CHG-1

[Dhaval Sudani]

HI FRIENDS.

MY CLIENT (PVT LTD CO) HAS OBTAINED A BANK TERM LOAN OF RS 154.00 LACS AND C.C. OF RS 150.00 LAKHS AND HAS OFFERED A FACTORY BUILDING (REGISTERED IN THE NAME OF CO) AND 2 RESIDENTIAL HOUSE (REGISTERED IN THE NAME OF GAURANTORS WHO ARE NOT SHAREHOLDERS OR DIRECTORS IN THE COMPANY) AS COLLATERAL SECURITY. A SINGLE MORTGAGED DEED IS EXECUTED FOR ALL THREE PROPERTIES. MY QUESTION IS :

(1) UNDER POINT 12(d) OF FORM CHG-1, WE NEED TO MENTION THE EXTENT AND OPERATION OF CHARGE. TERM LOAN IS REPAYABLE WITH IN 5 YEARS WHEREAS COMPANY WOULD CONTINUE TO UTILIZE C.C. FROM BANK FOR LONGER PERIOD. WHAT DO WE NEED DO MENTION THERE?

(2) UNDER POINT 14 OF FORM CHG-1, DO WE NEED TO MENTION ABOUT THE PROPERTIES OFFERED BY THE GUARANTORS ALSO OR ONLY OF COMPANY

THANKS IN ADVANCE.

[Prashant Damani]

Dear Mr. Dhawal,

First of all, creation of charge in Form CHG-1 is the duty of the Bank / lender and their legal department will take care of filling up the form.

If, however, you are required to do so, you can mention "PAYABLE ON DEMAND" for CC limits.

Also, the charge has to mention the properties of other guarantors also (these are also mentioned on the Mortgage Deed).

HOWEVER, How come outsiders give guarantee for loan availed by the Company? Please check relevant provisions of CA also.

With Regards,

PRASHANT DAMANI

+91 9051181119

dontn...@gmail.com

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[Dhaval Sudani]

THANK YOU MR PRASHANT. GUARANTORS ARE NONE OTHER BUT FAMILY MEMBERS OF THE DIRECTORS. THEY ARE THE OWNER OF RESIDENTIAL PROPERTY OFFERED AS COLLATERAL TO THE BANK.

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Regards.

Dhaval Sudani & Associates (Chartered Accountants)

H. D. Patel (Advocate)

"Satnam", 1 - Indraprasthanagar, B/h Hemu Gadhvi Hall,

Krishna Pathak School Lane, Rajkot - 360001.

0281 - 2474458, 2474459, +91-9924635563.