LOAN AGREEMENT
This Loan Agreement (this "Agreement") is made at __________ on __________.
BETWEEN
__________, of __________, PAN __________ (the "Lender", which expression includes the Lender's heirs, legal representatives and permitted assigns);
AND
__________, of __________, PAN __________ (the "Borrower", which expression includes the Borrower's heirs and legal representatives).
The Lender and the Borrower are each a "Party" and together the "Parties". The Lender is the Borrower's __________.
RECITALS
A. At the Borrower's request, the Lender has agreed to lend the Borrower the sum of __________ (the "Loan Amount") on the terms of this Agreement.
B. The Loan Amount is required by the Borrower for __________.
C. The Lender confirms that this loan is a personal, one-off transaction made otherwise than in the course of any business of money-lending, and this Agreement does not constitute the Lender a money-lender for the purposes of any law relating to money-lenders.
NOW THIS AGREEMENT WITNESSES AND THE PARTIES AGREE as follows:
- THE LOAN
1.1 The Lender shall pay the Loan Amount to the Borrower by __________ on __________ (the "Disbursement Date").
1.3 The Borrower's signature on this Agreement, on and from the Disbursement Date, is an acknowledgement of receipt of the Loan Amount in full.
- INTEREST
2.1 __________.
- REPAYMENT
3.1 __________.
3.5 All repayments shall be made to the Lender's bank account stated below, or by such other mode as the Parties agree in writing, and by a mode that complies with clause 10.
- PREPAYMENT
4.1 __________. A part-prepayment is applied first towards any interest and other amounts then due, and the balance towards principal, and does not by itself change the due date of the remaining instalments unless the Parties agree otherwise in writing.
- LATE PAYMENT
5.1 If the Borrower fails to pay any amount due under this Agreement by its due date, __________ on the overdue amount, from the due date until payment, without prejudice to the Lender's other rights under this Agreement.
- SECURITY
6.1 This loan is __________.
6.3 A cheque given as security under clause 6.1 is given for the purpose for which it is drawn, and its dishonour on presentation may expose the drawer to proceedings under s.138 of the Negotiable Instruments Act, 1881, separately from the Lender's rights under this Agreement.
- JOINT AND SEVERAL LIABILITY
7.1 Where more than one person is named as the Borrower, whether in the signature block above or in Recital D, each of them is jointly and severally liable for the whole of the Loan Amount, interest and other sums due under this Agreement, and the Lender may recover the whole of any amount due from any one of them without first proceeding against the others.
- EVENTS OF DEFAULT
8.1 It is an event of default if: (a) the Borrower fails to pay any amount due under this Agreement and does not cure that failure within __________ days of it falling due; (b) any cheque given as security under clause 6 is dishonoured on presentation; (c) the Borrower breaches any other term of this Agreement and does not cure that breach within __________ days of written notice from the Lender; or (d) the Borrower becomes insolvent, makes an arrangement with creditors generally, or has insolvency proceedings commenced against the Borrower.
8.2 On an event of default, the whole of the outstanding Loan Amount, accrued interest and late-payment interest becomes immediately due and payable, and the Lender may recover it by civil suit without further notice. The Parties record that this Agreement is a written contract for the repayment of a fixed sum of money, so that a suit to recover an amount due under it may qualify for the summary procedure under Order XXXVII of the Code of Civil Procedure, 1908.
- DEATH OR INCAPACITY OF THE BORROWER
9.1 The Borrower's obligations under this Agreement are not personal to the Borrower and do not end on the Borrower's death; they bind the Borrower's estate, and are recoverable from the Borrower's legal heirs and representatives to the extent of the assets of the Borrower's estate that come into their hands, and not further or otherwise.
- TAX COMPLIANCE
10.1 The Parties record that under s.269SS of the Income-tax Act, 1961, a loan of Rs 20,000 or more must not be taken otherwise than by account payee cheque, account payee bank draft, or an electronic mode of payment, and under s.269T of that Act a loan of Rs 20,000 or more must not be repaid otherwise than by the same modes — a contravention exposes the person who pays or receives in cash to a penalty under s.271D or s.271E of that Act equal to the amount so taken or repaid. Where the Loan Amount or any repayment is Rs 20,000 or more, the Parties shall use a mode of payment that complies with this clause, whatever is recorded in clause 1.1 above.
- REPRESENTATIONS
11.1 Each Party represents that it has full capacity and authority to enter into this Agreement, and the Borrower represents that the particulars given about the Borrower's identity and address are true.
- STAMP DUTY AND REGISTRATION
12.1 Stamp duty on this Agreement is borne by __________. This Agreement is not compulsorily registrable, for the reasons given in the registration note that accompanies this template.
- NOTICES
13.1 A notice under this Agreement is validly given if delivered by hand, sent by registered post with acknowledgement due, or sent by e-mail to the address stated for the Party concerned in this Agreement, and is treated as received: if by hand, on delivery; if by post, on the expiry of the ordinary course of post; and if by e-mail, on the next working day.
- ASSIGNMENT
14.1 The Borrower shall not assign or transfer any obligation under this Agreement without the Lender's prior written consent. The Lender may assign the benefit of this Agreement, including the right to receive repayment, on written notice to the Borrower, and the Borrower shall thereafter pay the assignee as directed.
- DISPUTE RESOLUTION AND GOVERNING LAW
15.1 __________.
15.2 The seat and venue of any arbitration under this Agreement, and the place of any court proceedings, is __________, and the courts at __________ have exclusive jurisdiction, subject to any arbitration agreed above.
15.3 This Agreement is governed by the laws of India as in force at the place where it is executed.
- GENERAL
16.1 This Agreement is the entire agreement between the Parties about the loan and supersedes all prior discussions about it.
16.2 No amendment is effective unless made in writing and signed by all Parties to this Agreement.
16.3 A failure or delay by the Lender in enforcing a right under this Agreement is not a waiver of it, and a single or partial exercise does not prevent further exercise.
16.4 If any provision of this Agreement is held invalid or unenforceable, the rest of this Agreement continues in effect.
IN WITNESS WHEREOF the Parties have executed this Agreement at __________ on __________.
SIGNED AND DELIVERED by the LENDER
__________
PAN: __________
Signature: ______________________________
SIGNED AND DELIVERED by the BORROWER
__________
PAN: __________
Signature: ______________________________
WITNESSES
- __________
__________
Signature: ______________________________
- __________
__________
Signature: ______________________________