*Jagadish*Legal effects of Documents:

Documentation & Consequences of defective Documentation with special reference to Legal Action. Presentation by: Jagadish Chandra Debnath.PrincipalNCC Bank TI

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*Jagadish*What is DocumentsDocuments means any matter expressed or described on any substance by means of letters figures or marks or by more than one of those means intended to be used for or which may be used for the purpose of recording that matter.

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*Jagadish*Meaning of DocumentationDocumentation is the execution of documents in right form & lawful manner.

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*Jagadish*Legal Impact of Document Documents are the physical embodiment of the existence of loans & advances. Documentation forms a permanent record of the rights responsibilities and obligations of the executants that the borrowers and guarantors towards the lender (Bank).Documents must be considered, firstly- In regards to the admissibility as evidence in proceeding and secondly - With a view to statement interpretation.

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*Jagadish*Legal Impact of DocumentMainly three questions may be examined when documents are produced in the Court these are: -Are the documents genuine?What are the contents?Are the statements in the document True?

Original Document is said to be primary evidence & certified copy true copy, photocopy, carbon copy of documents is said to be Secondary evidence.

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*Jagadish*CHARGE DOCUMENTSMeaning of Charge: To impose a duty, responsibility or obligation on or to hold financially liable, right to demand payment from a person. Such formation CONSTRUCTIVE RIGHTS of a lender on borrower and his offered security is the charge. The documents by which such rights are to be established on offered security is called Charge Document.

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*Jagadish*Rights on Security Sue Right Sale RightPossession Right Holding or Retain RightExchange RightEnjoyment RightInterest Right Right Transfer Set -off RightPersonal Right TITLE RIGHT it is never transferred

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*Jagadish*Mode of Charging over the Security :Sue Right Sale RightPossession Right Holding or Retain RightExchange RightEnjoyment RightInterest Right

Right Transfer Set -off RightPersonal Right Debt Contract Sale of Goods Act. Pledge ( Cont. -172) Lien ( cont -171) Bailment ( Cont-148)Sale of Goods Act. Hypothecation/ Mortgage ( TP act. Sec-58 ) Assignment ( TP Sect-132)Contract Act-39P. Note ( NI -4) Guarantee ( Contract Act- 126)

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*Jagadish*STEPS IN DOCUMENTATIONPreparation of deed- Banks Printed Forms set as per Terms and condition and nature of advances.Legal Opinion- as per latest circular from the panel legal adviser /advocate of Bank.Executants and Execution- Signature capacity- style stamp.

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*Jagadish*STEPS IN DOCUMENTATIONWitnessing- Signature capacity- style.Stamping of Documents as per Stamp Act 1899, Amendment 1998 Stamp Schedule. (amendment -2004)Registration as per Registration Act -1908. (amendment -2004)Safe Keeping / Preservation.

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*Jagadish*Documentation Based on:Before starting documentation bank officer who takes documents must consider the following preconditions:-

Nature of Advance and purposeNature of Borrower (s)Nature of Security and Mode of ChargingSanction Advice Terms & Conditions regarding Charge creation Charge requiring registered or not Charge documents to be stamped or not, If stamped amount and types of stamp.Capacity of Executants and signing CapacityBanks supplied printed Documents sets and their contents.

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*Jagadish*Nature of AdvancesSecured Overdraft (SOD) FO Financial Obligations / Advances against Shares/ FDR/PSP/BSP/ WDB/ Life Insurance policySecured Overdraft (SOD -RE) against Work Order.Loans - Short terms and Long terms Short term Loan- personal loan/ consumer creditLoan against imported Merchandise (LIM)Loan against Trust Receipt (LTR)Long Term Loan ( Project Loan)Continuous Credit:Cash Credit (C.C) Hypo/ Pledge of stocks / Inventories for Working CapitalECC - Export Cash Credit.PC- Packing CreditBill Purchase: Inland Bill Purchase-IBP/Foreign Bill Purchase- FBP Credit Card

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*Jagadish*Nature of Borrower While execution of Documents against advances the mode of charging over the offered security varies from case to case according to their

constitution of Firms.

Personal Capacity ( Signature)IndividualJoint borrowerProprietorshipPartnership

Official Capacity (Signature)Autonomous body / Club/ SocietyStatutory Co.Limited Company.

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*Jagadish*Nature of Security and mode of chargingPerson security

MovableStock / Goods in trade InventoriesMachine & equipments

Financial papers/ InstrumentsImmovable Land / building

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*Jagadish*General Guide line for Documentation.A bank officer must adopt a strict professional approach in the execution of documents Selection proper forms (Banks printed forms) of documents set as per banks requisites and sanction terms.The execution of documents should be done in the presence of officer responsible obtaining documents, The documents should be got completed in one sitting in the same handwriting using the same ink and pen.The borrower must be asked to sign in full signatures in the same style throughout the documents the documents does not carry initial or marks,

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*Jagadish*General Guide line for Documentation.All types of additions, alternations, insertions cuttings, overwriting erasing, interlineations, declaration etc. must be authenticated by the borrower Date & Place of execution in each document: should be mentioned invariably (Co- borrower / different place).The document should not be double dated as 2/3 or 6/8 etc.Documents if run several pages borrowers put his Signature on each pages and on the last end of documents.Where borrower is an illiterate person content of the documents should be explained with the help of Lawyer or a respectable persons.Interest clause must be correctly mentioned as linked with Bangladesh Bank Rate.

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*Jagadish*When Documents Invalid.Alteration and interlineations in documents if it is done after execution.The misstatement /mislead delivers deed.If the party is blind or illiterate and if the documents are read falsely.The party executing the documents is not competent.Improper stamping / under stamping.Want of Attestation or witnessing if necessary.

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*Jagadish*When Documents are Invalid.Failure to Registered with competent authority within specific time.Ambiguous Schedule of the offered security.Forgery, tempering deleting of documents.Deed executed as a result of undue influence or forcefully.Instrument executed in blank (amount, security, liability) with a bad intention.

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*Jagadish*Charge Creation through Execution of Documents

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*Jagadish*Charge creation on Borrowers/ Guarantor (Personally) Demand Promissory Note - Adv-11, Adv-12, (NI Act sec. 4 (singly/ jointly/ jointly and severally)Letter of Guarantee adv-14Letter of Guarantee (third party) adv-15Letter of Ownership (Plegde) Adv-20Letter of Guarantee (in case of Limited Co.) Counter Guarantee Adv-17Letter of Declaration Adv-18Letter of Ownership (Pledge) -20Letter of Arrangement (general) Adv-10Letter of disbursement (in case of Loans) Adv-13

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*Jagadish*Charges on offered Security (Movable goods)..Letter of Hypothecation Adv-25( of Stock in Trade)Letter of Hypothecation of bills Adv-21Letter of Pledge (goods Pledged) Adv-22Letter of Lien Adv-19(/ securities/certificates /PSP/BSP ------) Third PartyLetter of Lien Adv-39 (FDR/ Call Deposit SB/CD/ Margin/ Special Deposit)Letter of Lien Against Stock/ shares Adv. 23Letter of Lien Adv (security offered by third Party) Adv-24 Letter of Right of set offLetter of Assignment (Life Insurance Policy-LIP)Irrevocable Power of Attorney in favour of Bank,

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*Jagadish*Charges on offered Security (Movable goods)..Letter of undertaking and indemnityLetter of Trust Receipt Adv- 06Letter of Packing Credit (exch.)Details of Guarantee Bond Adv-28Transfer of Shares Adv-26Revival Letter Adv-29Agreement for Pledge of Securities Adv-35Debit Balance Certificate Adv-36Stock Report (Pledge) Adv-37Stock Report (Hypothecation) Adv-38

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*Jagadish*Charges on offered Security (Immovable)

Mortgage by registered DeedMortgage by deposit of Original Title Deeds Adv-27 (Equitable Mortgage)Irrevocable Power of Attorney in favour of Bank regarding Mortgaged property.Deed of Agreement

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*Jagadish*Contributory Charge Documents

Letter of PartnershipDeed of Partnership (registered)Resolution of the Board of Directors (seeking advances)Deed of Agreement of Hypothecation of vehicles before purchaseAgreement of Hypothecation of vehicles after purchaseAffidavit (on Non- Judicial Stamp) in addition to non-encumbrances Certificate.

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*Jagadish*DEMAND PROMISSORY NOTE ( for Individual & Proprietary Concern )

DEMAND PROMISSORY NOTE

TK................................................ Date.................... I promise to pay on demand NCC Bank Limited, or order, the sum of Tk.................Taka.................................................................................................................for value received with interest there on , from this date, at the rate of ..................... percent over the published Bank Rate of Bangladesh Bank with minimum of ................% per annum with.........................rests

Revenue stamps

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*Jagadish*DEMAND PROMISSORY NOTETK.=5,00.000/- Date. August 12, 2008.

I promise to pay on demand NCC Bank Ltd or order, the sum of Tk = 5,00,000/-. (Tk Five Lac Only) for value received with interest there on, from this date, at the rate of 8%.... percent over the published Bank Rate of Bangladesh Bank with minimum of .....13%...@. per annum with quarterly ..rests

Revenue stamps

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*Jagadish*DEMAND PROMISSORY NOTE ( for Company )DEMAND PROMISSORY NOTE

TK................................................ Date.................... We promise to pay on demand NCC Bank Limited, or order, the sum of Tk........ Taka.. .............................................................................................................for

value received with interest there on , from this date, at the rate of .....................

percent over the published Bank Rate of Bangladesh Bank with minimum of ................% per annum with.........................rests

Revenue stamps

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*Jagadish*DEMAND PROMISSORY NOTE (For Partnership & Joint Borrowers)DEMAND PROMISSORY NOTE

TK................................................ Date.................... We jointly and severally promise to pay on demand NCC Bank Limited, or order, the sum of Tk........ Taka.. .for

value received with interest there on , from this date, at the rate of .....................

percent over the published Bank Rate of Bangladesh Bank with minimum of ................% per annum with.........................rests

Revenue stamps

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*Jagadish*Letter of Disbursement Place.Date.The Manager National Credit and Commerce Bank Limited .

Dear Sir, Ref Loan for Tk----------------------------------------------------------------With reference to the above demand loan availed by me/ us today in respect of which I/we have this day signed a Demand Promissory Note for Tk. . Please disburse the amount of the loan by crediting the same to . Yours faithfully

.

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*Jagadish*Letter of Arrangement The Manager Date..NCC Bank Ltd

Dear SirRef: Loan / Overdraft/ Cash Credit Limit Granted by you in /my/ our favour Tk.. ( Taka..)

With reference to the above limit granted in favour of .. For which I/we have this day executed Pro-Note and other necessary documents. I/we hereby acknowledge your right to cancel the facility at any time with or without intimation to us.

In the event of facility being cancelled by you . I/we undertake to pay you all dues together with all other charges due from me/ us immediately on demand.

Yours faithfully ..( signatures of all borrowers)

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*Jagadish*Letter of Continuity National Credit & Commerce Bank Limited . Branch---------------------------------

Dear Sir, I/we encose herewith a Demand Promissory Note for Taka (Taka..) only signed by me/us which given to you as security for the payment of nay loan/ cash credit which is present outstanding /// ///////////////////// Tk. ////////////// that said Promissory Note not withstanding the fact that by payment maid into the said loan/ cash credit account////// may be at credit

Although the said loan/ CC WES/ LIM account in the name of ----------------------------- ----------------------------------------------------- and will operated upon only the said ------------------------------------- all of us shall be liable jointly and severally as aforsaid. Yours faithfull

Date ------

Special Adhesive Stamp

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*Jagadish*Letter of Hypothecation NCC BANK LIMITEDHYPOTHECATION OF GOODS TO SECURE A DEMANDCASH CREDIT/ OVERDRAFT /LOANACCOUNT No.------------------------

Amount Tk...................................(Taka...............................................)Margin........................%Interest.......................%(........................) above the published rate of the Bangladesh Bank Minimum..................% (.......................)"Name ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------NCC Bank Limited (hereinafter called "the Bank ") having at the request of------------------------------------------------------------------------------------------------------------------------------------------------------------- (hereinafter called "the Borrowers") opened or agreed to open in books of the of the Bank at a Cash Credit ..........................................Security : ------- godowns at------------------------"

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*Jagadish*Letter of Lien

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*Jagadish*Q& AThank You all

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