In consideration of the Industrial Promotion and
Investment Corporation of Orissa Limited, a Government Company within
the meaning of Companies Act, 1956 having its Registered Office at
IPICOL House,Janapath, Bhubaneswar hereinafter called "the
Corporation" at the request of M/s
a
Private/Public Limited Company incorporated and registered under the
Companies Act.,1956 bearing Certificate of Incorporation No
..
having its Registered Office at
.
hereinafter called "the Borrower" having agreed to lend and
advance a sum of Rs
on the execution of these
presents in such instalments as the Corporation may think fit on the
security of (a) an Equitable Mortgage of the Borrower's property with
all buildings and structures thereon and plant and fixed machinery
situate at .
..and (b) this Hypothecation of
all tangible moveable property, furniture, fixtures, assets and other
moveable assets described in general terms in the Schedule hereunder
(hereinafter referred to 'the hypothecate assets") as the
Borrowers do hereby admit and acknowledge and to be secured by this
Hypothecation of the hypothecated assets with the Corporation and in
the manner and on the terms hereinafter contained.
IT IS HEREBY AGREED BY THE BORROWERS WITH THE
CORPORA TION AS UNDER :
1. The Borrowers Covenant and Agree to pay the sum
of Rs
.... to be hereafter advanced to
the Corporation at its Regd. Office at Bhubaneswar in the manner
mentioned in the Letters of Sanction dated .
and
dated
.... addressed by the Corporation to the
Borrowers setting out the terms of the said loan (hereinafter called
"the letters of sanction") together with interest as therein
mentioned.
2. The Borrowers hereby pledge and hypothecate with
the Corporation by way of First Charge all the plant, fixed and
unfixed machinery, fixtures, implements, fittings and other
installation, furniture, vehicles, type-writers and all other articles
and thing fixed or lying on the said premises or any godowns of the
Borrowerr or in the hands of any person as Merchantile Agent of the
Borrowers or in the course of transit described in the general terms
in the Schedule hereto ( hereinafter called "the hypothecated
assets") which now or hereinafter from time to time during this
security shall be brought in or be in or used about the premises
utilised by the said Borrowers as security
( 3) balance due to the Corporation at any time or as recorded in the
books of account of the Corporation of all moneys advanced by the
Corporation to the Borrowers and for payment of all debts and
liabilities due by the Borrowers to the Corporation there- under. The
expression "the Balance due to the Corporation" in this and
the subsequent clause of this Agreement shall be taken to include the
balance of the moneys from time to time due under the account of the
Borrowers with the Corporation and also all interest thereon at the
rate mentioned in the letters of sanction and the amount of all
charges and expenses which the Corporation may have paid or incurred
in any way in connection with the hypothecated asset or the sale or
disposal thereof .
3. That the Hypothecated assets shall be held as
the Corporation's exclusive property specially appropriated to this
Security and the Borrowers will not, except with the consent in
writing of the Corporation, create any mortgage, charge lien or
encumbrance thereon affection the same or any part thereof nor do any
thing which would prejudice this security.
4. The Borrowers shall permit the Corporation, its
agents, servants and technical experts from time to time and at all
times to enter upon any building or any premises where the Hypothe-
cated assets or any spares or equipment thereof may be lying and to
view, inspect and value the same and take inventories thereof to
ensure the efficient working of the Hypothecated assets and to render
to the Corporation and to their servants all facilities as may be
required for any of the purposes aforesaid. The Borrowers shall carry
out all the suggestions and directions that may be given by the
Corporation in the behalf and -shall bear and pay all fees expenses
that may be
( 4 ) incurred by the Corporation in connection with such inspection
valuation and technical consultation and the carrying out of all such
suggestions and directions and all such fees and expenses together
with interest thereon at the rate of interest hereinafter specified
shall be a charge on the Hypothecated assets for due payment of all
the dues of the Corporation.
5. The Borrowers will purchase machinery as per the
scheme approved by the Corporation and from suppliers to be approved
by the Corporation in writing.
6. The Borrowers shall pay the rates, taxes,
out-goings and other charges payable to any authority for the
maintenance and upkeep of the Hypothecated assets or the place where
it is stored and shall keep the same free from any distress.
7. (i) The Borrowers shall at all times during the
continuance of this security and from time to time insure the
Hypothecated assets and keep in insured against loss or damage by
fire. riot, civil commotions, strikes comprehensive or any other risks
as may at any time or from time t@ time be required by the Corporation
or by law in the joint names of the Corporation and the Borrower with
insurance Company/Companies previously determined in writing by the
.Corporation to the extent of the full market value thereof and
punctually pay the premium due for such insurance and that the cover
note(s) or the insurance Policy / Policies Certificate(s) shall be
deposited by the Borrowers with the Corporation.
( 5 ) may be deemed necessary by the Corporation in its absolute
discretion and debit the premium and other charges to the account
maintained by the Corporation.
(iii) In the event of loss, destruction by tire or
otherwise or damage to the Hypothecated assets or any of them or any
part thereof the Corporation shall be entitled to recover and receive
all moneys payable in respect of the insurance. In the event of the
Corporation not receiving the amount payable in respect of the
insurance either wholly or partly for any reason whatsoever the
Borrowers shall be bound to pay forthwith the balance due to the
Corporation on demand.
(iv) All sums of money recovered or received under
the last preceding sub-clause may at the option of the Corporation be
applied towards the liquidation and satisfaction of the balance due to
the Corporation and if any surplus shall remain in the hands of the
Corporation after such application thereof as aforesaid such surplus
shall remain at the disposal of the Borrowers but if the sum or sums
of money realised from the insurance be sufficient to cover the
balance due to the Corporation as aforesaid, the Borrowers agree
forthwith to repay to the Corporation to deficiency on demand.
(v) The Corporation shall be entitled to adjust,
settle, compromise or refer to arbitration any dispute between the
Insurance Company/Companies and the Borrowers arising under or in
connection with the Insurance Policy/Policies and such adjustment,
settlement, compromise and any award made on such arbitration shall be
valid and binding on the Borrowers.
(vi) The Borrowers shall not at any time raise any
question that a larger sum might or ought to have been received under
such settlement, compromise or award as the case may be entitled to
dispute its liability for the balance remaining due to the Corporation
as the same shall be valid and binding on the Borrowers.
8. That Borrowers shall make and furnish to the
Corporation all statements and returns of the cost and market value of
the Hypothecated assets and produce such evidence in support thereof
as the Corporation may from time to time require and shall maintain in
favour of the Corporation a margin of at least
.(
percent) of the written down value. The said margin shall be
calculated on the cost price or open market value of the Hypothecated
asset as fixed by the Corporation from time to time and shall be
maintained by the Borrowers by such payment by the Borrowers
immediately on the market value for the time being of the Hypothecated
assets becoming less than the aggregate of the balance due to the
Corporation plus amount of the margin as calculated above.
( 7 ) the event of default in repayment of principal on the amount of
default for the defaulted period.. The interest will be calculated
with half yearly rest, on the last days of June and December and shall
become payable within six days in the next succeeding month.
In the event of default in payment of interest on the due dates
compound interest at the rate of 2% over and above the normal rate of
shall be payable on the amount of interest due and not paid for the
period of default. Further the Company undertake to pay the revised
rate of interest as and when the rate of interest shall be revised
upward by the corporation from time to time during the subsistence of
the loan.
9. You/Company shall pay interest@ ______ % p. a.,
subject to such variation in the rate of interest as may be decided
upon by the Corporation and communicated from time to time during the
subsistence of the loan. You shall also pay penal interest of @ 2% p.
a. in
10. That on demand by the Corporation the Borrowers
shall pay to Corporation in Cut tack the Balance the due to the
Corporation at the foot of the account together with all further
charges and expenses (if any) to the date of payment providing that
nothing herein contained shall be deemed to prevent the Corporation
from demanding payment of the interest for the time being due at the
above mentioned rate without at the same time demanding payment of the
balance due to the Corporation exclusive of such interest. Provided
further that all interest which shall for the time being accrue due on
the said principal sum or any part. thereof and which shall for the
time being remain unpaid and all other moneys which become payable
hereunder shall in case the same be not paid on the days on which the
become due carry interest at the same rate aforesaid computed from the
respective time of such due dates upon the taking of compound interest
with rests, taken or made 3 monthly on the days herein above provided
for payment of interest and all such compound interest shall be
charged on the Hypothecated assets provided that this provision shall
not be deemed to authorise the Borrowers to allow any interest or
other moneys as hereunder written to fall in arrears unless permitted
so to do by the corporation and this provision shall also not be
deemed to authorise the Borrowers not to pay interest every 6 months
and not to pay such other moneys as aforesaid or the right of the
Corporation to take any legal proceedings or other action under these
present provided that the Borrowers shall have the option to repay in
whole or in part any of the instalments of principal amount ~re- under
written before their respective due dates.
11. The Corporation and their officers and agents
shall be entitled in default of payment of the moneys and/or
instalments due to the Corporation or in case of any contingency or
emergency arising which in the opinion of the Corporation would make
it necessary for the Corporation to take possession of the
hypothecated assets to enter upon the premises where the Hypothecated
assets shall be living and to break upon outer doors and to take
possession or recover and receive the same and the Corporation shall
be entitled to appoint any officer or officers of the Corporation as
receivers of the Hypothecated assets with power to do all things as
fully and effectually as the Borrowers could do and/or sell together
or in loss either by public auction or private contract or otherwise
dispose of or deal with all or any part of the Hypothecated assets
with liberty to buy in at any sale by auction and to remind or very
any contract for sale without being answerable for any loss or
diminution in price and without being bound to exercise any of such
power of being ,liable for any loss in exercise of such power to give
effectual receipts and discharges for the purchase money and to do all
other acts and things for completing the sale as the Corporation shall
think proper and to apply the net sale-proceeds of such sales in or
towards liquidation of the balance due to the Corporation and the
Borrowers hereby agree to accept the Corporation's statement of
realisation and to pay any short fall or deficiency therein show
PROVIDED HOWEVER the Corporation shall be entitled to charge and
retain as part of the costs, charges and expenses incurred in
connection herein such commission at the Corporation shall at its sole
discretion fix and shall not be liable to account for the same to the
Borrowers. Such commission shall be in addition to any brokerage or
10utgoing payable in respect of such sale. If the sale proceeds are
not sufficient to pay the amount of such commission the Borrowers
shall pay the same forthwith to the Corporation on demand.
12. That if the sum realised by such sale be
insufficient to cover the balance then due to the Corporation, the
Corporation shall be at liberty to sue the Borrowers for the balance
there- of and nothing herein contained shall be deemed to negative
quality or otherwise prejudice the right of the Corporation to recover
from the Borrowers notwithstanding that all or any of the said
Hypothecated assets or any part thereof not been realised. .
13 That if the Corporation shall take possession of
the Hypothecated assets whether under clause 10 thereof or other- wise
howsoever or shall appoint a Receiver thereof neither the Corporation
nor the Receiver shall be responsible, notwithstanding anything to the
contrary in Section 152 of the Indian Contract Act, for any loss or
detoriation or damage to the Hypothecated assets whether by theft,
fire, rain, flood, earth- quake, lighting or any other case whatever ,
14. Nothing herein contained shall prejudice or
affect any general or special lien to which the Corporation shall by
law or otherwise be entitled to operate to prejudice its and remedies
in respect of any present or future security, guarantee obligation for
any indebtedness or liability of the Borrowers to the Corporation.
15 The Borrowers agree accept as conclusive proof
of the correctness of any sum claimed to be due, from them to the
Corporation under the agreement, a statement of account made out from
the books of the Corporation and signed by the Account/and/or other
duly authorised officers of the Corporation without the production of
any other voucher, document or paper .
16. The Borrowers hereby declare that all
hypothecat1on assets are the absolute property of the Borrowers at
sole disposal of the Borrowers and free from any prior charge or
encumbrance and that the Borrowers have not done or knowingly suffered
or been party or prive to anything whereby are in anywise prevented
from hypothecating the said assets in manner aforesaid and that the
Borrowers will do and execute at their costs all such acts things for
further and more particularly assuring the hypothecated asset to the
Corporation as shall be required by Corporation.
19. That the Borrowers shall keep proper books of
accounts of their business and the said firm and shall ,have them at
all time duly posted and shall permit the Corporation or any person
appointed for that purpose by it to examine such books all responsible
times and make such copies of or extracts therefrom as the Corporation
may think fit. The Borrowers shall also have their accounts audited at
least once a year by a duly qualified auditor and shall submit a copy
of the audited accounts to the Corporation within six months from the
closing of each yearly account,
20. In case the Borrowers shall not utilise the
hypothecated asset for the purpose for which the loan is granted in
terms of the letters of sanction such a default shall be treated as a
breach of terms and conditions hereof.
21. The Borrowers shall furnish and verify all
statements, reports, returns, certificates and information from time
to time and as required by the Corporation and give and execute any
necessary documents required to give effect to this security. The
Borrowers shall also' give all information and assistance and furnish
all such reports as may be required by the Corporation or any person
appointed by it in relation to the business of the Borrowers or their
accounting and other arrangement or regarding the loan advanced to
Borrowers and the use made of such loan and the Corporation shall
without any question or objection by the Borrowers be entitled to
furnish to the Industrial Development Bank of India all such
information and reports as may have been obtained by the Corporation
either from the Borrowers or otherwise howsoever. It is however hereby
provided agreed and declared that the Borrowers shall if necessary
execute a fresh and proper letter of Hypothecation the said
hypothecated asset in favour of the Industrial Development
( 12 ) Bank of India on the analogous terms and conditions in these
presents contained, at the costs of the Borrowers all such acts, deeds
and things as the Corporation may require for in connection therewith.
22. Nothing herein contained shall operate or be
deemed to prejudice the rights or remedies of the Corporation in
respect of any present or future securities guarantees, obligations or
decree for any other indebtedness or liability of the Borrowers to the
Corporation.
23. The agreement shall operate as continuing
security for the balance due to the Corporation from time to time and
all other monies due by the Borrowers to the Corporation as aforesaid.
24. Pending seizure by the Corporation the
hypothecated assets and any documents any money received/by the
Borrowers from any insurance company shall be held as the
Corporation's exclusive property specifically appropriated to this
security.
25. The Borrowers hereby covenant with the
Corporation as follows :
a) That the Borrowers have good right to
hypothecate and charge the hypothecated asset by way of first charge
as aforesaid and declare that the same is and shall be free from.
any other claim either by way of mortgage, lien, pledge, charge,
hypothecation or otherwise and as to future machinery the same shall
be the absolute and un-ecumbered property of the Borrowers with full
power of disposition.
(b) That during the subsistence of these presents
of Borrowers will not create without the Corporation's prior written
consent any other term debt nor any mortgage, pledge, hypothecation,
charge, lien or encumbrance in respect of hypothecated assets or any
of them or any part thereof in and manner whatsoever (whether by way
of specific mortgage or charge or floating charge or otherwise) in
favour of any person, firm or company other than the Corporation or
otherwise deal with the hypothecated asset or any part thereof
except in the regular course of business and only until notice is
received from the Corporation of their intention to enforce. This
agreement by realisation of the security herein and will not permit
of suffer to be done any act, deed matter, thing, which may
adversely .affect of in any way prejudice the security and/or the
rights of the Corporation herein.
c) That all the agreements, terms and conditions
contained in the Corporation's letters or sanction, dated
.. and dated
.... addressed to
the Borrowers and not specially set out herein shall deemed to be a
part of these presents as if they were incorporated and formed part
of these presents and shall be duly paid, observed and performed by
the Borrowers.
(d) To utilise the said sum of Rs
.
for the purpose set out in the letters of sanction and for no other
purposes.
(e) To bring in the balance amount as may be
required to complete the scheme as envisaged.
(f) Not to give or let on hire and/or utilise the
hypothecated assets during the currency of these presents for
illegal purposes-.
(g) To maintain the hypothecated assets in good
working condition.
(f) T o execute on demand by the Corporation such
further documents as may be required by the Corporation to vest the
hypothecated assets in the Corporation to render the same readily
realisable by the Corporation at any time.
(g) The Borrowers shall not make any alternation
in or the hypothecated assets in the ordinary course of repairs
without permission of the Corporation and shall not remove or change
or allow to be removed.
(j) The Borrowers shall keep the Corporation
notified of the address where the hypothecated assets are from time
to time kept and every change of the said address shall be intimated
to the Corporation within 24 hours (exclusive of Sundays and
holidays) before the same is made.
(k) The Borrowers shall notify the Corporation of
any accident, loss or damage to the hypothecated assets or any
accident, loss or damage involving a third party as soon as it shall
occur .
(I) The Borrowers shall alone be responsible for
any breaches of law committed by them as their employees and for all
claims made by third parties in Respect of loss or damage caused by
the hypothecated assets and shall keep the Corporation indemnified
against all claims and demands made against it in respect of any
such breach of loss or damage
26. The Borrowers shall indemnify absolutely
unconditionally and fully and at all times indemnified saved defended
and harm- less the Corporation against all claims demands rights
actions proceedings of whatsoever kind or nature made taken filed by
and person or party and against all and any losses damages costs
charges expenses and liability of any kind or nature whatsoever which
the Corporation may suffer sustain incur or be exposed to in respect
of or relating to t4e hypothecated assets.
27. The Borrowers hereby agree to pay on demand all
costs, charges and expenses (the legal costs between attorney and
client) that may be incurred or suffered by the Corporation in the
negotiations executions of carrying into effect or in enforcing of
this Agreement in relation to the exercise of any power or sale or any
other power herein contained or in relation to any deed act matter or
thing arising out of this Agreement or of and incidental thereto
together with interest thereon at the rate of per annum.
28 Any notice to be given by the Corporation to
Borrowers shall b~ deemed to have been duly given if despatched by
post or manual delivery addressed to the Borrowers as his / their
office address even though returned undelivered on account of refusal
by Borrowers and every such notice shall be deemed to have been
received by the Borrowers on the expiration of t'he normal period
occupied in transit by post from the time at which it was put into the
post.
29. Notwithstanding anything contained herein the
Borrowers hereby covenant that in accordance with the provisions of
Section 29 of the State Financial Corporations Act. (hereinafter
called 'the Act') the Corporation may be notice require the Borrowers
forthwith to discharge in full their liability to the Corporation in
the following evens namely:
1. (a) If it appears to the Board of Directors of
the Corporation that false or misleading information in any material
particular was given in the application made by the Borrowers to the
Corporation for the loan hereby secured, or
(b) If the Borrowers shall make any default in
any of the terms and conditions set out here-in-above.
(c) If there is any responsible apprehension that
the Borrowers are unable to pay debts or proceedings are taken for
his/ their or any of his/their adjudication as insolvent, or
(d) If for any reason it is necessary in the
opinion of the Board of Directors of the Corporation to protect the
interest of the
2. Over and above the other rights and power of
the corporation conferred on it by the said Section 30 of the Act
and without prejudice to such rights and powers, the Corporation
shall have the right by notice in writing to require the Borrowers
forthwith to discharge in full his/ their liabilities to the
Corporation hereunder in the following cases and in any such case
the whole of the amount then remaining payable to the Corporation
shall at the opinion of the Corporation became payable to the
Corporation as if the time for payment thereof had expired and the
Corporation shall entitled to exercise all its rights and remedies
hereunder namely:
(b) If default shall be committed by the
Borrowers or any of them in the observance or performance of and of
the covenants conditions or provisions of these presents, or of the
letters of sanction, or
(c) If execution or distress is levied against
the whole or any part or any part of the hypothecated assets, or
(d) If a Receiver is appointed of the
hypothecated assets or any part thereof, or
(e) If the Borrowers shall enter in to any
arrangement or composition with their creditors commit any act or
default which shall render them liable to be adjudicated insolvent,
or
(f) If the Borrowers cease or threaten to cease
to carry on their business, or
(g) If any circumstances shall occur which shall
prejudice or imperil or depreciate or if likely to prejudice or
impair or imperil or depreciate the security of the Corporation.
(h) If any circumstances or event shall occur
which would or is in the opinion of the Corporation likely to
prejudicial or adversely affect in any manner the capacity of the
Borrowers to repay the loan to the Corporation.
PROVIDED FURTHER that the decision of the
Corporation as to whether any of the aforesaid events or circumstances
has occurred shall be final, conclusive and binding on the Borrowers
and thus entitling the Corporation to file a petition in the
appropriate Court for adequate relief under Section 31 of the Act or
to take action under Section 29 of the Act.
IN WITNESS WHEREOF the said ,Borrowers has/have set
his/
their hands and seals at Bhubaneswar the
day of
..200
.The common seal of the Borrowers has been
hereto affixed in the manner hereinafter mentioned the
day
of
..200
THE SCHEDULE ABOVE OFFERED TO
All, tangible movable property, plant fixed of
otherwise machinery fixtures, fittings, electric and other
installation, and all other articles fixed lying on the premises at or
in the go-downs of the Borrowers or in the custody of any person who
are Mercantile Agents of the Borrowers or in the course of transit
including all movable assets which may hereinafter be brought stored
or be laying or upon the said premises of the Borrowers which includes
the following machineries.
BORROWER