Legal charge of building under construction with the amount of loan to be advanced
___________________________________________________________________________ (hereinafter referred to as the “borrower”)
___________________________________________________________________________ (hereinafter referred to as the “lender”).
(1) The borrower is the absolute owner in possession free from encumbrances of the property hereinafter described.
(2) The borrower intends [or has commenced] to erect upon the said property a house and outbuildings as specified in specifications set out in the schedule hereto at a prime cost of not less than Rs…………..
(3) The borrower has obtained all necessary planning approval and other consents in respect of the said house and buildings.
(4) The borrower requires an immediate advance of Rs……….to enable him to commence [or continue] the erection of the said house and outbuildings and may from time to time require advances for the completion of the same.
(5) The borrower has applied to the lender to advance to him Rs………for the purpose aforesaid which the lender has agreed to do upon repayment thereof with interest being secured in the manner hereinafter appearing.
(6) The lender has also agreed to make such further advances to the borrower if he shall so require as are hereinafter mentioned and upon the terms hereinafter contained.
NOW THIS DEED WITNESSETH as follows:
1. The lender will on the execution hereof advance to the borrower the sum of Rs……………..
2. If the borrower shall in the meantime strictly observe and perform all the agreements stipulations and conditions on his part herein contained but not otherwise then.
(1) When all the foundations and columns up to first roof level of the said house shall be erected [to the satisfaction of the lender’s architect] the lender will advance the sum of Rs………..
(2) When the roofs of the said house and outbuildings shall be fully completed, the external and internal walls shall be erected and the outer doors and window frames fitted [to the satisfaction of the said architect] the lender will advance to the borrower the further sum of Rs………….
(3) When the said house and outbuildings shall be fully completed so as to be fit for occupation [to the satisfaction of the said architect] the lender will advance to the borrower the further sum of Rs…………….
3. In consideration of the premises and in consideration of the sum of Rs…………paid by the lender to the borrower (the receipt whereof the borrower hereby acknowledges) the borrower hereby covenants that he will
(1) On the ………day of………next repay the said sum of Rs………….. [sum advanced on execution hereof] to the lender with interest thereon in the meanwhile at the rate of…..per cent per annum;
(2) On such one of the days hereinafter appointed for the payment of interest as shall next happen after any further advance shall be made by the lender under the provisions hereinbefore contained repay to the lender such further advance together with interest thereon in the meantime at the rate aforesaid and also all surveyor’s and architect’s fees and other expenses incurred by the lender in relation to this security and not theretofore repaid to the lender;
(3) If the said sum of Rs………or any such further advance or any such fees and expenses as aforesaid shall not be repaid to the lender on the day hereinbefore appointed for payment thereof respectively then the borrower will thereafter pay to the lender interest at the rate aforesaid on the principal monies fees and expenses from time to time remaining unpaid on the security of this deed by equal quarterly [or half-yearly] payments on the……….in each year until the whole of the said monies shall be repaid.
(4) For the consideration aforesaid the borrower as beneficial owner hereby charges by way of legal mortgage all that [description of property] and all buildings now or hereafter to be erected thereon with the payment in accordance with the covenants herein contained of all principal moneyinterest and other money hereby covenanted to be paid by the borrower [subject only to the proviso for redemption hereinafter contained].
(5) If the borrower shall on the……….day of………..next pay to the lender the sum of Rs……….and shall likewise pay to him on the days on which the same respectively ought to be paid under the foregoing covenant in that behalf any further sums which may be advanced by the lender to the borrower under the covenant in that behalf herein contained and all other monies hereby secured with interest in each case as herein provided the lender will at the request and cost of the borrower duly discharge this security.
(6) The borrower hereby covenants with the lender as follows:
(1) The borrower will during the continuance of this security and of the policy or policies next hereinafter mentioned produce on demand by the lender the policy or policies of insurance against fire and otherwise effected in accordance with the building contract dated……….. and made between the borrower of the one part and [builders] of the other part and the receipt for each premium paid in respect thereof;
[Or The borrower will in the joint names of the borrower and lender insure against loss and damage by fire for the full value thereof [plus […………] per cent to cover architect’s and surveyor’s fees] all work executed and materials and goods upon the land hereby charged and shall keep such work materials and goods so insured until the said building is completed within the meaning of clause 2(3) hereof. Such insurance shall be with [insurance company] and the policy and premium receipts shall as and when received by the borrower be deposited with the lender. If the borrower shall make default in securing such insurance the lender may insure as aforesaid and if the borrower shall make default in the payment of any premiums the lender may pay the same and in every such case all premiums and every other sum paid by the lender shall be subject to the provisions of clause 13 hereof. All monies received under such policies shall be expended in the rebuilding repairing and replacement of the buildings and the goods and materials insured and any money not so expended shall be paid to the lender and applied in the reduction of the principal money hereby secured]
(2) The borrower will immediately upon the completion of the said house and outbuildings and so long as any money remains unpaid on this security keep the buildings for the time being comprised herein insured in the joint names of the lender and the borrower against loss or damage by fire to the full insurable value thereof with [insurance company] and will make all payments required forthat purpose within …..days after the same shall become due and will when required by the lender deliver to him the policy or policies of such insurance and the receipt for each payment made thereunder. If the borrower shall fail to perform any of his obligations under this sub-clause the lender may thereunder insure the said house and buildings or any of them in any sum or sums not exceeding in the aggregate the full insurable value of the house or buildings thus insured and all payments costs and expenses so incurred by the lender shall be subject to the provisions of clause 13 hereof. All monies received by virtue of such insurance shall be applied in the first place in the making good of the loss or damage in respect of which the same shall have been received and in so far as they are not so applied in reduction of the principal money hereby secured.
If at any time the borrower is entitled to the benefit of an insurance on the said house and buildings which is not effected or maintained in pursuance of this obligation then all monies received by virtue of such insurance shall if the lender so requires be applied at the option of the lender in making good the loss or damage in respect of which the same shall have been received or be paid to the lender and be applied by him in reduction of the principal money hereby secured;
(3) The borrower will so long as any money remains unpaid on this security keep the house and buildings for the time being comprised herein in good repair and if the borrower shall fail to do so the lender shall thereupon be entitled to enter upon the premises or any part thereof and execute such repairs as may be necessary or proper without becoming liable as mortgagee in possession and all payments costs and expenses including costs of architect or surveyor incurred by the lender shall be subject to the provisions of clause 13 hereof;
For the purpose of ascertaining whether the said house and buildings are for the time being in good condition and repair the lender may from time to time cause the same to be surveyed by a competent surveyor appointed by the lender and such surveyor may without rendering the lender liable as a mortgagee in possession at all reasonable times enter upon the said house and buildings or any part thereof for the purpose of making a survey of the same and the certificate of such surveyor shall be conclusive as to the state of repair of the said house and buildings and as to what repairs are necessary and proper. All costs and expenses incurred under this provision shall be subject to the provisions of cause 13 hereof;
(4) The borrower will during the continuance of this security perform and observe all the covenants and restrictions as to building on or user of the property hereby charged or any part thereof contained in a conveyance dated……….and made between [parties] or otherwise validly in force in respect thereof and will keep the lender indemnified against all proceedings claims costs and expenses on account of any breach of such covenants or restrictions and any damages costs and expenses incurred by the lender in relation to any such breach shall be subject to the provisions of clause 13 hereof.
7. The borrower further covenants with the lender as follows:
(1) The borrower will diligently proceed with the erection of the said house and buildings and complete the same fit for occupation within the meaning of clause 2(3) hereof on or before………and shall apply all monies advanced by the lender from time to time hereunder for that purpose and for none other;
(2) The borrower will expend in the creation of the house and buildings not less than the sum of Rs………… [the sum named in the said contract dated………];
(3) The borrower will not without the previous consent in writing of the lender carry out or suffer or permit to be carried out any operation or construction of the said building in deviation of the sanctioned plan. If any such deviation to which the appropriate authority has not consented is carried out all and every or any of the powers and remedies conferred on mortgagees by the Transfer of Property Act, 1882 shall become immediately exercisable by the lender;
(4) The borrower will forthwith produce to the lender any order direction requisition permission notice or other matter whatsoever affecting or likely to affect the said house land and buildings and served upon the borrower by any third party and allow the lender to make a copy thereof;
(5) The borrower if he shall at any time obtain permission for any development within the provisions of the West Bengal Town and Country (Planning and Development) Act, 1979 of the said house and buildings will comply with all conditions subject to which such permission is granted;
(6) If any valid enforcement or other notice or order shall be made or served by a competent authority under or by virtue of the West Bengal Town and Country (Planning and Development) Act, 1979 requiring the discontinuance of or imposing conditions on any use of the said house and buildings or any part thereof or requiring the removal or alteration of any works or buildings thereon theborrower will at his own expense in all respects comply with the requirements of any such notice or order within any time which may be specified therein for compliance therewith or within a period of three months from the date thereof whichever is the shorter;
(7) In the event of the borrower failing to comply with any requirement of any competent authority made under the West Bengal Town and Country (Planning and Development) Act, 1979 or other statutory enactment the lender may in so far as the same may be necessary to comply with such requirement enter upon the said house land and buildings or any part thereof and execute any works and do anything thereon necessary to ensure such compliance upon giving the borrower [……….] days’ previous notice in writing of the intention so to do and all costs and expenses so incurred by the lender shall be subject to the provisions of clause 13 hereof;
(8) The borrower hereby irrevocably appoints the lender and his substitutes for the time being to be his attorney to apply for and procure on his behalf any licences permissions or other things from any competent authority necessary for the execution of the repairs and other works hereby authorised to be executed by the lender on the default of the borrower;
(9) All expenses incurred by the lender in securing the said licences permissions and other things shall be treated as part of the cost of the said repairs and such expenses and interest thereon shall be subject to the provisions of clause 13 hereof.
8. The power of sale and the power of appointing a receiver conferred on mortgagees by the Transfer of Property Act, 1882 shall in relation to this security be modified as follows:
The said powers shall be exercisable without the necessity of giving any previous notice in that behalf and although no part of the principal money or interest hereby secured shall have become due in any of the following cases;
(a) If the borrower shall have any judgment or order of any court executed against his property;
(b) If the borrower shall commit any breach of the stipulations herein contained and on his part to be observed and performed;
(c) As stated in clause 7(3) hereof. 9. If and when the said power of sale shall become exercisable it shall be lawful for the lender to enter upon and take possession of the said plots or any of them and of all buildings and erections and fixtures whatsoever therein and if the said house and buildings shall then be unfinished to complete the same in accordance with any building contract or agreement then in force but with liberty to agree with the builder or any other person interested in such contract or agreement to any modification thereof. For the purposes of this clause the lender shall be at liberty to employ an archited surveyor contractors builders workmen and others and purchase all proper materials as he may in his absolute discretion deem fit. All monies expended by the leader in pursuance of this clause shall be subject to the provisions of clause 11 hereof.
10. During the continuance of this security the borrower shall not without the conset in writing of the lender grant or agree to grant any lease or tenancy of the mortgaged property or of any part thereof or accept or agree to accept any surrender of a lease or tenancy thereof. 11. Where any sum of money expended or to be expended by the lender is herein said to be subject to the provisions of clause
11 hereof that sum or those sums of money shall be payable by the borrower to the lender on demand and the borrower hereby covenants from the date of such demand until repayment to pay interest on all such monies not so paid on demand at the rate applicable to the principal sum hereby secured and all such sums of money and interest thereon shall be charged on the property hereby charged and in respect of all costs and expenses arising hereunder or in any way relating to the charge hereby created the lender shall so far as the law allows and subject to any order of the court be entitled to and receive from the borrower a full indemnity in respect thereof.
12. In this deed where the context so permits the terms “the borrower” and “the lender” shall include the persons deriving title under them and all reference to the West Bengal Town and Country (Planning and Development) Act, 1979 shall include all Acts amending or re-enacting the provisions thereof or to be construed therewith for the time being in force and all orders plans regulations permissions consents and directions made under or in pursuance of the said Acts or any of them.
[Specifications of house and outbuildings]
IN WITNESS etc.
[Signatures of borrower and lender]