Deed of Trust for the Purpose of Paying Debts

Deed of Trust for the Purpose of Paying Debts

This deed of trust made this …………… day of …………… 2000 between AB son of ……………… (hereinafter called the debtor) of the First Part and CD son of …………………… and EF son of ……………… (hereinafter called the trustees) of the Second Part, GH son of …………… (hereinafter called the creditor) of the Third Part.

Whereas the said AB is truly and justly indebted to the said CD in the sum of Rs. 5 lakhs only for which the latter has served the former with legal notice and intends to institute a suit for recovery of the said sum with costs and interest.

And whereas the said AB having at present no means nor any further resource to liquidate the said loan approached the said GH for time and accommodation to pay up the said debt by instalments which the said GH has agreed to grant only if adequate arrangement is forthwith made to secure regular payments of instalments and for preservation of the assets of the said AB as they are now until repayment of the entire debt.

This deed of trust witnesses  that in pursuance of the said agreement and in consideration of the said GH refraining from taking any action against AB for immediate enforcing payment, the said AB doth hereby and hereunder grant, convey, transfer and assign all his property mentioned in the Schedule below unto the said trustees to have and to hold the same upon trust for the purpose hereinafter mentioned:

(i) That the said trustees shall exert themselves by all legitimate ways and means, exercise all the powers and authorities hithertofore exercised by AB, supervise, manage and develop all the properties of the said AB so as to yield much better income from all sources.

(ii) That the said trustees continue to hold, possess, manage and administer the said properties until full satisfaction and discharge of the debt of the said AB to the said GH and thereafter the said properties shall be retransferred to the said AB.

(iii) The trustees shall out of the income of the said properties as and when collected shall, after payment of the municipal taxes and other capital and revenue liabilities, pay or cause to be paid to the said AB an allowance of Rs. 2,000 per month regularly not later than the 7th of every current month subject to such increase or decrease thereof as may be necessitated by the rise or fall of the annual income of the trust properties.

(iv) The trustees shall divide the entire balance of the income of the properties hereby transferred in four parts, one part of which shall be kept deposited in an account in some bank approved by the said GH to meet such unforeseen or emergent expenses as may be necessary in the interest of and for the benefit of the trust. The trustees shall pay the remaining three parts to the said GH towards liquidation of the debt inclusive of interest until the entire debt is liquidated.

And it is hereby furthermore agreed and declared by and between the parties that subject to aforesaid the said trustees shall stand possessed of the said properties hereby transferred in trust for the purpose aforesaid but shall have no power to sell, mortgage, charge or otherwise encumber the same except with the consent of the other parties first had and obtained or under order of a court of competent jurisdiction.

Provided always and it is hereby agreed and declared that in the event of the office of any of the trustee falling vacant the appointment of a new trustee or trustees shall only be made at a meeting called for the purpose to be presided over by the said GH and attended by the parties, and in case the trustees fail to carry out the object of the trust in the manner hereinunder provided, it shall always be lawful but not compulsory on the part of the said GH to institute a suit for recovery of the amount due to him and to have a Receiver appointed to take possession, control and management of the trust property.

The Schedule above referred to

The estimated value of the trust property is Rs. ……………………

In witness whereof the parties hereto have set and subscribed their respective hands and seals the day, month and year first above-written.

Signed, sealed and delivered by AB the debtor in presence of:

Signed, sealed and delivered by CD and EF accepting the trusteeship

in presence of:

Signed, sealed and delivered by
GH the creditor in presence of: