any time exceeding with interest thereon the sum of Rupees _________.
8. The Borrower hereby declares that the securities shall always be the Borrower’s absolute property at the Borrower’s sole disposal and free from any prior charge or encumbrance and that all future debts and assets hereunder shall be likewise the unencumbered absolute and disposable property of the Borrower and declares that nothing herein shall operate to prejudice the Bank’s rights or remedies in respect of any present or future security guarantee obligation or decree for any indebtedness or liability of the Borrower to the Bank.
9. The Security hereby constituted is to operate as a continuing security for all sums due or owing to the Bank at any time and in the event of the Borrower’s current account loan or cash credit or any other account with the Bank running to a credit balance at any time the Bank’s security hereunder shall still continue and the Borrower shall still be liable for all sums due or contingently due on any account whatsoever.
10. That if the Borrower be more than one individual all shall be bound hereby jointly and severally and if the Borrower shall be a Firm such Firm and all members from time to time thereof shall be bound thereby notwithstanding any changes in the constitution or style thereof and whether the Firm shall consist of or be reduced to one individual.
11. That if and whenever this security shall be held by the Bank for the Borrower’s liability for any third party’s obligations to the Bank, the bank shall be free without reference to the Borrower to deal with the principal debtor and any securities obligations or decrees and generally to act as if the Borrower were primarily liable and the Borrower hereby waives all surety ship rights in relation thereto.
12. Any notice by way of request demand or otherwise hereunder may be given by the Bank to the Borrower or any of the individuals constituting the Borrower personally or may be left at the last known place of business residence in India of the Borrower or any of such individuals or may be sent by post to the Borrower or any of such individuals addressed as aforesaid and if sent by post it shall be deemed to have been given at the time when it would be delivered in due course of post and in proving such notice when given by post it shall be sufficient to prove that the envelope containing the notice was posted and a certificate signed by an official of the Bank that the envelope was so posted shall conclusive.