Agreement for Loan by Promoters
This loan agreement is made on this 10th day of May 1999 between Mr. AB, by occupation business, residing at …………………………… (hereinafter referred to as the borrower which term or expression shall unless excluded by or repugnant to the context mean and include his heirs, executors, administrators, legal representatives and assigns) of the one part and ELH Home Finance Ltd., a company registered under the Companies Act 1956 and having its registered office and carrying on business at …………………… (hereinafter referred to as the lender which expression shall unless excluded by or repugnant to the context include its successor and assigns) of the other part.
Whereas the borrower is seized and possessed of as the absolute owner of all that premises No.…………… of ……………… comprised of a total land area of 5 (five) Cottahs more fully and particularly described in the schedule hereunder was purchased by the Borrower under Deed No. …………… dated ……………… registered with the Registrar of Assurances, Calcutta.
And whereas the borrower with a view to commercial exploitation of the said plot of land decided to develop the said property and got the appropriate Plan sanctioned by the Corporation of Calcutta which provided for construction of a four-storied building comprising 16 independent flats/units thereon and sale thereof to the intending buyers.
And whereas the borrower has already commenced the foundation work of the project out of his own resources and has completed construction upto the first floor level incurring expenses of about Rs. 18 lakhs.
And whereas the borrower is in urgent need of money to complete the project and has approached the lender for a loan of Rs. 40 lakhs with request to disburse the same in stages as detailed in schedule I hereto to meet his progressive financial requirements to complete the construction of the said four-storied building by June 2000 and proposed repayment of loan together with accrued interest thereon at 20% per annum from, inter alia the sale proceeds of the flats/units by thirty equated monthly instalments of Rs. ………… each commencing from the first day of the month following the receipt of last instalment of loan till the liquidation of the entire dues with interest, costs and other charges within a maximum period of three years from the receipt of the last instalment of the loan. In the event the borrower failing to pay according to the repayment schedule the interest element will correspondingly be enhanced and also the total repayable amount.
And whereas the lender has agreed to accept the proposal of the borrower in sanctioning the loan of Rs. 30 lakhs as confirmed in the lender’s letter of 30th April 1999 addressed to the borrower subject to the observance of the usual terms and conditions applicable to such loans such as creation of mortgage of the property including the structure thereon, both present and future, by way of first charge by deposit of Title Deeds, payment of the specified rate of interest, observance of repayment terms, payment of additional interest in case of default, provision for assignment and creation of other collateral securities.
And whereas the borrower has deposited with the lender a sum of Rs. 25,000 to meet the costs of documentation in connection with the said loan.
Now this agreement witnesseth and it is hereby agreed by and between the parties hereto as follows:
1. In pursuance of this agreement and in consideration of the payment of Rs. 25,000 as mentioned above the lender doth hereby agree to sanction a loan of Rs.30 lakhs to the borrower payable by instalment as detailed in the Schedule II hereunder and confirmed in the lender’s letter of ………… addressed to the borrower to enable the borrower to complete the project construction work of the four-storied residential building comprising 16 indenpendent self-contained flats/units/apartments at the said premises of which the borrower is the owner.
2. The lender upon completion of formalities and execution of documents has this day paid the first instalment of Rs. 10 lakhs to the borrower against creation of mortgage by deposit of Title Deeds of the said premises the receipt of which the borrower has already acknowledged.
3. The first instalment as also all the balance instalments shall be secured by Promissory Note to be executed by the borrower for the respective amounts of the instalments and further the repayment of the entire loan shall be guaranteed by a person of substance.
4. The construction work has commenced by the borrower with first class materials. The construction has to be completed in all respects latest by June 2000.
5. The subsequent instalment of Rs. 20 lakhs will be released to the borrower in accordance with the terms and conditions detailed in Annexure hereto on receipt of Certificate of satisfactory progress of detailed construction work by the attending Architect and in the event of any extension of time granted for completion of construction work beyond June 2000 the instalment of loan will be correspondingly deferred.
6. The borrower shall get the building properly insured comprehensively both during the construction and thereafter jointly in the name of Lender against riot, flood, collapse, malicious damage, fire and earthquake risks making the lender beneficiary thereof and shall get the Insurance Cover renewed every year till the entire loan is repaid in full with applicable interest. In default of the borrower taking out the Policy the Lender may get such insurance to be taken out and/or renewed in the joint names as above at the cost of the borrower and the amounts so spent will be treated as loan to the borrower repayable with interest at 18% per annum.
7. The borrower shall pay all existing and future rates, taxes, charges, assessments, levies, impositions, cesses payable by the borrower of the property.
8. The borrower shall produce a Certificate from the Architect engaged for the construction on completion of the work of construction certifying that the construction was done in accordance with the sanctioned Plan and specifications and that the same was safe and suitable for residential purpose. The borrower shall produce Occupancy Certificate from the Corporation of Calcutta.
9. Immediately upon disbursement of the first instalment of the proposed loan the borrower shall create a mortgage of the entire property with construction and proposed construction by deposit of Title Deeds with the lender at his office as a security for payment of the loan granted and the proposed loan to be granted by the lender to the borrower.
10. Upon completion of the building in accordance with the sanctioned Plan, the borrower shall deliver vacant possession of the building over which the lender shall have a lien till such time the entire dues against the loan disbursed to the borrower together with interest thereon are repaid. If the principal amount of the loan and interest thereon or any part thereof shall remain unrealised then the lender shall have the right and liberty to sell the said flat on behalf of the borrower and appropriate the proceeds thereof in pro tanto satisfaction of the outstanding amount of the said loan.
11. The borrower shall execute an Irrevocable Power of Attorney for this purpose.
12. In the event of failure on the part of the borrower to complete the construction within the specified time for any reason whatsoever the borrower hereby agrees and declares that in that event the lender will have the right and liberty to take over the possession of the unfinished construction work and complete the same at the cost and expense of the borrower and sale the flats and/ or the building in the name and on behalf of the borrower for which the borrower hereby authorises the lender to act on his behalf. The borrower will be liable to all costs of recovery that might be incurred by the lender including all costs in connection with any suit for realisation of the lender’s claims.
13. Borrower undertakes not to create any further mortgage of the land and building or any part thereof to any other person, Financial Institutions or Bank for raising any loan. The borrower hereby declares and confirms that the original Title Deeds executed in favour of the borrower is in possession of the borrower. The borrower declares that he has not obtained any loan from any other Home Finance Company, Bank, Life Insurance Corporation of India or any other similar Institution in connection with the cost of construction of the aforesaid building.
14. The borrower will be at liberty to sell the flats/units/apartments at the said premises with prior consent and approval of the lender on terms and conditions agreed or upon liquidation of all dues payable to the lender in relation to the construction of the said building.
15. The lender shall put up a board at the construction site that the premises is mortgaged with the lender and such board shall not be removed by the borrower till the loan is fully liquidated.
All that pieces and parcel of land measuring 5 Cottahs be the same a little more or less together with four-storied building under construction with all fittings and fixtures comprised in 16 self-contained flats/units/apartments and common areas, pathways, pump house being premises No. ………………… Khatian No. ……. Mouza ………. butted and bounded
On the North by .. R. S. Dag No. 5
On the South by .. 16 ft. wide common passage
On the East by .. Part of Dag No. 5
On the West by .. Part of Dag No. 5
(Sanctioning of loan and disbursement schedule with terms)
The loan is sanctioned for a sum of Rs. 30 lakhs to be secured by creation of first mortgage of the entire premises No. …………… of ……………… Khatian No. ………. with semi-finished construction and construction that will be made on the said land. The loan will be repayable in thirty equated monthly instalment of Rs. …….… Each equated monthly instalment comprises of principal and interest calculated on the basis of annual rate at 20% per annum and is rounded up to the next rupee. The rate of interest is subject to revision to higher rate prevalent at the time of disbursement of the last instalment of loan without any further notice.
The loan amount will be disbursed in three instalments depending on the progress of work as under:
(a) On completion of all formalities/execution
of documents for the present loan … Rs. 10 lakhs
(b) On completion of casting of roof of third floor Rs. 15 lakhs
(c) On fixation of doors, windows, grills and
completion of floorings and plastering … Rs. 15 lakhs
The second and subsequent instalment will be released upon receipt of information about the progress of work duly certified by a qualified Engineer/Architect. It is understood that the entire construction work will be completed by June 2000. The borrower has paid to the Lender Service Charges at 2% of the sanction amount and technical fee all of which are non-refundable. … Rs. ………
In witness whereof the parties hereto have executed this agreement on the day, month and year first above-written.
Signed and delivered by the
borrower Mr. AB, at Calcutta
in the presence of: (Signature)
Signed, sealed and delivered by
Mr. …………… pursuant to Board
Resolution dated ………… of
ELH Home Finance Ltd. in the
presence of: for and on behalf of
ELH Home Finance Ltd.