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CLIENT AGREEMENT

This agreement is made and executed in RAJAMUNDRY on this____day i


of_______ 2010.

BETWEEN

NATIONAL BULK HANDLING CORPORATION LIMITED, a Company incorporated


under the provisions of the Companies Act, 1956 and having its Registered Office at Landmark
3rd Floor, Suren Road, Chakala, Andheri (East) Mumbai – 400 093 (hereinafter referred to as the
“NBHC” which expression shall unless it be repugnant to the context or meaning thereof shall be
deemed to mean and include its successors and assigns) of the FIRST PART;
AND
__________________________________________________, a Partnership Firm
registered under the provisions of Indian Partnership Act 1932 having its
place of business i
at__________________________________________________________________________
hereinafter referred to as “Client” [which expression shall, unless excluded
by or repugnant to the context or meaning thereof, be deemed to include the
partners or partner for the time being of the said firm, the survivors or
survivor of them and the heirs, executors, administrators of the last surviving
partner, their or his assigns) of the SECOND PART
a Company incorporated
under the provisions of the Companies Act 1956, having its registered office
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at___________________________ hereinafter referred to as “Client” [which
expression shall, unless excluded by or repugnant to the context or meaning
thereof, be deemed to include its successors in business and permitted
assigns] of the SECOND PART.
_________________________________________ an Individual residing at
________________________________________________________ hereinafter referred
to as ‘Client’ (which expression shall, unless excluded by or repugnant to the
context or meaning thereof, be deemed to include hi/her heirs, executors,
administrators and permitted assigns) of the SECOND PART
_________________________________________ carrying on business in the name
and style of __________________________________ Proprietary concern having
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his/her office at __________________________________________ hereinafter
referred to as ‘Client’ (which expression shall, unless excluded by or
repugnant to the context or meaning thereof, be deemed to include his heirs,
executors, administrators and permitted assigns ) of the SECOND PART
OR

WHEREAS
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The Client has approached NBHC to provide Collateral Management
Services as defined hereunder (hereinafter referred to as the
“Services”) with the intention of obtaining bank loan against the
pledge of commodities / materials already stored / to be stored in the
warehouse as more particularly set out in Annexure – A (“said
Warehouse”) on the terms and conditions as set out hereinbelow.
The Client may also include its new locations, as and when required
with prior written consent from NBHC.

NOW THEREFORE THIS AGREEMENT DOTH WITNESS AND IT IS


HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS:
Definitions –
(a) Commodities/material –
(b) Collateral Management Services –
Subject to terms and conditions contained herein -
(i) To co-ordinate with the Bank on Behalf of Client, to assit the Client to
obtain loan against pledge of commodities/material. NBHC shall
provide Collateral Management services which shall include:

A) In case the goods/commodities are already stored in the


Warehouse by the depositor;
I) Basic Collateral Management (CM) Services

i. Quality Certification through random sampling method


ii. Quantity Certification through random bag verification.
iii. Sample weighment, based on declaration made by the
Client
iv. Issuance of Storage Receipt
v. Supervision of quality and quantity
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II) Advisory Services
i. Intimating the condition of the stock, whenever
deterioration is noticed due to forces of nature, for necessary
preventive and curative treatment to contain the quality and
value of goods.
ii. Scrutiny of insurance coverage
B) In case the goods/commodities are to be stored in the
Warehouse by the depositor;
I) Basic Collateral Management (CM) Services

i. Quality Certification through random sampling method


ii. Quantity certification through random bag verification
iii. Issuance of Storage Receipt on receipt of the
commodities/materials in the location specified in
Annexure - A.
iv. Supervision of the quality and quantity.

II) Advisory Services


i. Intimating the condition of the stock, whenever deterioration is
noticed due to forces of nature, for necessary preventive and
curative treatment to contain the quality and value of goods.
ii. Scrutiny of insurance coverage
1) The Client hereby appoints NBHC to provide such services as set out
elsewhere in this agreement for such consideration as set out in Clause
No. 17 hereinbelow in respect of its commodities/goods stored in the
warehouse as detailed in Annexure A hereto on such terms and
conditions as set out hereinbelow / NBHC accepts such appointment and
in consideration thereof, agrees to provide and perform the Services in the
territory during the term.

2) The Client hereby represents & warrants that the Warehouse in which
the pledged commodities/material is stored/to be stored is taken on
Lease/Sub Lease basis by the Client from the owner of the said
Warehouse as more particularly described and mentioned in
Annexure – A. Further the client confirms that he has right to
appoint NBHC to provide the services in the said warehouse as
envisaged under this agreement [and accepts that it shall be Clients i
sole responsibility and obligation to extend the tenure of Lease/Sub
Lease agreement till the date this agreement subsists]. The Client
hereby represents that he is the sole & lawful owner of the
commodities, and at any point of time, if the ownership of the
commodities becomes suspect or questionable or challenged by any
third party the client will be solely responsible to resolve such dispute
at his cost & risk and NBHC would be absolved from all its
responsibilities/obligations under this agreement. NBHC would also be
absolved from its responsibility in case if any loss of quality/quantity of
collateral is caused by any acts, omissions or commissions of the Client
or his/her employees/labour/representatives/agents/contractors as the
case may be. The Client agrees to keep NBHC fully indemnified and
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repay the loan taken from the Bank with interest without raising any i
collateral issue as and when such details are brought to his
notice/knowledge by NBHC.
OR
The Client represented that the warehouse(s)/godown(s) in which the pledge
commodities/material is stored is owned by the client details of which are
more particularly described and mentioned in Annexure – A.. The Client
hereby represents that he is the sole & lawful owner of the
commodities, and at any point of time, if the ownership of the
commodities becomes suspect or questionable or challenged by any
third party the client will be solely responsible to resolve such dispute i
at his cost & risk and NBHC would be absolved from all its
responsibilities/obligations under this agreement. NBHC would also be
absolved from its responsibility in case if any loss of quality/quantity of
collateral is caused by any acts, omissions or commissions of the Client
or his/her employees/labour/representatives/agents/contractors as the
case may be. The Client agrees to keep NBHC fully indemnified and
repay the loan taken from the Bank with interest without raising any
collateral issue as and when such details are brought to his
notice/knowledge by NBHC.

3) The Client has approached NBHC to take possession of the said


Warehouse for storage of commodities and maintenance of the
commodities and NBHC has agreed to manage the said Warehouse and
provide the aforementioned Services therein. In case if the
commodities are stored in open plinth / open premises the risk in the
commodities shall be with the client and the client keeps NBHC fully
indemnified in this regard.

4) The Client represents and warrants that prior to obtaining loan from
the Bank his right/ownership of commodities/materials stored or to be
stored in the said Warehouse is undisputed and free from all liens,
charges, claims and encumbrances and that storage of commodities in
the said Warehouse is not in contravention of any applicable law and
or any rules/regulations notified by the government, semi-government
or local bodies. The Client agrees that in the event of such storage of
commodities/materials becoming illegal or unlawful at any point in
time, he will immediately repay the entire loan taken from the Bank
without raising any collateral issue and NBHC would not be held
responsible in any way, meaning thereby that all legal and financial
consequences shall be handled solely by the Client with all costs.

5) The Client represents and warrants that its right on the said
Warehouse is free and clear from all liens, charges, claims and
encumbrances and that no one other than the Client has any right, title
or interest in or to the use and occupation of the said warehouse. The
Client further represents and confirms that the Lease/Sub-Lease
agreement between him and owner of the warehouse is valid and
subsisting as on date hereof and shall be solely responsible to extend
the same till the validity of this agreement and keep NBHC indemnified
in this regard from any claims by the owner of the said Warehouse.
NBHC shall not be responsible for non-delivery of the commodities in
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case of the owner obtaining any restraining orders from the court and
or in case of the owner stopping NBHC from providing the services
envisaged in this agreement for any reasons whatsoever.

6) The Client has also undertaken to handover the possession of


commodities / materials stored or to be stored in the said Warehouse
to NBHC, and NBHC accepts the commodities / materials stored or to
be stored in the said Warehouse and shall, subject to physical
inspection thereof, issue Storage Receipt accordingly. The Client shall
at the request of the banker handover the Lock and Key of the
warehouse to NBHC to cater the Collateral Management services and
NBHC shall take the possession of the said warehouse and such
possession shall be considered as deemed Lease/Sub Lease in favour
of NBHC and the consideration of such deemed Lease/Sub Lease shall
be Re. 1/- (Rupee One Only per month) which shall be liable to be
adjusted from services charges payable to NBHC. NBHC shall be in a
position to use and have exclusive right as of a lessee / Sub Lessee till
the time the agreement is in force or the commodities are stored and
in control of NBHC. In case at any point of time it is found that the
Client had no right to hand-over possession of the said Warehouse to
NBHC for any reason and or had no right to enter into this agreement,
NBHC shall have the right to terminate this agreement forthwith
without any liability on NBHC and / or the bank and the Client hereby
agrees to keep NBHC fully indemnified in this regard.
In the event of commodities / material are being stored in licensed
warehouses or cold storages, NBHC shall regularly check the stock
position of the Client in such warehouses or cold storages, as the case
may be. It shall be sole responsibility of the Client to provide required
No-Objections from such licensed warehouse or cold storage in favour
of NBHC in order to enable NBHC to perform the Collateral
management services in such licensed warehouse or cold storage.
7) NBHC shall ensure that the delivery of the commodities/materials
stored or to be stored in the said Warehouses shall be made only on
the specific instructions from the Client. However, on obtention of loan
NBHC shall appropriately record a pledge in favour of the lending Bank
and shall release the stored commodities/materials only as per
specific/written instructions of lending Bank. It is however clarified that
in case if the commodities deposited in the said Warehouse are not
funded/pledged by the bank, NBHC shall not be liable or responsible in
respect of such unfunded stock and the Storage Receipt issued in lieu
thereof. In this case it shall be the sole responsibility of the Client to
return the Storage Receipt to NBHC and maintain the unfunded stock
and take possession thereof.
8) That Client shall ensure that the said Warehouses is insured against all
losses or damage by fire, earthquake or any other natural calamity and
also take and maintain at his cost the insurance policies in respect of
agricultural commodities stored or to be stored in the said warehouse
subject to this agreement, which shall quintessentially contain fire,
theft and burglary clause. NBHC or lending Bank shall be the loss
payee of the insurance.

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9) (a) NBHC shall ensure monitoring of quality of the commodity at
regular intervals. In case of deterioration of commodity due to pests or
other forces of nature, NBHC would intimate/suggest necessary
curative/prophylactic treatment to the depositor. In the event of any
failure/negligence in taking cognizance of the NBHC’s advice, the
responsibility of NBHC for the quality of commodity would cease to
exist and the loan obtained by the client from the Bank would become
immediately payable with interest and in the event of any failure in
this regard NBHC would be free to advise the financing Bank for
recalling the loan and dispose of the commodity in the local market by
identifying a buyer in consultation with Bank and deposit the sale
amount into the loan account with the Bank after recovering its dues
from the Client.

(b) NBHC would not be responsible for any natural deterioration


(deterioration due to forces of nature or transportation of commodities,
warranted by the circumstances, from one godown to another godown)
in the quality/quantity of the commodity or due to reasons not
attributable to NBHC.
(c) The Client understands that in case where the commodities are pre-
stacked in the Warehouse, NBHC can carry out only a limited de-
stacking and restacking of the commodities for verification of quantity
and quality thereof. In this regard the Client keeps NBHC fully
indemnified from any claims, losses, damages, charges, etc that NBHC
may incur in case if the quantity as stated by the Client is found short
or the quality/grade of the commodity stated by Client is found to be
false/incorrect or if the part of the commodities are found to be
spurious.

(d) The Client understands that in case the commodities are deposited
by the Client subsequent to NBHC taking possession of the Warehouse
under this agreement, NBHC can only carry out a random sampling for
verification of quantity and quality thereof. In this regard the Client
keeps NBHC fully indemnified from any claims, losses, damages,
charges, etc that NBHC may incur in case if the quantity as stated by
the Client is found short or the quality/grade of the commodity stated
by Client is found to be false/incorrect.

10) The Client represents, assures and warrants to NBHC that there is no
legal or other impediment for the management of the said warehouse
by NBHC for the purpose and on the terms and conditions stated
herein. It shall be a condition precedent and the sole responsibility of
the Client to any of the NBHC's obligations hereunder that the Client
shall obtain any and all such approvals, sanctions, consents,
concurrence and any 'no objection' as may be required and shall keep
NBHC fully indemnified in this regard.

11) The Client agrees to indemnify NBHC and its officers, directors,
employees, agents, representatives and affiliates (collectively, the
"Representatives") from and against any losses, actions, claims or
damages of any kind (including attorney fees) which may be suffered
by any of them as a breach of provisions prescribed by the State in

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respect of holding or holding limits of commodities deposited with
NBHC

12) The Client shall pay all the municipal and other assessment rates and
taxes in respect of the said warehouse or that may, during the term of
this Agreement, be levied or increased in respect of the said
warehouse or shall ensure that the same has been paid by the owner
of the property.

13) The Client agrees to ensure that the technical and security staff of the
warehouse shall cooperate with NBHC in all manners and not create or
cause to create any sort of hindrance or impediment to the operations
or functioning of any staff of NBHC or the Client as the case may be.

14) During the period of deposit all expenses relating to transportation,


loading and unloading of the commodities/materials and the expenses
related to sample weight measurement shall be borne solely by the
Client.

15) The Client hereby covenants that the warehouse premises as


mentioned in the Annexure – A hereto appended has not been leased /
sub-leased out previously to any other party.

16) The Client shall comply or shall ensure at his costs compliance of all
applicable laws, rules and regulations relating to the title of the
property or any regulations relating to the construction of the building
and shall indemnify the NBHC against any adverse consequence
arising out of non-compliance.

17) In consideration of the performance of the services by NBHC of its


obligations under this agreement, NBHC shall be entitled to receive the
consideration from the lending bank and the same shall form
consideration for this contract.

18) This agreement shall commence/deemed to have commenced from i


___________ This agreement shall be valid for the period as mentioned
herein under:

18.1 Till the commodities / materials stored in the


warehouses/godowns remain pledged to any bank the pledge
marking is done on the commodity under possession at the
Warehouse the agreement shall automatically stand renewed till
the lending Bank releases its right as a pledgee/beneficial owner of
the Commodities, and/or

18.2 Till the client needs services for the said commodities/ material
post release of the pledge marking, and/or

18.3 Till the period of 12 (Twelve) months

Whichever is later.

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19) NBHC may be entitled to receive some fees from the Client for
rendering certain services to the Client in relation to this contract, as
mutually agreed between NBHC and the Client.

20) Notwithstanding expiration/termination of this agreement as aforesaid,


all rights and obligations accrued during the period of this agreement shall
continue to bind the parties till such rights and obligations are completely
discharged. Both the parties shall continue to be bound by its rights and
obligations under this agreement regarding the goods deposited before the
date of termination including the inspection and audit procedures and
collection of fees on such goods till the Storage receipts issued under the
current arrangements are discharged. The parties shall not create any new
obligations under this agreement after issuance / receipt of the termination
notice. It is however made clear that the NBHC’s responsibility & liability of
monitoring the quality of the commodities shall cease to exist within 30 days
from the date of maturity of bank loan.

21) Upon the termination of this agreement for any reason whatsoever, the
Client shall forthwith make full and immediate payment of all sums
that may be due to NBHC as well as the lending Bank as may be
applicable under the terms of this agreement.

22) NBHC hereby agrees to indemnify the Client and keep the Client
indemnified and saved harmless at all times in respect of any loss,
damages, claims, costs, charges and expenses which the Client may
incur arising directly as a result of gross negligence, default or
omission on the part of NBHC, its officers, employees or agents or any
party in performing the Services in the manner provided for in this
Agreement, however the liability of NBHC will be limited to the total
amount received as service charges from the Client. Both parties
exempt each other from indirect and consequential losses/damages.
Client agrees that this will not in any way reduce his liability to pay the
loan taken from the Bank with interest.

23) Client undertakes to indemnify and keep NBHC its Directors, officers
and representatives indemnified at all times against all losses, costs,
charges, expenses, claims and damages incurred/suffered by NBHC as
a result of lapse, act or omission, negligence, non compliance /
violation of any statutory enactment , applicable rules/regulations, etc.
or any of them, including but not limited to matters pertaining to
licenses for storing essential commodities as may be notified from time
to time on the part of Client in respect of commodities stored / to be
stored in the location/s as mentioned in Annexure A in this agreement.
The Client further keeps NBHC, its Directors, officers and
representatives indemnified and harmless at all times for any costs,
charges, expenses, damages, losses incurred/suffered by NBHC, its
Directors, officers and representatives from any claim, action, suit or
such other civil and or criminal proceedings that may be instituted by
the owner of the said warehouse or person claiming under hi

24) The Client shall ensure compliance with all statutory / Government
regulations such as to obtain approvals, permissions, sanctions,

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Licenses, customs, taxes, labour etc. as may be applicable for the
purpose of carrying out all the provisions contained in this agreement.
The Client shall also be responsible for obtaining appropriate
permission for the Warehouse for storing the Commodities/ material as
contemplated in this Agreement, the compliance of any statutory
requirements of either State / Central / Municipal Authorities where the
Pledged commodities/material are to be stored and to be managed by
NBHC. Any charges, dues payable by the Client to the Warehouse
owner shall be paid and borne by the Client and the Client shall ensure
that the Warehouse and the Pledged commodities/ material are free
from any encumbrance or charge or lien or claim whatsoever.

25) Neither party to this agreement shall be responsible to the other party
for any delay in performance or non-performance due to Force
Majeure, but the defaulting party shall promptly, upon the occurrence
of any such event inform the other party in writing, stating the cause
that has delayed or prevented its performance hereunder and
thereafter the defaulting party shall take all action within its power to
comply with the terms of this agreement as fully and promptly as
possible.

26) Both the parties agree that the failure of either party at any time to
enforce any of the provisions of this agreement or to exercise any right
under this agreement shall in no way affect financing Bank’s rights to
recover the loan amount with interest pending resolution of collateral
issue in accordance with the terms of this agreement at a later stage.

27) This Agreement shall be governed and construed in accordance with


the laws of India. In relation to any legal action or proceedings to
enforce this agreement, the parties irrevocably submit to the exclusive
jurisdiction of the Courts in Mumbai and waive any objection to such
proceedings on grounds of venue or on the grounds that the
proceedings have been brought in an inconvenient forum.

28) All disputes, questions or differences or any interpretation thereof


arising out of or in connection with this agreement and any addendums
shall be at the first instance shall be mutually discussed and resolved
by mutual agreement by representatives of each party, failing which
the same shall be referred to an arbitrator who is not directly or
indirectly connected with any of the parties to this agreement, in
accordance with and subject to the provisions of the Arbitration and
Conciliation Act, 1996 or any other enactment or statutory modification
thereof for the time being in force. In case if the parities fail to arrive a
consensus on appointment of a sole arbitrator, the dispute/s shall be
referred to arbitration by three arbitrators, one to be appointed by
each party and third arbitrator to be appointed by the other two
arbitrators appointed by the parties. The award of the arbitrator shall
be final and binding on the parties to this agreement. The language of
the arbitration shall be the English Language. The Arbitration shall
always be held in Mumbai and the Courts of Mumbai shall alone have
jurisdiction in the matter. The arbitrators shall give a reasoned award.

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The parties shall bear respective costs of arbitration unless otherwise
directed by the arbitrator.

29) No amendment, change, or modification of this agreement shall be


valid unless in writing signed by the parties hereto.

30) Any notice, demand or other communication required or permitted to


be given as per this agreement shall be in writing and shall be well and
sufficiently given or made if sent by Registered Post A.D.(‘RPAD’) or by
hand-delivery at the address mentioned in this agreement or to the
authorized person as mentioned herein under;

Any notice, demand or other communication so given or made shall be


deemed to have been given or made and to have been received:

a. On the third day after the date of dispatch recorded on the


appropriate registered letter similar document issued in this regard
by the applicable postal authority, and
b. On the day of sending if sent by hand delivery, telefax or other
means of recorded electronic communication

NBHC CLIENT

Vice-President (Collateral _______________________


Management)
National Bulk Handling _______________________ i
Corporation Ltd.
Office No. 401, Boston House, Suren _______________________
Road, Chakala,
Andheri-Kurla Road, _______________________
Andheri (East), Mumbai - 400 093.
Maharashtra, India.

Tel 91-22-40861000
Fax 91-22-40861010

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31) The address for communication as mentioned hereinabove may be
changed by the parties at any time by prior written notice to the other
through aforementioned modes i.e RPAD and or Hand-delivery.

As WITNESS the hands of the duly authorized signatories of the


parties hereto set as of the day and year first above written.

)
SIGNED BY Mr. __________________, )
Authorised Signatory )
for and on behalf of NATIONAL BULK )
HANDLING CORPORATION LIMITED )
in the presence of Witnesses - )
)
) S
1) Name: _____________________ )
Signature ) NBHC
)
2) Name: _____________________ )
Signature

AND

)
SIGNED BY Mr./Ms. __________________, )
Proprietor/Partners/Director/Authorized )
Signatory )
for and behalf of ________________________. )
) S
in the presence of Witnesses - )
) CLIENT
Name: _____________________________. )
)
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)
Signature: _____________________________.

Name: _____________________________.

Signature: _____________________________.

ANNEXURE – A

DESCRIPTION OF GODOWN / WAREHOUSE

Location No. 1

Owner of Warehouse : _____________________________ i

Full Postal Address of Owner : _____________________________ i


_____________________________
_____________________________

Full Postal Address of Warehouse: _____________________________ i


_____________________________
___________________________
__

Area & Capacity of Warehouse : Sft i


MTs

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