DEED OF HYPOTHECATION (CHARGE)
THIS HYPOTHECATION is made the _________ day of _________, in the year 20 _________
BETWEEN
…………………………………………………….. Mills Ltd.
a limited liability company having it registered office at ____________________ and its factory _________ at _________
(hereinafter called ‘the Mills’) of the one part
AND the ______________________________ Bank having its registered office at ________________ and several branches including the one at_________________ _________ (hereinafter called ‘the Bank’) of the other part.
WHEREAS the Bank at the request of the Mills has agreed to grant to them accommodation through the medium of a Cash-Credit Account under a drawing limit of Rupees _________(Rs _________________________________) only to be secured in the manner hereinafter expressed.
NOW THEREFORE IT IS HEREBY AGREED AND DECLARED as follows:
1. That the Mills hereby charges and hypothecates by way of first charge in favour of the Bank all present and future movable plants, engines, machinery, apparatus, tools, motor trucks, lorries and cars, furniture, stocks of _____________________ and other stocks and goods of the Mills, whether in possession or in transit or in process of manufacture (hereinafter referred to as ‘‘the said property’’) for the purposes and upon the terms hereinafter declared.
2. That the said property shall stand hypothecated and charged to the Bank by way of first charge as security for the payment to the Bank on demand of the balance of the said Cash-Credit Account and/or any other account of the Mills with the Bank at the aforesaid Branch of the Bank at. _________ with all interests, discount, commission, charges, costs, etc. usually, customarily or expressly contracted to be debited to the said account or accounts by the Bank in relation to any such indebtedness or liability.
3. That unless otherwise expressly agreed interest at the rate of one per cent per annum above the Reserve Bank of India rate for demand loans obtaining from time to time with a minimum rate of _________ per cent per annum shall be calculated on the daily balances payable by the Mills to the Bank on the said account or accounts on the last working day of each English month or otherwise in accordance with the practice of the Bank and although the relation of Banker and Customer may have ceased, the same shall thenceforth carry interest at the rate aforesaid.
4. That the Bank may at any time at its option and without assigning any reason close the said Cash-Credit Account and stop all future advances and demand payment of the balance then due.
5. That on demand being made by the Bank