BOND WITH SURETIES FOR A LOAN REPAYABLE IN EQUATED INSTALLMENT WITH HYPOTHECATION OF PROPERTY
THIS DEED is made on the ................... day of .............20………. BETWEEN AB, etc. (hereinafter called “the borrower”) of the FIRST PART AND CD, etc., (first surety) and EF, etc (second surety) (hereinafter collectively referred to as the “sureties”) of the second part AND GH, etc., (hereinafter called “the creditor”) of the THIRD PART;
Whereas the borrower has requested the creditor for the advance of a loan of Rs. . ................... repayable with interest at ................... per cent per annum by installments hereinafter specified;
And, whereas the sureties have agreed to give security for the repayment of such loan in the manner hereinafter appearing, and the creditor has agreed to advance such loan on such security.
NOW THIS DEED WITNESSES as follows:
1. Covenants
In pursuance of the said agreement and in consideration of the sum of Rs. … advanced by the creditor to the borrower (the receipt of which is hereby acknowledged) the borrower and the sureties hereby jointly and severally covenant with the creditors as follows:
(i) To pay in installments.
The borrower and the sureties will pay to the creditor the said sum of Rs........... with interest thereon at the rate of ................... per cent annum computed from the date hereof by four, half yearly installments of principal and interest combined of Rs. . ................... each payable on the following dates:
Installment...................Due Date
First installment
Second installment
Third installment
Fourth installment
(ii) Penalty for default
If any of the installments aforesaid shall be in arrears in whole or part, the whole sum then remaining due to the creditor under this deed on account of principal and interest shall thereupon become payable at once and the borrower and the sureties will be liable jointly and severally to pay the same.
2. Hypothecation
For the consideration aforesaid and in further pursuance of the aforesaid agreement the borrower/first surety/second surety1 hereby grant(s) and transfer(s) by way of simple mortgage to the creditor all that property described in the schedule hereto, to the intent that the said property hereby mortgaged shall remain and be charged by way of simple mortgage as security for the payment to the creditor of the said principal money and interest in accordance with the covenants herein contained.
3. Covenant of no Charge
The said borrower/ first surety/second surety hereby covenant(s) with the creditor that the said property is free from encumbrances.
4. Enforcement of Mor tgagee’s Remedies
It is hereby agreed and declared that in case of default in the payment of such sums on account of principal and interest as may become due under the covenant hereinbefore contained and creditor may forthwith enforce against the said property hereby mortgaged or any part thereof, all or any of the remedies of the holder of a simple mortgage.
IN WITNESS, etc.
