Agreement for Cash Credit with a Bank on the Security of a Limit Pronote by Shiva.

No. 29

Agreement for Cash Credit with a Bank on the Security
of a Limit Pronote

THIS AGREEMENT is made the . . . . . . . . . day of . . . . . . . . . . . . . in the year . . . . . . . . BETWEEN the . . . . . . . . . . . A. B. Bank with its registered office at . . . . . . . and several branches including the one at . . . . . . . (hereinafter called ‘the Bank’) of the one part AND Shri . . . . . . . . . . . . ., son, of . . . . . . . . ., resident of . . . . . . . . . . ., or Messrs . . . . . . . . . . ., a registered partnership firm having for its partners Shri . . . . . . . . . . . and Shri . . . . . . . . . . . . . . . ., residents of . . . . . . . and. . . . . . . . . . . respectively and carrying on business at various places including the one at. . . . . . . . .(hereinafter called ‘the Borrowers’) of the other part.

WHEREAS the Bank through its branch at . . . . . . . . . has at the request of the Borrowers agreed to open in its books at the aforesaid branch a Cash Credit account in the name of . . . . . . . . up to the maximum limit of Rupees . . . . . . . . . (Rs . . . . . .) only.

NOW, THEREFORE, THIS, AGREEMENT binds the parties as under:

1. That the Bank shall make advances from time to time and as may be required by the Borrowers up to a maximum limit of Rupees. . . . . . . . (Rs . . . . ) only inclusive of all interest and other charges, but the liability of the Borrowers shall not be limited to the above maximum amount, if the borrowing inclusive of interest and other charges exceeds the aforesaid agreed limit.

2. That interest at the rate of . . . . . . . per cent per annum. . . . . . shall be paid by the Borrowers on the daily balance of the said account and shall be charged to the account on the last working day of each English month and the same shall form part of the principal and carry interest at the said rate. If, however, the limit is not availed of, or an amount less than Rupees . . . . . . . . (Rs . . . . .) only is borrowed or even if there is a credit balance in favour of the Borrowers the Borrowers shall pay interest at the stipulated rate on Rupees . . . . (Rs . . . . . .) only.

3. That the Borrowers shall pay interest at the rate of one per cent per annum over and above the rate of discount charged by the Reserve Bank of India or as mentioned in the foregoing paragraph of this agreement, whichever rate being higher.

4. That the account in the books of the Bank shall be conclusive proof against the Borrowers of any amount due to the Bank upon the said cash credit account with the Bank and the Borrowers accept that in addition to the stipulated interest they shall pay to the Bank the following charges also:

(i)   usual incidental charges every six months,

(ii)   usual commissions on foreign, that is, outstation cheques, drafts etc., and

(iii)   other usual and customary charges.

5. That a relative pronote dated . . . . . . . . . . . . . , for the maximum limit of Rupees . . . . . . . . . (Rs . . . . . .) only carrying interest at the stipulated rate has been executed by the Borrowers in favour of the Bank and has been handed over to the Bank to secure the payment of any sum which may at any time be due to the Bank on the said cash credit account.

6. That this agreement shall subsist for a period of. . . . . . .years from the date hereof, unless the Bank extends the period or stops making advances. The Bank shall be at liberty to stop making advances at any time without assigning any reasons and may do so without any prior notice.

7. That on the expiry of the period specified in para 6, above or at any time later or earlier, the Borrowers shall pay to the Bank on demand, the balance then outstanding and owing to the Bank on the said cash credit account (inclusive of interest and all other charges and expenses) as ascertained by the books of the Bank which the Borrowers agree to accept as sufficient proof of the amount due from them without the production of any voucher, receipt or paper, AND in the event of the said demand being neglected or not complied with within the period specified in the demand the Bank may realise the amount or amounts due through civil process with all expenses and charges actually incurred whether the same be legally taxable or not.

IN WITNESS whereof the parties hereto have at . . . . . . . affixed their signatures the day and the year first above-written.

Witnesses:                                                                    Sd.

1.                                                                                 Borrower

Address:                                                                       For A. B. Bank

Sd.

2.                                                                                 Agent/Manager

Address:

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