Deed of Charge
This Deed of Charge is made and entered into at____, this___ day of_____, 20___, between ABC, an adult Indian, aged about___ years, occ:-business, resident of____________, hereinafter, for the sake of brevity, referred to as the “Party of the First Part” (which expression, unless, it be repugnant to the context and meaning thereof, shall include his legal heirs, executors, administrators and assigns) and DEF, an adult Indian, aged about____ years, occ:-business, resident of_________, hereinafter, for the sake of brevity, referred to as the “Party of the Second Part” (which expression, unless it be repugnant to the context and meaning thereof, shall include his legal heirs, executors, administrators and assigns).
WHEREAS, ABC, the “Party of the First Part” is a building works contractor, having his place of business at__________, and DEF, the “Party of the Second Part” is a building material supplier having his office-cum-depot at_______________.
AND WHEREAS, the “Party of the First Part” undertook a building works contract on behalf of M/s.XYZ Realtors (hereinafter, for the sake of brevity, referred to as the “Said Developer”) for the construction/development of a housing complex comprising_____ buildings of______ storeys each with_____ flats and____ shops in the aggregate, situate at the building site________, sometime in____ (month), 20___ (hereinafter, for the sake of brevity, referred to as the “Said Project”).
AND WHEREAS, the “Party of the First Part” under the above referred building works contract had undertaken to procure all the necessary building material and components on his own, he engaged the services of the “Party of the Second Part” to supply him all the necessary building material and components as per the former’s specifications and latter, on his part, agreed to do so in conformity with supply orders placed from time to time.
AND WHEREAS, the “Party of the Second Part” supplied raw material and components of varied description from____ to____ , of the aggregate value of Rs____/- (Rs_______________ only) and raised invoices therefor and the “Party of the First Part” on his part, made various payments to the said “Party of the Second Part” to the extent of Rs_______/- (Rs____________ only). However, sometime in _______20___, a batch of bricks, limestone, prefab building blocks and sundry other material supplied by the “Party of the Second Part” was found to be defective and was rejected by the “Said Developer” and payment due to the “Party of the First Part” came to be withheld. Consequently, the “Party of the First Part” requested the “Party of the Second Part” to replace the defective material with standard material, but the said request went unheeded. As a result, the “Party of the First Part” suffered a huge loss of Rs_____/- (Rs________________ only) which forced him to withhold the payments due to the “Party of the Second Part” and in turn the latter party stopped supply of all building material and components from___ to ____.
AND WHEREAS, the aforesaid withholding of supply not only caused losses to the “Party of the First Part”, but also delayed the construction schedule; hence, Shri__________, the Managing Director of the “Said Developer” intervened in the matter and induced both the parties hereto to settle their dispute amicably. Accordingly, both the parties agreed to submit their dispute to the Panel of Mediators appointed by the “Said Developer” which consisted of Shri________, Project Architect, Shri_________, the Structural Engineer and Shri_______, the RCC Consultant. Both the parties hereto, under a Memorandum of Reference dated_______, expressed their faith in the impartiality and competence of the aforesaid Panel of Mediators and agreed to abide by their decision.
AND WHEREAS, the aforesaid Panel of Mediators is expected to give its decision only after hearing the disputing parties and appraising the documentary evidence produced by them, it will take some time before the formal decision is announced; hence, both the parties hereto agreed to resume their normal business dealings pending such decision. The “Party of the Second Part” on his part, agreed to resume the supply of building material and components in conformity with the supply orders placed by the “Party of the First Part” and the latter agreed to pay such sums (if any) as are found due and payable to the “Party of the Second Part” pursuant to the decision of the Panel of Mediators.
AND WHEREAS, the “Party of the Second Part” insisted upon some form of collateral security as a necessary pre-condition for the resumption of supply of building material, the “Party of the First Part” decided to charge his self-acquired flat being and situate at__________ and more particularly described in the Schedule of property appended hereto (hereinafter, for the sake of brevity, referred to as the “Said Flat”) as a security for the due discharge of his liability towards the “Party of the Second Part” on account of the supply of building material in general and the declaration of liability by the Panel of Mediators in particular.
AND WHEREAS, the “Party of the Second Part” expressed his assent to the aforesaid transaction of charge upon the “Said Flat”, the parties hereto decided to record the terms & conditions as hereunder.
NOW THIS DEED OF CHARGE WITNESSETH AS UNDER:-
1] The “Party of the First Part” hereby creates a security by way of charge upon the “Said Flat” for the due discharge of his liability towards the “Party of the Second Part” on account of the supply of building material and components vis-à-vis “Said Project” and the “Party of the Second Part”, on his part, accepts the same security as being sufficient and proper for the resumption of supply of building material and components;
2] The “Party of the First Part” assures the “Party of the Second Part” that he is absolutely seized and possessed and otherwise well and sufficiently entitled to the “Said Flat” and further assures the latter that the “Said Flat” and further assures the latter that the “Said Flat” is absolutely free from encumbrances or third party interest of any kind including sale, gift, lease, mortgage, licence or prior charge of any nature;
3] The parties hereto covenant with each other that the charge created upon the “Said Flat” shall be limited and restricted to the monetary liability of the “Party of the First Part” on account of supply of material and components in the “Said Project” including reasonable expenses incidental thereto pursuant to the decision of the Panel of Mediators and no other. The parties further covenant with each other that the charge created upon the “Said Flat” shall not be availed of to enforce the liability of the “Party of the First Part” (if any) in any other past, ongoing or future projects;
4] The “Party of the First Part” hereby promises and undertakes that he shall pay such sum or sums of money as are found due and payable by the Panel of Mediators, to the “Party of the Second Part” within a period of_____ days (discharge period) of the declaration/decision so made and further agrees that his failure to pay the said sum(s) or any part thereof shall attract penal interest of_____% p.a. which will run from the date of expiry of the aforesaid discharge period until the date of its realisation;
5] The “Party of the First Part” hereby covenants with the “Party of the Second Part” that his failure to pay the money(s) pursuant to the declaration/decision of the Panel of Mediators shall entitle the latter to enforce the charge created upon the “Said Flat” with the intervention of the court of competent jurisdiction and in such event the concerned court may attach and/or sell the “Said Flat” and use the sale proceeds to pay off the liability of the “Party of the First Part” towards the “Party of the Second Part” and the residual amount (if any) after discharging such liability, interest and the costs of realisation shall be paid to the “Party of the First Part”. Conversely, if the sale proceeds are found to be insufficient to meet such liability the “Party of the Second Part” shall be entitled to proceed against the “Party of the First Part” for enforcing the same;
6] The “Party of the Second Part” hereby agrees and undertakes that on the payment of such sum or sums of money as declared by the Panel of Mediators the aforesaid charge created in his favour upon the “Said Flat” shall come to an end and he shall issue Acknowledgment Receipt(s) therefor. Moreover, he shall execute, sign and deliver all such documents, papers and writings as reasonably required by the “Party of the First Part” at the entire cost of the latter.
SCHEDULE OF PROPERTY
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IN WITNESS WHEREOF, both the parties hereto have set and affixed their respective hands to his writing on the day, month and year first hereinabove written.
Signed, sealed and delivered
by ABC, the withinnamed
“Party of the First Part” in the
presence of Witness:-
Sd/-
Name:-______________
Address:-_____________
ABC
The “Party of the First Part”
Signed, sealed and delivered
by DEF, the withinnamed
“Party of the Second Part” in the
presence of Witness:-
Sd/-
Name:-______________
Address:-_____________
DEF
The “Party of the Second Part”
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