Agreement For Cash Credit Facility Negotiable Instruments Act 1314 - Legal Draft

...............hereinafter referred to as "the Bank" of the one part and M/s. ABC Co. Pvt. Ltd. (a private limited company) registered under the Companies Act, 1956 and having its registered office at ................ hereinafter referred to as the Company] of the other part.
WHEREAS.
(1) The Company is carrying a business of .................      
(2) The Bank is acting as the bankers of the company and the Company has current/saving accounts with the Bank at its branch office at
(3) The company has requested the Bank to allow the Company to open a cash credit account with the said branch office with a maximum facility to draw moneys to extent of Rs ........... and which the Bank has agreed to do on the following terms and conditions agreed upon between the parties.
Now this agreement between the parties hereto witnesseth as follows:
(1) The Bank agrees to allow the Company to open a cash credit account in the name of the Company with the Bank's said branch office and to allow the Company to have credit facilities to the maximum limit of Rs       including the interest and other banking charges payable by the company to the Bank according to the Bank's rules and practice.
(2) The said account will be operated by the office- bearers of the Company as may be decided by the Board of Directors from time to time and the Company shall furnish to the Bank a true copy of the resolution certified by the Chairman as such from time to time. The Bank will charge interest at the rate of Rs   percent per annum on the daily balance due by the Company at the foot of the said account and the same will be chargeable to the said account on the last working day of each month and will be treated as a part of the principal and the same will carry interest at the said rate by way of compound interest.
(3) As a security for the amount due and payable to the Bank at the foot of the said cash credit account the Company shall hypothecate to the Bank all the goods manufactured and under process of manufacturing, raw materials and all other movable articles and things lying for the time being in the factory premises of the Company at ...... and the Company shall simultaneously with the execution of this agreement execute a letter of hypothecation in favour of and as required by the Bank.
(4) The Company shall also execute a promissory note in favour of the Bank promising to pay the amount due and payable at the foot of the said account at any time on demand with interest at the rate aforesaid, alongwith the execution of this agreement.
(5) The Company shall not be entitled to claim any interest on the amount if any found to the credit of the Company in the said cash credit account.
(6) Notwithstanding anything contained herein to the contrary, the Bank shall be entitled at any time to stop payment of any advance to the Company in the said account without stating any reason and without previous notice to the Company, even if the said maximum
limit of withdrawal has not been availed of by the Company.
(7) The Bank will be entitled to recall payment of the amount due and payable by the Company at the foot of the said account at any time without assigning any reason and the Company shall pay on demand forthwith.
(8) If the Company fails to pay the amount due and payable at the foot of the said amount on demand as aforesaid the Bank will be entitled to take necessary legal procedure in appropriate Court or Tribunal to recover the same including the enforcement of the said security by way of hypothecation and the Company shall be liable to pay all costs, charges and expenses incurred by the Bank in that behalf.
In witness whereas the parties have put their hands and seals the year and day first hereafter written.

Signed for and on behalf of the above
named Bank by its Manager Mr    
duly authorised in the presence of      

Signed for and on behalf of the abovenamed
company by its Managing Director Mr     
duly authorised by the resolution of the
Board of Directors dated        
in the presence of