HYPOTHECATION OF A CAR

 

Deed of Hypothecation made at ……………… this ….……………. day of between M/s………………… & Company 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 Bank of …………… a Scheduled Bank registered under the Companies Act, 1956 having its registered office at ..………………..... hereinafter referred to as the Bank of the other part

WHEREAS an order was placed with the manufacturer i.e. M/s……………………… for purchase Motorcar …..……….. (Description of the Car) and company as paid initial payment of Rs………….. to the manufacturer. AND WHEREAS the company has approached the Bank for a loan of rupees .……...... for payment of the balance price of the said car and to meet other incidental expenses which the Bank has agreed to do on the company agreeing to Hypothecate the said car with the Bank as security for repayment of the said loan and on the terms and conditions hereinafter recorded.

The Company hereby agrees and covenants with the Bank as follows -

(1) The Bank agreed to advance a sum of Rs……… to the company. The Bank shall pay the loan amount of Rs……… to the manufacturer directory on behalf the company. The Company covenants to repay the said total loan amount of rupees ………….. by monthly instalments of rupees ……………… for principal, the first instalment to be paid on the …………. day of ……………. and subsequent instalments on the ………………. day of each succeeding month until the whole of the said principal amount is paid in full.

(2) In the meanwhile the Company shall pay interest on the said amount of the principal at the rate of …………….. percent. per month, payable monthly along with the instalment of the principal amount as aforementioned.

(3) If the company makes default in payment of interest in any month such a defaulted instalment will carry interest at the same rate by way of compound interest as if the defaulted instalment is the principal until it is paid.

(4) As a security for repayment of the said loan with interest as aforesaid the Company hereby hypothecates and creates a charge on the said car and in the event of the Company failing to repay the said amount or any part thereof when it becomes due and payable, the Bank shall be entitled to enforce the said charge by taking possession of the said car and selling the same through Court or otherwise as herein provided.

(5) The Company shall keep the said car in good and working condition and shall produce the car once in a month at the branch office of the Bank at ………...... for inspection by the officer of the Bank.

(6) The Company agrees to pay the registration and other charges payable to the Govt. under the Motor Vehicles Act and the insurance premium when they become due from time to time and shall produce the Registration Certificate, premium receipts and other documents required to be maintained in respect of the said car by law for inspection of the Bank whenever required.

(7) The Company shall not allow the car to be driven by any officer of the company or by a driver holding driving licence for not less than one year or by any other person without a driving licence.

(8) The Company shall not allow the car to remain out of repairs or otherwise idle continuously for more than one month.

(9) In the event of the car meeting with any accident the Company shall immediately give intimation to the Bank in writing giving particulars of the accident and extent of damage caused to the car and shall make a claim for insurance forthwith.

(10) The Company shall not allow the car to be used by any other than an officer of the Company and except for the company's business.

(11) The company shall not hypothecate, pledge or otherwise charge the said car with any liability in favour of any person nor shall sell or give on hire the said car without the consent of the Bank and which the Bank will be entitled to refuse without assigning any reason.

(12) The Company shall get the hypothecation charge hereby created noted in the Registration Certificate of the car as provided in the Motor Vehicles Act and produce the certificate for the Bank's verifications forthwith.

(13) If the Company commits breach of any of the terms of these Presents the Bank will be entitled to take possession of the car where ever it may be parked and shall remain in the possession of the Bank at the risk of the Company until it is sold or the moneys due to the Bank are paid in full.

(14) If the company commits breach of any of the terms of these presents the Bank shall be entitled to call back the amount then due to the Bank and thereupon the said amount will become payable forthwith.

(15) When the amount due to the Bank by the company becomes payable as aforesaid then the Bank will have the right to file a suit in the proper Court for enforcement of the said security by sale of the car through the Court and recover the amount due to the Bank or to file a suit only to recover the amount due to the Bank reserving the rights of the Bank to sell the car outside the Court and appropriate the net sale proceeds towards the amount due to the Bank for principal, interest and costs.

In Witness Whereof the company has put its hand the day ad year first hereinabove written.

SCHEDULE

(Description of the Motor Car

Signed for and on behalf of the M/s. …………………..