Deed Of English Mortgage (for Corporate Sector) Deeds Mortgages And Pledges 1624 - Legal Draft

............between A B & CO. Limited, a Company registered under the Companies Act, 1956, and having its Registered Office at ...................... hereinafter
referred to as "the Company" of the One Part and .................... a Banking Corporation constituted under the Banking Companies (Acquisition and Transfer of Undertaking ) Act, 1970, hereinafter referred to as "the Bank" of the Other Part;
WHEREAS:-
1. The Company is a Public Limited Company incorporated and registered under the Companies Act, 1956.
2. The Company has for its objects inter alia, the carrying on of the business of manufacturing and dealing in ..............................
3. The authorised capital of the Company consists of Rs ............. divided into .................... equity shares of Rs ............ each and the subscribed and paid up Capital of the Company is Rs ..................
4. The Company with a view to expanding its business of manufacturing of has purchased a piece of land at more particularly described in the First Schedule hereunder written and proposes to construct necessary buildings, erect Plant and install machinery for such business.
5. With a view to meet the cost of the said project, the Company applied to the Bank for a term loan of Rs and the same has been sanctioned by the Bank on certain terms and conditions and on the repayment of the said loan being secured by a first charge by way of mortgage on the said piece of land together with all buildings constructed and to be constructed thereon and the Plant to be erected thereon and all the machinery to be installed therein and on the terms and conditions hereinafter appearing.
6. The Bank has requested the Company to execute these presents.
NOW THIS DEED WITNESSETH as follows : -

1. Covenant to pay a loan : That in pursuance of the said Agreement and in consideration of the sum of Rs (Rupees) at or before the execution of these presents lent and advanced
by the Bank to the Company (receipt whereof the Company doth hereby acknowledged) and in consideration of the covenant by the Bank to advance the remaining amount of Rs .......... in the manner hereinafter appearing the Company hereby covenants with the Bank that the Company will pay to the Bank in (name of city) the said sum of Rs .......... or so much thereof as will be actually advanced by the Bank, on the ............. day of 19 ..... (hereinafter referred to as "the due date" which expression shall also mean the date on which the amount hereby secured becomes due and payable under or by virtue of any of the terms of these presents irrespective of whether the said date has expired or not.)

2. Covenant for further advance : And the Bank doth hereby covenant with the Company that the Bank shall advance the remaining amount of Rs ........... by making payments direct to the erectors of the Plant and the suppliers or manufacturers of the machinery and equipment proposed to be purchased by the Company and when the machinery and equipment will be delivered to the Company and the Plant erected each such payment being equal to ..... % of the value of the Plant, machinery and equipment so purchased by the Company and the Bank shall also advance out of the remaining amount of Rs .............. towards the cost of construction of the buildings and structures to be constructed on the said land described in the First Schedule as required by the Company against a certificate issued by the Architect of the Company that the work of construction done till the issue of the first certificate, and the work done till the issue of each new succeeding certificate since the issue of the previous certificate, has been of a particular value and the Bank will advance each time only an amount as would be equal to ..................% of such value certified by the Architect.
3. Covenant to pay interest: The Company will in the meantime pay to the Bank interest on the said amount of Rs ............. or such part thereof as will be advanced by the Bank as hereinabove provided at the rate of ............. % per annum from the date of actual payment of the amount agreed to be advanced, by quarterly rests, the first of such payments to be made on the day of now next and the subsequent payments to be made regularly at the expiration of every three months and will also pay thereafter in case and so long as the said principal sum of Rs ............. or any part thereof shall remain unpaid to the Bank interests on the same or for so much thereof as shall for the time being remain unpaid at the rate of ............. % (per cent) per annum by quarterly rests on the .......... day of each and every quarter in the manner aforesaid,
4. Covenant to pay compound interest : AND IT IS HEREBY AGREED AND DECLARED that
(i) if default shall be made in payment of any one instalment of interest hereby reserved or any part thereof at the respective times hereinbefore appointed in that behalf then and in every such case the unpaid instalment of interest or part thereof shall be added to the Mortgage debt for the time being then due as or in the nature of a further advance and shall thenceforth carry interest at the like rate of ........ % (per cent) per annum which shall be deemed to accrue due and payable from time to time on the respective days hereinbefore appointed for the payment of interest on the original principal sum so that by the addition and capitalisation of interest as aforesaid the total principal moneys hereby secured may be augmented upon the footing of an accumulation at compound interest computed at ..... % per annum with rests taken and made every quarter and that all such additions by way of capitalised interest (whether on the original principal sum or any interest added thereto as aforesaid) shall be chargeable upon the mortgaged premises and shall to all intents and purposes be within the scope and operation of the original principal sum or any interest added thereto as aforesaid;
(ii) that the aforesaid provisions shall not in any way be deemed to authorise the Company to refuse to pay any interest or allow any interest to fail in arrears unless permitted to do so by the Bank or shall not in anywise interfere with or prejudice limit, or affect the powers of sale under section 69 of the Transfer of Property Act or under these presents or of entry or any other powers or remedies for securing and enforcing payment of the Mortgage debt hereinafter contained and that the Company shall, notwithstanding the capitalisation thereof, upon demand, pay to the Bank any interest which shall be capitalised hereunder and any interest which shall accrue due thereon.
5. Grant of land and building : AND THIS DEED ALSO WITNESSETH that in further pursuance of the said agreement and for the consideration aforesaid the Company doth hereby grant, and transfer unto the Bank all the said piece of land together with the building and structures now standing or to be hereafter erected thereon or any part thereof and situated at ........... and more particularly described in the First Schedule hereunder
written together with all the things permanently attached thereto or standing thereon, and all its rights, liberties, privileges, easements, advantages and appurtenances whatsoever to the said land and premises or any part thereof belonging or in anywise appertaining or usually held or enjoyed or occupied therewith or reputed to belong or be appurtenant thereto and all the estate, right, title, interest, property claim and demand whatsoever of the Company and every part thereof TO HAVE AND TO HOLD the said lands and premises hereby granted or expressed so to be unto and to the use of the Bank absolutely subject to the provision for redemption hereinafter contained.
6. Transfer of moveable : AND THIS DEED FURTHER WITNESSETH that in consideration aforesaid the Company doth assign and transfer all and singular the engines, boilers, motors, machinery (whether fixed or moveable and whether attached to the said land and buildings described in the First Schedule hereunder written or not) plant, electric and other installations, implements, equipments, tools, utensils, appliances, accessories, articles, chattels and things, short particulars whereof are set out in the Second Schedule hereunder written, and all other plant, engines, machinery, boilers, motors, electric and other installations, implementations, equipments, tools, utensils, appliances, accessories, articles and things belonging to the Company and which may at any time hereafter during the continuance of this security be affixed, installed or erected or be brought in or placed in or upon the said land and buildings described in the First Schedule hereunder written by the Company for the purpose of its business and which may be lying elsewhere (which plant, and machinery and other articles and things hereby assigned as aforesaid are hereinafter for brevity's sake referred to as "the Plant") and all the estate, right, title and interest, claim and demand of the Company into and upon the said Plant or any part thereof TO HAVE AND TO HOLD the said Plant unto and to the use of the Company absolutely subject to the proviso for redemption hereinafter contained.
7. Transfer of book debts and goodwill : For the consideration aforesaid the Company doth hereby assign and transfer unto the Bank all the book debts owing to the company for the time being as per the books of account of the company and all that the goodwill of its business as merchants, traders, commission agents, importers, chemists, druggists, and manufacturers of and dealers in ............ TO HOLD the same unto and to the use of the Bank absolutely subject to the proviso for redemption hereinafter contained.
8. Covenant to repay loan : PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that if the Company shall pursuant to the covenant in that behalf hereinbefore contained pay to the Bank in . . . . . . .the said sum of Rs with interest for the same at the rate and in manner hereinbefore mentioned and also all other the moneys, costs, charges and expenses by law or under these presents payable by the Company to the Bank (hereinafter referred to as "the mortgage debt") then and in such case the Bank shall upon the request and at the costs, charges and expenses of the Company retransfer the said land and premises and plant described in the First and Second Schedules hereunder written and all other the premises hereby granted and assigned respectively or expressed so to be (hereinafter referred to as "the mortgaged premises") unto the company according to its rights and interest therein or as it may direct or if the Bank is not in possession of the mortgaged premises it shall if so required by the company or any encumbrancer and at the costs, charges, and expenses of the Company or such encumbrancer, assign the mortgage debt and transfer the mortgaged premises to such third person as the Company or such encumbrancer may direct and shall also deliver to the Company or such third person as the case may be, this Mortgage Deed and all documents relating to the mortgaged premises which shall be in the possession or power of the Bank.
9. Power of mortgagor to inspect title deeds and to recover possession : AND IT IS HEREBY FURTHER AGREED BY AND BETWEEN the parties hereto as follows --
(a) The Bank, so long as the aforesaid right of redemption subsists in the Company, shall allow the Company at all reasonable times at its request and at its own costs and on payment of the costs and expenses of the Bank in that behalf to inspect and make copies or abstracts of or extracts from the documents of title relating to the Mortgaged premises which shall be in the custody or power of the Bank.
10. Covenant of title etc. by mortgagor : AND the Company doth hereby covenant with the Bank that --
The Company now has good right and full power to grant and assign the said land and buildings the plant and other the premises hereby granted and transferred respectively or expressed so to be and every part thereof unto and to the use of the Bank in manner aforesaid.

THAT if default shall be made in payment of the said sum of Rs. .......... or interest thereon or any part thereof respectively on the days hereinbefore appointed for payment of the same respectively the Bank may at any time thereafter enter into and upon the mortgaged premises or any of them or any part thereof in the name of the whole and shall thenceforth quietly possess and enjoy the same and receive the rents, income and profits thereof without any lawful interruption or disturbance whatsoever by the Company or any person or persons lawfully claiming under it or any of them and shall, until the Company shall have tendered or deposited under section 83 of the Transfer of Property Act, 1882, the amount for the time being due under these presents, be at liberty (but under no obligation) to pay thereout the Government revenue and all other charges of a public nature and all rent (if any) accruing due in respect of the mortgaged premises during such possession and any arrears of rent in default of payment of which the land and premises may be summarily sold and all expenses incurred for The management of the mortgaged premises and the collection of rents income and profits and all other outgoings including costs of repairs (if any) of the mortgaged premises as agent of the Company with interest thereon at the rate provided under these presents and shall appropriate the net rents income and profits or the amount from time to time due to it on account of interest accruing due to it under the covenant hereinbefore contained in that behalf and if there be any surplus, shall appropriate the same in reduction or discharge of the principal of the Mortgage debt.

THAT it shall be lawful for the Bank at any time after taking possession of the Mortgaged premises to make improvements thereon as it may, in its discretion, think proper and the Company will on redemption pay the Bank the costs, thereof in addition to the mortgage debt with interest at the same rate as is payable on the principal amount due under these presents and that until such repayment the same shall be a charge upon the mortgaged premises and that the Bank shall not be accountable for or be liable to give credit for the profits (if any) accruing by reason of the said improvements. That in case the Bank enter into possession of the mortgaged premises, or any part thereof the Company shall be deemed to be the licensee of the Bank of the portion of the mortgaged premises occupied by it and the Company shall pay to the Bank reasonable occupational compensation and it shall be lawful for the Bank to eject the Company on giving one month's notice to quit.

THAT the said mortgaged premises are free and clear and freely and clearly and absolutely forever released and discharged or otherwise by the Company and well and sufficiently saved kept harmless and indemnified of and from and against all former and other estate, titles, charges and encumbrances whatsoever had made, executed occasioned or suffered by the Company or any other person or persons lawfully claiming or to claim by, from, under or in trust for the Company. That the Company and all persons having or lawfully claiming any estate or interest in the said mortgaged premises or any of them or any part thereof shall and will from time and time and at all times hereafter upon the request of the Bank and at the costs, during the continuance of this security, of the Company and afterwards, of the person requiring the same, do and execute or cause to be done and executed all such acts, deeds and things whatsoever for further and more perfectly assuring all or any of the said premises unto and to the use of the Bank in such manner aforesaid as shall or may be reasonably required.

That the Company shall from time to time and all times during the continuance of this security and whether the Bank shall have taken possession of the mortgaged premises under the power hereinbefore reserved to it or not, keep the mortgaged premises hereby granted and assigned or expressed so to be in a good and substantial state of repair and shall pay all the Government and Municipal revenue, ground rents, rates, rents
and taxes, assessments, dues and duties and all charges of a public nature including those (if any) in arrears payable in respect of the mortgaged premises immediately the same shall become due,

That the Company will, so long as any moneys shall remain due on the security of these presents, keep all the buildings and other structures (exclusive of the plinth and foundation thereof) Plant and machinery and other articles and things hereby granted and assigned respectively or expressed so to be insured in some well-known and respectable Fire Insurance Company to be selected or approved of by the Bank against loss or damage by fire and riot in the sum equal to the full value of the mortgage security at the least for the sole benefit of the Bank and pay all premium and sums of moneys necessary for such purpose including the renewal of such policy at least eight days before the day on which the same respectively ought to be paid and will on demand deliver to the Bank policy or policies of such insurance and the receipt for every such payment duly endorsed and assigned with the full benefit thereof in favour of the Bank AND that the Company will not at any time hereafter during the continuance of any such insurance as aforesaid do any act or commit any default whereby the said insurance may be rendered void or voidable or an increased premium become payable therefor AND shall and will, in case at any time during the continuance of this security the said insurance shall by any means become void or voidable, forthwith at its own costs, effect new insurance in lieu of such void or voidable insurance in the name of the Bank in the same sum as aforesaid AND that if default shall be made in insuring or keeping the said premises insured as aforesaid then and so often as the same shall happen it shall be lawful (but not obligatory) for the Bank on giving 24 hours' notice to insure and keep insured the mortgaged premises in any sum not exceeding the full value of the mortgaged security AND that the Company will on demand repay to the Bank every sum of money, expended for that purpose by it with interest thereon at the rate and with the rests as aforesaid from the time of the same respectively having been so expended and that until such repayment the same shall be a charge upon the mortgaged premises hereby granted, assigned and assured respectively or expressed so to be and that all sums of money received under or by virtue of any such insurance as aforesaid shall be at the option of the Bank either be forthwith applied in or towards substantially rebuilding reinstating and repairing the said mortgaged premises or any part thereof or in or towards the payment of the principal money and interest for the time being remaining due on the security of these presents provided however that, if the Bank shall at the time be in the possession of the mortgaged premises the Bank shall, in case of such loss or damage, apply any money which it may actually receive under the policy, or so much thereof as may be necessary, in reduction or discharge of the Mortgage debt.

That in the event of any damage happening to the mortgaged premises or any part thereof hereby granted and assigned respectively or expressed so to be by fire, flood, tempest, earthquake, lightening, rain, riot or otherwise howsoever at any time or times after the execution hereof or if any event shall happen so as, in the opinion of the Bank to materially impair the security hereby created or if the Company is ordered to be wound up or if interest on the present security amounting atleast to Rs ............. shall be in arrears and remains unpaid for three months after becoming due or if any default shall be committed by the Company in the performance of any of the covenants herein contained and on the part of the Company to be observed and performed and not remedied by the Company within a reasonable time from the receipt of a written notice from the Bank or if a trustee is appointed or execution is levied upon the said premises or any part thereof and not raised within twenty one days or a Receiver be appointed thereof and is not discharged within twenty one days then and in any of the aforesaid cases, notwithstanding anything herein contained to the contrary, the whole of the Mortgage debt shall at the option of the Bank become immediately payable as if the due date had elapsed and the security hereby constituted shall, at the option of the Bank, become immediately enforceable AND in such case all such rights and remedies shall be available to the Bank as would be available to it under the terms of these presents or by law upon default being made in payment of the principal money and interest hereby secured.

11. Power to appoint Receiver : AND IT IS HEREBY FURTHER AGREED AND DECLARED that in consideration of the premises it shall be lawful for the Bank (in addition to any other powers hereby conferred on the Bank) without any further consent or concurrence of the company to appoint by writing signed by the Bank or on its behalf any person as the
Bank thinks fit to be the Receiver from time to time in the name of the Company or otherwise to receive the rent, income and profits of the mortgaged premises hereby granted, and assigned respectively and every part thereof from the present and future tenants and occupiers thereof and the persons liable to pay the same respectively and in case of non-payment thereof to use all or any lawful remedies for recovering and obtaining payment of the same and to do all things necessary or proper for recovering and receiving the same as fully and effectually as the Company could do AND the Company doth hereby direct the present and future tenants and occupiers of the said mortgaged premises if any respectively and the persons liable to pay the same, to pay the rents and profits of the said premises unto the said Receiver and to any future Receiver to be appointed
as hereinafter mentioned.
12. Power of Receiver : AND IT IS HEREBY FURTHER AGREED AND DECLARED THAT
(a) The receipt of the said Receiver for the time being shall be an effectual discharge to such tenants, occupiers and persons for such rents and profits;
(b) The said Receiver shall have power to make such allowances to and arrangements with such tenants, occupiers and other persons as he shall think fit and to give notice to quit and bring and take actions or proceedings for ejectment or recovery of possession of any of the said premises on the expiration or determination or forfeiture of any tenancy or otherwise and to relent the said premises or any part thereof from time to time to such person or persons as he shall think fit on yearly or monthly tenancies at the best rents which may be reasonably obtain able.
(c) That the said Receiver shall, by and out of all moneys received by him in the first place pay all rents, taxes, and revenue, rates, assessments, and outgoings whatsoever affecting the mortgaged premises and which shall not be otherwise paid and the expenses of repairing or insuring against loss or damage by fire or riot, any building or other property which he may think fit to repair or insure and in the next place pay the expenses of collection and management and deduct and retain for his own use so much not exceeding Rs.5/- for every Rs.100/- received as in the opinion of the Bank the said Receiver shall be reasonably entitled to for his trouble and in the next place pay to the Bank by equal payments the interest from time to time accruing due on the security of these presents and shall allow the surplus if any of the said rents and profits to accumulate and when it amounts to Rs. 5,000/- pay it to the Bank in reduction of the principal amount due to the Bank and shall pay the residue (if any) of the money received by him to the person who, but for the possession of the Receiver, would have been entitled to receive the income of which he is appointed Receiver or who is otherwise entitled to the Mortgaged premises.
(d) That the said Receiver may be removed and a new Receiver may be appointed from time to time by writing signed by or on behalf of the Bank and the Company. That the Receiver shall be deemed to be in all respects the agent of the Company and that the Company shall be solely responsible for the acts or defaults of the Receiver and the Bank shall not under any circumstances be answerable for any loss or misapplication of the said rents and profits or any part thereof by reason of any default neglect or breach of trust of or by the said Receiver for the time being or for any other loss or damage occasioned by the acts or defaults of the said Receiver but that such loss, misapplication and damage and every Receiver's salary shall be wholly borne and paid by the Company. (e) That the aforesaid power of appointing Receiver conferred on the Bank shall not be exercised by the Bank unless and until notice in writing requiring payment of the principal moneys has been served on the Company and default has been made in payment of the principal money or any part thereof for the three months after such service, or some interest amounting to Rs. 500/ or more owing on the security of these presents shall be in arrears for three calender months after becoming due.
(f ) That no tenant or Receiver shall be concerned to inquire whether any case has happened to authorise him to act or otherwise as to the regularity of his appointment.
13. Power to appoint Receiver or take possession : AND IT IS HEREBY FURTHER AGREED that it shall be lawful for the Bank either to appoint a Receiver of the mortgaged premises or to enter into possession thereof as it may think fit.
14. Power to sell : AND IT IS HEREBY AGREED AND DECLARED that without prejudice to all other rights of the Bank according to law or under these presents it shall be lawful for the Bank or any person acting on its behalf at any time or times hereafter as well before as after due date without any further consent on the part of the Company to sell or to concur in the sale of the Mortgaged premises hereby granted, and assigned respectively or expressed so to be or any of them or any part or parts thereof without the intervention of the Court and either together or in parcels or lots and either by public auction or private contract and either with or without any special conditions or stipulations relative to title or evidence or commencement of title or otherwise which may be deemed proper by the Bank with power to postpone such sale from time to time and to buy in the said Mortgaged premises or any part thereof at any sale, by public auction or private contract and either with or without any special conditions or stipulations relative to title or evidence or commencement of title or otherwise which may be deemed proper by the Bank or to rescind or vary any contract for the sale thereof and to resell the same from time to time without being answerable or responsible for any loss or diminution occasioned thereby AND for the purposes aforesaid or any of them to make agreement, execute assurances, give effectual receipts, or discharges for the purchase, money and do all other acts and things for completing the sale which the person or persons exercising the power of sale shall think proper AND the aforesaid power shall be deemed to be a power to sell or concur in selling without the intervention of the Court within the meaning of section 69 of the Transfer of Property Act, 1882, and all the powers and provisions contained in that section will apply as if the provisions of that section are incorporated in these presents.
PROVIDED ALWAYS AND IT IS HEREBY FURTHER AGREED AND DECLARED that the power of the sale hereinabove contained shall not be exercised by the Bank unless and until --
default shall have been made in payment of the Mortgage debt or any part thereof on the due date and for the space of three calendar months next after a notice in writing required by section 69 sub-section (2) of the Transfer of Property Act and requiring payment of the principal money or such parts thereof as may for the time being be due shall have been served on the Company, or, unless and until interest amounting at least to five hundred Rupees shall be in arrears and remain unpaid for three months after becoming due notwithstanding the provision for capitalisation of interest hereinbefore contained;
AND IT IS HEREBY AGREED AND DECLARED that any such notice as aforesaid shall be sufficient and valid although dated and served on any day before the due date and that any such notice as aforesaid as well as any other notice required to be served upon the Company shall be deemed to have been duly served on the Company by sending the same through Post addressed to its Registered Office in ...or elsewhere (and for the purpose of this power any notice addressed to the Company at its registered address shall be sufficient) or by leaving or affixing the same upon or to some part of the mortgaged premises and such notice shall be deemed to have been made at the time the same was left on the mortgaged premises as aforesaid or at the time at which the registered letter would in the ordinary course of post be delivered and any such notice as aforesaid shall be sufficient and valid although not addressed to any person or persons by name or description and notwithstanding the person or any of the persons affected thereby may be unborn, unascertained or under disability.

15. Other powers of Mortgagee Bank : AND IT IS HEREBY FURTHER AGREED AND DECLARED AS FOLLOWS -
(a) That in the event of the mortgaged premises or any part thereof or any interest therein being sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such premises and provided such failure shall not have arisen from any default of the Bank then and in every such case, the Bank shall be entitled to claim payment of the mortgage money, in whole or in part out of the surplus of the sale proceeds remaining after payment of the arrears and of all charges and deduction directed by law.
(b) That on the mortgaged premises or any of them or any portion thereof or any interest therein being at any time acquired by the Government of India or by the State or by any Municipal Corporation or by any other public body for a public purpose the Bank shall, notwithstanding that the principal money on the mortgage shall not have become due, be entitled to receive the compensation to which the Company may be entitled or declared entitled and to apply the same or a sufficient portion thereof towards repayment of the moneys for the time being due under these presents including interest in lieu of notice and all proceedings for ascertainment and apportionment of the compensation payable for the said land and premises shall be conducted by the Company through the advocates, and architects of the Bank but if the Company does not do so then the Bank shall be entitled to engage another advocate and architect and the Company shall repay on demand to the Bank all costs, charges and expenses that may be incurred by the Bank with interest thereon at the rate aforesaid from the time of the same having been so incurred and that until such repayment the same shall be a charge upon the mortgaged premises.
(c) That in all proceedings in Courts of law or Tribunals or before any public or authorised officer wherein the Bank shall be entitled or required to appear or take part the Bank shall be entitled to appear by advocates and all costs, charges and expenses incurred by the Bank shall be repaid by the Company with interest at the rate aforesaid and such moneys and interest shall be a charge on the mortgaged premises as if the same has been originally advanced under these presents.
(d) That the Company will pay all costs, charges and expenses in anywise incurred or made by the Bank of and incidental to these presents or of and incidental to or in connection with the security as well for protection, security, assertion or defence of the rights of the Bank and for the realisation and recovery of the amount of the principal and interest secured by these presents or any part thereof or for the exercise of any of the powers contained in these presents and the same shall be paid on demand by the Company to the Bank with interest thereon at the rate aforesaid from the time of the same having been so incurred and that until such repayment the same shall be a charge upon the mortgaged premises provided that in the case of expenditure of money by the Bank for the preservation of the mortgaged premises from destruction, forfeiture or sale or for supporting the title of the Company to the mortgaged premises the Bank shall have first called upon the Company to take proper and timely steps to preserve the mortgaged premises or to support the title and the Company shall have failed to do so.

16. Undertaking by the Company: AND IT IS FURTHER AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS --- -
(a) That during the pendency of this security the Company shall not undertake any expansion scheme other than for the one for which the said loan is sanctioned and advanced by the Bank or create any charge on its assets without the prior written permission of the Bank.
(b) That the Company will not advance any moneys to any of the business concerns under its management or otherwise until the amount due to the Bank is paid in full.
(c) That the Company shall utilise the amount advanced by the Bank only in the construction of the buildings, erection of the plant and in the purchase of equipment and machinery required for the project undertaken by the Company.
(d) The Company also agrees and undertakes that it will not distribute the net profits without payment of the instalments for principal and interest due to the Bank in respect of the said loan. The Company will not without the written consent of the Bank first had and obtained remove the plant or any part or item thereof from the said land and buildings and in case of such removal shall replace the same by plant of equivalent nature
and equal value PROVIDED that, in the event of the Bank agreeing that any such part of the plant so removed as aforesaid is or has become redundant worn out or obsolete and need not be replaced, the same may be sold and the sale proceeds applied towards satisfaction or payment of the Mortgage debt.
(e) If the market value of any of the mortgaged premises depreciates in the opinion of the valuers or assessors appointed in the manner hereinafter mentioned by such percentage of its present value as the Bank may from time to time decide and if further security to the satisfaction of the Bank be not given to the Bank then and in such case the Company shall within a period of three months from written notice to that effect being given by the Bank reduce its indebtedness to the Bank to an amount which shall bear the same proportion to the then reduced market value of the mortgaged premises as the loan hereby secured bears to the present market value of the mortgaged premises PROVIDED that for the purpose of this sub - clause the Bank shall have the right at any time to engage competent valuers or assessors at the expenses of the Company and the valuation which such valuers or assessors may make in respect of the mortgaged premises shall be final and conclusively binding upon the Company.
(f) The Company shall give all information and assistance as may be required by the Bank or any person appointed by it in relation to the business of the Company or its accounting and other arrangements or regarding the loan advanced by it and the use made of such loan.
(g) If the Bank desires to appoint any other person not in its full time employment for the above purpose, the Bank shall not appoint a person to whose appointment the Company has any objection.
(h) The Company shall keep or cause to be kept a separate account of the said principal sum in the books of account of the Company to be strictly utilised for the purposes for which the same has been lent and advanced and shall allow such account to be checked and inspected from time to time by the person appointed by the Bank by writing in that behalf.
(i) The Company shall carry on its said business of manufacturers of and dealers in with due diligence and to the best advantage.
(j) So far as the plant or any part thereof present as well as future belonging to the Company and forming part of the present security are concerned the Company shall not at any time during the continuance of this security create any mortgage, lien or charge by way of hypothecation, pledge or otherwise howsoever or other encumbrance of any kind whatsoever and that the Plant and all parts thereof shall remain and continue to remain free from any encumbrances whatsoever.
(k) The Company shall not distribute as dividend during any financial year, without the consent in writing of the Bank first had and obtained, so long as any installment of the principal sum or interest due and payable to the Bank remains due, any sum which exceeds or which when taken with any other sum already distributed as dividend during the same financial year exceeds 6 (six) per cent of the paid up capital of the Company as on the last day of the period in respect of which the dividend is distributed after deducting from such sum capital reserve and other funds and ignoring all payments made by the Company by way of income-tax, provided however, that the Bank shall not withhold such consent if the Company has performed and observed all the covenants and conditions contained in these presents;
(l) T he Company shall forthwith and from time to time as may be required by the Bank make such alterations or additions to the Articles of Association as may be necessary to conform to these presents;
(m) The Company shall during the currency of these presents always keep a minimum margin of 30 (thirty) per cent as regards the Plant and 50 (fifty) per cent as regards land and building between the present market value of the mortgaged premises exclusive of the goodwill and the amount of the outstanding loan with interest thereon;
(n) The Company shall utilise the sale proceeds that may be realised by it on sale of such portion of the existing Plant which may be replaced by more modern plant, towards repayment of the amount due to the Bank under these presents and for no other purpose;
(o) The Company shall whenever considered necessary or advisable by the Bank permit such technical inspection and agree to such technical consultations as the Bank may require from time to time for the installation and efficient working of the plant during the currency of these presents and shall carry out all suggestions and directions that may be given by the Bank in that behalf and shall bear and pay all fees and expenses that may be incurred by the Bank for such inspections and consultations and the carrying out of all such suggestions and directions and all such fees and expenses together with interest thereon at the said rate of .......... per cent per annum shall until repayment be a charge upon the mortgaged premises and form part of the Mortgage debt and carry interest at the rate aforesaid;
(p) That during the currency of these presents the shareholdings of such of the shareholders in the Company who are its Directors at present shall not be substantially varied without the previous consent of the Bank first obtained.
Shri .........Managing Director, duly
authorised in that behalf in the presence of    
1 .
2.
Received the day and year first hereinabove written of and from the within -named Bank a sum of Rs................ out of the total advance of Rs ................ as within mentioned
Witnesses       
We say received ..................
For (Company)