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Date: ________
Place: ________
To,
________
________
Attention: ________
Re: Letter of Deposit / Hand-over of Post-Dated Cheques pursuant to the Loan Agreement dated ________ (the “Agreement”) executed by and between ________ (the “Lender”) and ________ (the “Borrower”)
Dear Sir/Madam,
This letter (this “Letter”) is issued by the Borrower to the Lender in connection with and in furtherance of the Agreement. Capitalised terms used but not defined in this Letter shall have the meaning ascribed to them in the Agreement.
§ 1. Acknowledgement of the Loan and Repayment Obligation. The Borrower hereby acknowledges and confirms that, in terms of the Agreement, the Borrower is liable to repay to the Lender the principal amount of the loan, being a sum of Rs. ________ (Rupees ________), together with interest accruing thereon at the rate of ________ per annum, and all other charges, fees, costs and amounts payable under the Agreement (collectively, the “Outstanding Amounts”), in the manner and on the dates set out in the Agreement.
§ 2. Delivery of Post-Dated Cheques as Security. As security for, and to facilitate, the due repayment of the Outstanding Amounts, the Borrower hereby delivers to the Lender the following post-dated cheque(s) (the “Post-Dated Cheques”), drawn on the Borrower’s account, the particulars whereof are set out below:
Cheque number: ________
Cheque date: ________
Amount: Rs. ________ (Rupees ________)
Drawn on (Bank & Branch): ________
Account number: ________
IFSC: ________
Name of drawer: ________
§ 3. Representations as to Validity. The Borrower represents, warrants and declares that the Post-Dated Cheques delivered to the Lender under this Letter are validly drawn, executed and issued in accordance with applicable law, including the Negotiable Instruments Act, 1881; that the Borrower is duly authorised to draw and issue the said cheques; that the account against which the said cheques are drawn is a valid, subsisting and operative account; and that the said cheques have been issued towards a legally enforceable debt and liability of the Borrower under the Agreement.
§ 5. Undertaking to Honour and Maintain Funds. The Borrower unconditionally undertakes to maintain sufficient funds in the said account so as to ensure that the Post-Dated Cheques are duly honoured on presentation, and undertakes not to issue any “stop payment” instruction or close, alter or restrict the operation of the said account in a manner that would prevent the honouring of the said cheques. The Borrower further undertakes to forthwith replace any Post-Dated Cheque that is lost, mutilated, time-barred or otherwise rendered incapable of being realised.
§ 7. Security in Addition to Other Remedies. The Post-Dated Cheques are furnished as additional security and shall be without prejudice to, and shall not in any manner discharge, dilute or substitute, the obligations of the Borrower under the Agreement or any other security furnished thereunder. The acceptance, presentation, non-presentation or return of any of the Post-Dated Cheques shall not be construed as a waiver, novation, satisfaction or discharge of the Borrower’s obligations under the Agreement.
§ 8. Governing Law and Jurisdiction. This Letter shall be governed by and construed in accordance with the laws of India, and the courts at ________ shall have exclusive jurisdiction in respect of any dispute arising out of or in connection herewith.
This Letter has been executed by the Borrower as a deed and is intended to be legally binding.
Sincerely,
For and on behalf of ________
____________________
Name: ________
Designation: ________
WITNESSES:
1. Signature: ____________________
Name: ________
Address: ________
2. Signature: ____________________
Name: ________
Address: ________
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