Indemnity bond asked by bank
Raju
(Querist) 13 March 2013
This query is : Resolved
Hi Experts,
I have a loan from HDFC bank , during first disbursement they did not ask for indemnity bond , now as builder raised demand for rest amount of 50% of flat cost bank is asking for indemnity bond execution on 200 Rs stamp , can you please guide me what is the purpose of indemnity bonds for home loans.
Below is the format they are asking for ...
(on a non judicial stamp paper of Rs. 100/-, duly attested )
INDEMNITY BOND
This Indemnity Bond is executed on this the _______day of _______________2004, by Mr. _______________________________ S/o Mr.______________________________ resident of _________________________________________________________, (hereinafter referred to as the “Executant”) which term shall include his heirs, successors, executors, administrators and legal assigns, in favour of Housing Development Finance Corporation Limited (hereinafter referred to as “HDFC Ltd.”) which term shall include his heirs, successors, executors, administrators and legal assigns.
WHEREAS the Executant wishes to avail of a Loan from HDFC Ltd. vide Loan Account No. _________________, for the Property bearing No.__________, situated at ______________________________________________________________ (hereinafter referred to as “the Property”);
AND WHEREAS the Property is still under construction by ________________ (hereinafter referred to as the “BUILDER”) and shall be ready for possession only on or around __________;
AND WHEREAS the Executant has requested HDFC to disburse the entire Loan irrespective of the stage of construction to the Builder;
AND WHEREAS HDFC has agreed to disburse the entire loan to the Builder at the request of the Executant for the Property irrespective of the stage of construction;
AND WHEREAS the Executant seeks to indemnify HDFC Ltd. at all times for all / any loss that may be a direct or remote consequence of HDFC’s disbursing the entire loan amount to the Executant;
NOW THIS DEED IS WITNESSETH that in consideration of HDFC Ltd.’s disbursing the entire loan amount to the Builder, the Executant hereby undertakes to repay the Loan regularly to HDFC as per the terms and conditions of the Loan Agreement dated __________ irrespective of the date of possession being handed over by the Builder or what is mentioned in the said allotment agreement / flat buyers agreement / agreement to sell or in the event the Builder fails to hand over `possession of the Property to the Executant.
That the Executant hereby also authorizes HDFC in the event of any delay or default, as may be ascertained by HDFC, in the repayment of the Loan, to seek for cancellation of the allotment of the Property to the Builder and accordingly adjust all monies refunded by the Builder against the Loan and that the Executant hereby subrogates its right to claim any refund in favour of HDFC.
In witness whereof the Executant
Mr. ___________________________
S/o____________________________
Resident of _____________________
has signed and delivered this Undertaking cum Indemnity
bond on this day of __________________ of 2010.
Witness:
1.___________________
Devajyoti Barman
(Expert) 13 March 2013
This is for the security of the bank prior to disbursal of loan.
Guest
(Expert) 13 March 2013
The purpose of the bond is very clear. The bank wants that its money should not become a dead and non-performing asset. Since the property is not still ready and has not come under your possession, but you desire to fulfill the wishes of the builder to pay the full cost of property without any possession.
The bank wants to make sure that you should not become defaulter in payment of EMI on account of any dispute with the builder or due to your inability to repay loan during the period of construction or on account of undue delay in possession. If the indemnit bond is there in hand, the bank would be able to get refund from the builder by getting the flat cancelled in your name.
ajay sethi
(Expert) 13 March 2013
bank wants to safegaurd itself . in the vent you fail to repay the loan bank wants allotment in your name cancelled
Raj Kumar Makkad
(Expert) 13 March 2013
Nothing to add more as the bond is self speaking and no further clarification is required from anyone.
