THIS AGREEMENT OF LEASE made this ………………………………………… day of …………………….. BETWEEN ……………………….. Co. Limited, a company incorporated under the Companies Act 1956 with its Registered Office at ……………………………………….., hereinafter called the LESSOR (which expression shall, unless repugnant to the subject or context thereof include its successors and assigns) of the One Part, AND ……………… Co. Ltd., a company registered under the Companies Act 1956 and having its Registered Office at ……………………………………….., hereinafter called the LESSORS (which expression shall, unless repugnant the subject or context include its successors and permitted nominees) of the Second Part, ………………….. Co. Ltd., a company registered under the Companies Act 1956 and carrying on business at ……………………. hereinafter called a CO-LESSEE (which term shall include its successors, nominees and assigns) of the Third Part and (1)…………. s/o ……………r/o …………………working for gain at ……………… and (2) …………. s/o ……………r/o …………………working for gain at ………………, working for gain at ………………………. both of them jointly and severally are referred to as the GUARANTORS (which expression shall, unless repugnant to the subject or context shall include their heirs and successors) of the Fourth Part.
WHEREAS the LESSEE is desirous of installing and utilising the equipments referred to in the Schedule I attached hereto has approached the LESSOR and has request the LESSOR to acquire the said equipments and/or such other equipments which may from time to time be specified in Schedule I to be executed by and between the LESSOR and the LESSEE and thereafter to lease-out the same to the LESSEE.
AND WHEREAS in consideration of the LESSOR entering into this agreement with the LESSEE at the request of the guarantors, the guarantors have guaranteed the due performance of all the terms and conditions herein agreed to by the LESSEE and to pay the LESSOR all indebtedness and liabilities of the LESSEE to the LESSOR.
AND WHEREAS the LESSEE has agreed to pay to the LESSOR a one time non-adjustable fee to be called the “Lease-Management Fee” of Rs. …………… (Rupees ……….) immediately on execution of this Agreement.
AND WHEREAS the parties hereto have decided to enter into this agreement for the purpose of recording the terms and conditions of lease of the said equipments and also enable the parties by mutual consent to make and attach, from to time, Schedule to this agreement, containing relevant particulars and specific terms and conditions, if any.
NOW THEREFORE THESE PRESENTS witnesseth and the parties herein agree as follows:
1. Definitions. In this agreement, unless the context requires otherwise the following expressions shall have the following meanings, viz.,
(a) Commencement date for lease. The commencement date shall be such date as may be specified in the Schedule hereunder written. There may be different dates of commencement of lease in respect of different equipments described in the Schedule attached from time to time and made an integral part of these presents.
(b) Equipments. The equipment described in Schedule to the Agreement acquired/purchased/imported by the LESSOR at the request of the LESSEE from the supplier named in the Schedule and leased to the LESSEE and includes all individual items comprised in the equipment or any item or part thereof during the period of this Agreement, and until the equipment is returned to the LESSOR in pursuance hereof.
(c) Fixed period. The fixed period of the lease as stated in Schedule which is non-cancellable by the LESSEE and/or the LESSOR except as provided herein.
(d) Lease rentals. Lease rentals shall mean the lease rent to be paid by the LESSOR and shall include any increase in the rentals as provided herein.
(e) Person includes any person (natural or juridical) and shall include any form of association of persons.
(f) Schedule. The Schedule or Schedules which may now or from time to time incorporated hereunder as an integral part of this Agreement.
(g) Acquisition cost. Acquisition cost shall mean the aggregate of the sums paid/incurred by the LESSOR on account of or in relation to the acquisition of the equipment, irrespective of when such is paid or incurred and where the amount referred to in Schedule is lesser than such aggregate, such aggregate shall be deemed to have substituted the amount mentioned in Schedule effective from the commencement date.
2. Terms of lease.
(a) The LESSOR hereby gives on lease and the LESSEE hereby takes on lease, the equipments for the fixed period from the respective commencement dates as specified in the Schedule subject to the terms, conditions, covenants and stipulations contained herein and in schedules hereunder written. The LESSEE shall have an option to renew the lease as provided hereinafter at the time of its determination. The LESSOR hereby agree to transfer unto the LESSEE the right to use by way of lease the equipments specified in the Schedules attached hereto and/or to be attached from time to time to this agreement on and from the respective commencement dates specified in respect of the individual items in the said Schedules and the LESSEE hereby to take on lease the equipments for the fixed period subject to the terms, conditions, covenants and stipulations contained herein and/or the individual Schedules signed by the parties pursuant to this agreement.
(b) Lease rentals. The LESSEE shall pay to the LESSOR during the continuance of this agreement lease rentals and other charges as are specified in the Schedule subject to the provisions for variation of the lease rentals as hereinafter provided. The said lease rentals shall be paid punctually on their due dates to the LESSOR by the LESSEE whether demanded or not and without any deduction or abatement. The LESSOR at his option may recover from the LESSEE in a lump beginning of the lease or at the time of their incurrence, as the case may be, the expenses incurred by the LESSOR to the extent the same are not included in the said acquisition cost.
(c) Obligation to pay rentals is absolute. The LESSEE shall pay the instalments of rentals regularly and punctually without any deduction or abatement and without any reference to the state, description, use or performance of the equipment.
(d) Increase in lease rentals. Without affecting the LESSEE’S obligation to pay the rental for the fixed period on the respective due dates and without prejudice to the right of the LESSOR, any arrear of rentals payable hereunder shall be increased by the sum relatable to the overdue period.
(e) Payment of rentals. The LESSOR may require the LESSEE either at the inception of the lease or at any time thereafter to give to the LESSOR any cheques, promissory notes or any other acceptable instrument for all or any sums payable under this Agreement, immediately or in future, and such cheques or notes or other instruments shall be deemed to have been given for adequate consideration already received by the LESSEE and shall not absolve the LESSEE from his liability to pay the said sum hereunder until the cheque, note or other instrument is duly realised.
(f) Dishonour of negotiable instruments. In the event of any cheque, note or other instrument given by the LESSEE in payment of any of the sums payable hereunder being returned unpaid or dishonoured the cheque, notes or other instrument, the LESSOR shall be entitled to levy on the LESSEE a sum of Rs. 1,000 for each such return, without prejudice to its right to taking such other actions against the LESSEE as may be available under the law.
3. Payment of security deposit. The LESSEE shall pay to and keep deposited with the LESSOR, at the inception of the lease, the sum as mentioned in schedule as and by way of Security Deposit to ensure due compliance by the LESSEE of the terms and conditions of the lease including the redelivery of the equipment. The said deposit shall be refundable at the end of the latest lease tenure without interest as mentioned in Schedule provided the LESSEE is not in default under any of the terms and conditions of this lease. Form the amount to be so refunded, the LESSOR shall be entitled to make the following deductions.
(a) where any sum, which is ascertainable at the time of such refund and has become due to be paid by the LESSEE to the LESSOR as per this Agreement, including any sum deemed to be unpaid;
(b) where any sum has become payable by the LESSEE to the LESSOR the exact quantum whereof is not ascertainable at the time of such refund, an estimated amount thereof, including interest, if any;
(c) where, in view of the continuing indemnities provided by the LESSEE hereunder or for any other reason, it is likely that any liability on the lease hereunder shall arise in future, the LESSOR may retain such part of the deposit as it things is necessary to take care of such liability. The part so retained shall be adjustable against the liability of the LESSEE to the extent the same remains unsatisfied, and the balance, if any, shall be refundable to the LESSEE after all such apprehended liabilities have been fully settled;
PROVIDED that the LESSOR shall not be entitled to retain any sum in pursuance of this clause, if the LESSEE shall furnish a guarantee from a back acceptable to the LESSOR, for reimbursement of the apprehended liability, or otherwise secures such reimbursement is a manner acceptable to the LESSOR.
4. Redelivery of the equipment by the lessee on termination
(a) Upon termination of this Agreement either by efflux of time or otherwise under this Agreement, the LESSEE shall, on its own volition and without any demand from the LESSOR deliver the equipment at such time and place as may be directed by the LESSOR in good repair, order and workable condition (subject to normal wear and tear).
(b) In the event of the LESSEE not so returning the equipment within a period of 15 days from the date of termination, the LESSEE shall be deemed to be in unauthorised possession of the equipment, and if it continues to so retain the equipment even after a period of 15 days of a written demand raised by the LESSOR to peacefully return the equipments the LESSOR shall be take such criminal and/or civil action as it may be advised:
PROVIDED that nothing contained in the aforesaid clause shall be deemed to have been taken any effect and force in the event of the LESSEE opting to take the equipment on lease during the secondary lease period.
5. Payment of consideration to be pre-requisite. It is expressly understood by the LESSEE that the payment of the consideration hereunder to the LESSOR is a necessary pre-requisite under all circumstances for obtaining any right of possession or use of the equipment.
6. Lessor’s right to assign the receivables, etc. The LESSOR may assign, hypothecate or create any lien upon or in any other manner deal with or encumber the equipment covered under this lease or any interest therein in favour of the LESSOR’S Bank(s)/financial institution(s) or any other financier or creditor, or may assign, transfer to any person, receivables or any interest in the lease or any part thereof, and the consent of the LESSEE to such assignment, hypothecation, encumbrance or transfer, if any, is hereby given and any notice to the LESSEE is hereby waived by the LESSEE. In case the LESSOR has obtained finance against the equipment from any Bank(s), the LESSEE does hereby agree to:
(a) assign all or any part of the lease rentals in favour of the Bank(s), and to make payment of such lease rentals directly to the Bank(s), if so desired by the LESSOR;
(b) comply with such other terms and conditions as the LESSOR may agree with the Bank, including the power of the bank to cause an inspection of the equipment to be any time and from time to time during reasonable hours on any day during the continuance of the agreement.
7. Rights of the lessor during the period before delivery of the equipment.
(a) The equipment shall be delivered by the supplier/manufacturer to the LESSEE or to the LESSOR or to any agent or either of them, as the case may be, and as may be instructed by the LESSOR, and it is hereby agreed that the entire risk, cost or any outgoing pertaining to the said delivery shall be at the cost and risk of the defaulting party. The LESSOR makes no representation as to the time to be spent in delivery of the equipment, and the LESSEE must ensure that the equipment is delivered by the supplier within such time as may be stipulated by the LESSOR. Any failure on the part of the LESSEE in ensuring such delivery shall entitle the LESSOR to treat the agreement of the lease revoked and recover from the LESSEE the amount advanced to the supplier together with the financial costs referred to above. In case of revocation of the agreement of lease under this clause, the LESSOR shall have a full and/or lying at its place for the purpose of recovery of the amount of advance and the financial costs referred to above.
(b) Notwithstanding anything to the contrary contained in any provisions of the agreement it is explicitly agreed by and between the parties that in the event of any misstatement, or any material adverse change in circumstances including any change in the Government policies taking place after execution of this agreement but before complete draw down of the lease assistance as a result of which, in the opinion of the LESSOR, the LESSEE ceases to be an acceptable risk then any further draw down may be discontinued by the LESSOR and the LESSOR shall have the option to exercise its right to terminate the lease in respect of equipment already delivered and so far as possible the parties shall be restored to their original position.
8. Revocation of agreement. Notwithstanding anything contained hereinabove and without any prejudice to such further or other conditions in the letter sanctioning lease finance, the agreement of the LESSOR to lease the equipment to the lease shall, at the option of the LESSOR exercised at any time before the commencement of the lease, be revocable, in the following circumstances.
(a) if the LESSEE makes any material misstatement in furnishing or causing to furnish any information to the LESSOR that might have been used by the LESSOR for any purpose pertaining to this agreement to lease, whether such misstatement formed the basis of this agreement or not;
(b) if the cost of the equipment to be acquired by the LESSOR for lease is higher than the comparable other equipment by the same or other supplier, delivered at the same place;
(c) if the equipment to be acquired by the LESSOR for lease does not comply with generally acceptable quality standards;
(d) if the LESSEE’S financial position as known at the time of the execution of this agreement undergoes adverse change or any other material change takes place of the corporate character or financial position of the LESSEE, or any material change occurs in the assessment of the LESSEE’S credit quality, or the value and quality of the asset undergoes adverse change.
9. No claim against the lessor. It is agreed that no claim of any nature whatsoever shall lie against the LESSOR in the event of any bona fide revocation of the agreement on grounds mentioned herein.
10. Lessor’s right and lessee’s obligation. In the event of such revocation, the LESSOR may, at his discretion, acquire the equipment and deal with it in such a manner as the LESSOR may choose, or the LESSOR may cancel the order for acquisition, and claim the refund of any advances made on the LESSEE’S behalf from the supplier, and in either event, claim from the LESSEE the whole of the loss and all costs suffered.
11. Collateral security. The LESSEE shall after inception of the lease place the documents/certificates mentioned in Schedule hereunder as and by way of collateral security with the terms and conditions of the lease including the return of the equipment at the end of the lease period and thereupon the LESSOR shall be deemed to be holding beneficial interest in the properties represented by the documents/certificates with the LESSOR, which the LESSOR shall hold until complete satisfaction of the LESSOR’S claims under the lease. During the terms of the lease, the LESSEE shall not transfer, encumber or in any way affect the LESSOR’S beneficial interest in the properties referred to herein.
12. Lessee’s initial covenants purchase/acquisition for the purpose of the lease. The LESSOR affirms and declares that the LESSOR has bought/acquired/shall buy/acquire the equipment for the purpose of its lease hereunder only to the LESSEE and subject to the compliance by the LESSEE of the initial covenants herein and/or the Schedules and unless the LESSEE refuses or fails or omits to take the equipment on lease, the LESSOR shall not, after purchase or acquisition of the equipment, divert the equipment for any other purpose.
PROVIDED that nothing in this clause shall apply in case of termination of the lease under this Agreement.
13. Consents given by the lessee.
(a) The LESSEE affirms and declares that he has requested the LESSOR to purchase/acquire the equipments for effective and bona fide use by the LESSEE itself and the LESSEE further covenant that;
(b) the execution of this Agreement and the use and the operation of the equipment by the LESSEE will not;
(c) contravene any provision of any statute, rule and regulations which the LESSEE is subject to and to the lessee’s Memorandum and Articles of Association;
(d) result in any breach of any agreement or arrangement to which the LESSEE is a party;
(e) affect any right of LESSOR in any manner whatsoever in respect of the subject equipment;
(f) the LESSEE has obtained all consents, licences, approval, etc. as are necessary for or in connection with the execution, validity and enforceability of the agreement and for the import, storage, installation, use and operation of the equipment and undertakes to keep them effective and in force during the period of this Agreement and carry out all such tests or inspections as may be required statutorily or otherwise till the equipment is delivered back to the LESSOR in good order and condition;
(g) the LESSEE undertakes to abide by all the conditions of any licence, permit or other rule applicable to the LESSEE’S business or to the equipment;
(h) the LESSEE affirms that the LESSEE has satisfied itself about the LESSOR’S right to enter into the lease hereunder;
(i) the LESSEE affirms that, save as otherwise provided in this Agreement, no right, title or interest, in the equipment shall pass to the LESSEE by virtue of these presents. The LESSEE shall at no time contest or challenge the LESSOR’S sole and exclusive right, title and interest in the equipment. The LESSOR and LESSEE hereby confirm that their intent is that the equipment shall at all times remain as the property of the LESSOR. The LESSEE also agrees and undertakes not to sell, assign, sublet, pledge, hypothecate or otherwise encumber or lie upon or against the equipment or remove the equipment from the factory or site where originally put to use or located, without the prior consent of the LESSOR in writing, which consent the LESSOR agrees will not be unreasonable withheld.
(j) Though the LESSOR will request the manufacturer/supplier to effect delivery on or before the date of commencement of the rentals, yet, if for whatsoever reason the delivery is not effected by the manufacturer/supplier by that date, the LESSOR shall not be liable for any loss suffered by the LESSEE thereby. Lease rentals shall be deemed to commence from the date of commencement of the rentals as specified in Schedule. This will be accepted as a constructive delivery of the equipment to the LESSEE. In the event that the LESSEE cause cancellation of or instructs the LESSOR to cancel the purchase order/contract with the supplier of the equipment or the LESSEE shall refuse or be unable for any reason to accept delivery, the LESSEE shall be entitled to terminate the lease of the equipment and the LESSEE shall pay to the LESSOR on demand all costs, charges, expenses, damages incurred by the LESSOR arising out of such an action of the LESSEE.
(k) The LESSEE hereby expressly agrees that the purchase order for individual items of equipment under this agreement shall be placed forthwith by the LESSOR at the instance of the LESSEE. In the event of undue delay on receiving such instructions for placement of orders beyond 45 days from the date of this agreement the LESSOR shall reserve the right to review this agreement.
(l) The LESSEE agrees to provide annual certificates regarding the depreciation eligibility of the equipment and that the equipment is in good working order and condition and also that the equipment is in physical possession of the LESSEE.
(m) The LESSEE hereby covenants that subject to any hypothecation or any sort of security created and/or to be created by the LESSOR in favour of its bankers for any loan or other financial facilities granted or to be granted to the LESSOR by such bankers the equipment will remain the absolute property of the LESSOR and undertakes not to sell, transfer the same to any party or encumber the same in any manner without the prior written consent of the LESSOR.
(n) The LESSEE affirms that the LESSEE has satisfied itself about the LESSOR’S right to enter into the lease agreement.
14. Rights and obligations of the co-lessee. All references in this Agreement to the LESSEE shall be deemed to refer to the CO-LESSEE as well. The CO-LESSEE shall have all the right of LESSEE and CO-LESSEE shall at all times be jointly and severally liable for the performance of the obligations and duties of the LESSEE under this Agreement.
15. Lessee’s continuing covenants. During the tenure of this lease and till the equipment is delivered back to the LESSOR in good order and proper condition, subject to normal wear and tear, the LESSEE shall discharge the obligations mentioned hereunder.
16. Lessee’s obligations under Public Liability Insurance Act 1981.
(a) LESSEE will keep insured which have been declared to be of hazardous substances under the notification issued from time to time under the Public Liability Act 1981 or any rule framed thereunder or under any notification or clarification issued by the appropriate authority, or under modification or addendum thereto accordance with the said Act, and which are employed at or used in any of the LESSEE’S undertakings, whether or not connected with the operations of the equipment.
(b) LESSEE will pay the premium to be paid under the insurance police to be taken out by the LESSEE in respect of such “hazardous” substances in accordance with the said Act. The LESSEE shall produce for the inspection of the LESSOR or his authorised representative at the LESSOR’S office the original showing the payment of premium in respect of the said insurance immediately after the payment has been effected and furnish a xerox copy thereof to the LESSOR within seven days from the date of obtaining such a receipt.
(c) LESSEE will take out Insurance Policy in the name and for benefit of the LESSOR and bankers of the LESSOR or such other names as LESSOR may advise in this regard.
(d) LESSEE will reimburse to LESSOR the amount spent by LESSOR, in the event of the LESSEE failing and/or neglecting to purchase the Insurance Policy under the said Act and/or keeping the same renewed for the benefit of the LESSEE and/or his banker, without prejudice to the rights of the LESSOR to terminate such an event
(e) LESSEE will permit LESSOR to appropriate the amount paid by LESSOR as aforesaid from out of the security deposit lying with and further replenish the amount by which the security deposit falls short of the required quantum.
(f) LESSEE will keep indemnified the LESSOR from any suit, proceedings, actions, claims, demands and/or prosecutions and/or the costs, charges and expenses relation to the liability, suffered by the LESSOR on account of any such hazardous substance or on account of failure of the LESSEE to purchase the Insurance Policy, as aforesaid, as also to pay any cost or expenses related to the LESSOR’S defending any suit/proceeding/action/claim/prosecution brought or launched against the LESSOR.
(g) Lessee to affix name plate. LESSEE will keep affixed nameplate or other mark on the equipment identifying the sole and exclusive ownership thereof of the LESSOR by putting the following in block letters viz. under lease from LESSOR, Leasing Ltd. and not allow or permit the same to be removed or defaced during the continuance of this agreement.
17. Lessee not to part with possession. LESSEE will keep the equipment in its possession and control of its plant or premises specified in the Schedule(s) and not to remove the same therefrom without the prior written permission of the LESSOR.
18. Lessee not to convert the property. LESSEE will not affix permanently the equipment to any immovable property nor in any way impair the identifiability, ascertainability, severability and redeliverability of the equipment, nor to adversely affect the value of the equipment when severed for redelivery to LESSOR.
19. Lessee not have any right in equipment as bailee. LESSEE will hold the equipment s bailee of LESSOR and not claim any right, title or interest in the equipment other than that of a LESSEE or contest the LESSOR’S sole and exclusive ownership thereof.
20. Lessee to make proper use of the equipment. LESSEE will use the equipment carefully in the same way as would have been the case with the LESSEE’S own equipment, and in accordance with the supplier’s instructions/guidelines, if any maintain the same in good working condition and repair at its own cost and expenses and comply with all statutory and other requipments of law, rules, regulations and directions applicable to the storage or installation or governing use and operation of the equipment and not do or allow to be done any act or thing by which the warranties and performance guarantees given by the manufacturer would be invalidated or become unenforceable, wholly or partly, and not to do any act nor omit to do anything whereby the value of the equipment be reduced or depleted. The LESSEE will also not sub-lease/hire out the equipment nor will deal with the equipment in any manner except as a LESSEE, on the terms and conditions herein contained without prior written consent of the LESSOR.
21. Lease to pay outgoings pertaining to the equipment. LESSEE will duly pay or cause to be paid all rates, taxes, licence fees, surcharges, registration charges and other outgoings payable in respect of the equipment or the storage, installation, use or operation or of the premises where the same is kept or used and on demand produce to the LESSOR all receipts and other evidences of such payment.
22. Lease to insure the equipment. It is agreed by and between the parties hereto that the LESSEE shall, for and on behalf of the LESSOR:
(a) take out insurance policy on the equipment against loss in transit, erection and installation risks, maritime risks, wherever necessary prior to the despatch of the equipment, or alternatively to ensure that the insurance on the equipment in respect of the said risks is effected by the manufacture/supplier before delivery of the equipment. Such insurance policy will be in the name of the LESSOR to be described therein as the owner and as the loss payee;
(b) immediately after the delivery of the equipment, insure the equipment and keep the same insured throughout the term of this Agreement against loss or damage by accident, lightning, fire, flood, storm, earthquake, tempest, falling aircraft, malicious damage, riot, strike, civil commotion, explosion, implosion, accidental, mechanical, electrical breakdown of the equipment etc. and where necessary against third party claims in respect of equipment used in hazardous industries and those requiring environmental protection as also for other risks usually covered by insurance in the type of business for which the equipment is for the time being used to the satisfaction of the LESSOR upto the full replacement value thereof under a Comprehensive Policy of Insurance in joint names of the LESSOR and the LESSEE with an endorsement showing the LESSOR as the owner and as the loss payee;
(c) punctually pay all premia payable under such insurance and send the policy and the receipts (or Photostat copies thereof) for such payments to the LESSOR and do everything necessary to maintain the said insurance in full effect and not to do any thing whereby the said insurance will or may be vitiated, failure of the LESSEE to handover such Insurance Policy and premium receipt (or Photostat copy thereof) to the LESSOR within seven days from (a) the date of delivery of the equipment in the case of an original policy or (b) the due date for renewal of the policy in case of renewal of the policy, shall constitute failure to insure the equipments. In such an event, the LESSOR without prejudice to its rights under the Agreement and without any notice to the LESSEE, may effect the insurance, as aforesaid, and the LESSEE shall reimburse to the LESSOR the amount of premium paid and the cost incurred therefor;
(d) where the equipment or any part thereof is lost, destroyed, stolen or damaged by the negligence or act of a third party, the LESSEE shall immediately notify the LESSOR the same and shall not compromise any claim without the consent of the LESSOR and shall, unless the LESSOR in its sole discretion directs otherwise, take over the conduct of all negotiations and shall also at its own expense and risk take such proceedings as the LESSOR shall direct. The LESSEE hold, all sums recovered inclusive of any claims under the Insurance taken, in trust for the LESSOR and hand over the same to the LESSOR immediately upon receipt thereof without claiming any thereof on any account whatsoever and shall apply the same or such part thereof as the LESSOR directs. In no case shall claim/sum of money be adjusted or set off against any sum payable by the LESSEE to the LESSOR hereunder;
(e) if the equipment be damaged during the continuance of this Agreement and in the opinion of the LESSOR it is economic that such damage be made good, all insurance money payable under the said Insurance may, if the LESSEE agrees, be applied in making good the said damage;
(f) if the equipment be destroyed or damaged to such an extent as to be, in the opinion of the LESSOR, incapable of economic repair then at the LESSOR’S sole discretion the Insurance moneys payable under the said Insurance shall, at the option of the applied so far as possible in replacing the equipment of similar type and quality, in which event the fresh equipment shall be deemed to have been leased by the LESSOR under this Agreement and the LESSEE shall hold the same on lease subject to the terms and conditions as are contained in this Agreement;
(g) the lease of the equipment so lost/destroyed will be deemed to have been terminated except in the case where the LESSOR elects to exercise its option under cl. (f) above;
(h) without prejudice to the aforesaid right of the LESSOR in the event of such termination, the LESSOR shall also be entitled to recover from the LESSEE who shall be liable to pay to the LESSOR all sums payable hereunder.
23. Lease not to transfer of dispose of equipment or interest in the lease. Unless otherwise agreed to by the LESSOR in writing the LESSEE will not transfer, assign or otherwise dispose of or purport to transfer, assign or dispose of the LESSEE’S right or obligations or interest hereunder by way of mortgage, charge, sub-lease, sale or other assignment, hypothecation, pledge, hire, encumbrance, conducting arrangement, licence or otherwise in any manner or part with the possession of the equipment or any part thereof or allow or purport to allow or create any lie, charge, attachment or other claim of whatever nature on the equipment or any part thereof. The LESSEE shall also not without the prior written consent of the LESSOR charge the location of the equipment or in case of mobile equipment where it is normally parked when not in use.
24. Lease not to make alterations in the equipment-additions to belong to the lessor. Not to make any alteration, addition or improvement to the equipment or change the condition thereof without consent of the LESSOR and all additions, improvements and attachment of any nature whatsoever, including any spares, accessories or other materials added by the LESSEE when made to the equipment by the LESSEE (whether at its own cost or not and whether with or without the approval of the LESSOR) shall belong to the LESSOR and be deemed to be part of the equipment and shall be subject to the terms and conditions of this Agreement.
25. Lease to indemnify lessor for loss or distress. Indemnify and keep indemnified the LESSOR at all times, against any loss or seizure of the equipment under distress execution or other legal process or loss or destruction or damage to the equipment by fire, accident or any other cause, from any claim or demand arising out of the import, storage, installation use or operation of the equipment or any risk or liability for death or loss of life or limb of any person whether employee of the LESSEE or of third party or not or injury or damage to any property of the LESSEE or of any third party and hold the LESSOR harmless against all losses, damages , claims, penalties, expenses, suits or proceeding of whatsoever nature made, suffered or incurred consequent thereupon and for this purpose take out such workmen’s compensation/third party insurance cover as may be necessary, customary or in practice in the business carried on by the LESSEE or as may be directed by the LESSOR in that behalf.
26. Lease not to alienate the premises where equipment is kept. Not to sell, mortgage, charge, demise, sub-let or otherwise dispose of any land or building on or in which the equipment is stored, installed, used or operated or enter into any agreement or arrangement to do any of the aforesaid acts without prior approval in writing of the LESSOR. The LESSEE shall in any event ensure by giving such notices as may be necessary that such sale, mortgage, charge, demise, sub-letting or other disposition, as the case may be, is subject to the rights of the LESSOR as the owner of the equipment to repossess the equipment at any time (whether or not the same or any part thereof shall have become affixed to the said land or buildings) and for that purpose to enter upon such land or building and reclaim and repossess the equipment lying thereat. The LESSEE shall obtain declaration/undertaking containing on lien/charge over the equipment and recognising the right and access of the LESSOR to the equipment, from such transferees.
27. Lease to reimburse lessor’s incremental costs. On demand pay to the LESSOR all costs, charges and expenses incurred by the LESSOR in connection with the equipment or the preservation, protection or enforcement of the LESSOR’S rights or of retaking or repossessing of the equipment or any other expense incurred by the LESSOR on the understanding that the parties have agreed to keep the LESSOR free from all costs except financial costs on the purchase of the equipment.
28. Lease to regularly furnish lessee’s financial statements. Furnish to the LESSOR its audited Balance Sheet and Profit and Loss Account simultaneously with the issuance thereof to the shareholders of the LESSEE and such other information as may be required by the LESSOR from time including certificates as to the state of the equipment or its manner of accounting, upkeep or use by the LESSEE.
29. Variation of lease rentals based on back lending rates. The LESSEE irrevocably agrees and undertakes that in the event of the bank lending rates chargeable to the LESSOR by its banker(s)/financial institutions is increased/deceased the lease rentals reserved hereunder are liable to upward or downward variation, as the case may be, in the manner described hereinafter. In such an event, the lease rentals will stand increased/decreased, as the case may be, by Rs. 0.50 paise per month for every Rs. 1,000 of lease finance for every percentage of increase/decrease in the said bank lending rate. However, in case the bank lending rate falls below 16% p.a. no further reduction in lease rentals will be made. The LESSEE agrees that such lease rentals corresponding to the bank lending rate of 16% p.a. will be the bare minimum rentals which the LESSEE has agreed and undertaken to pay to the LESSOR. The LESSEE further agrees that a letter from any of the LESSOR’S Bankers indicating revised rate of interest consequent to any announcement of increase/decrease in interest rates shall be the final and conclusive evidence of the extent and the date of such increase/decrease.
30. Variation of lease rentals based on adverse variation in depreciation allowance and increased sales tax, customs and excise duties, etc.
(a) The LESSEE agrees that the lease rentals hereunder are based on the assumption that the LESSOR shall be entitled to claim depreciation based on the acquisition cost of the equipment at the rate specified in respective Schedule for the whole of the lease starting from the year of commencement of the lease. Schedule the LESSOR not be able to claim the said benefit on account of any change in law or rules or for any act or omission of the LESSEE or for any other reason whatsoever either for the whole or any part of the lease period and at those rates, the lease rentals specified in the respective Schedules shall stand altered so as to compensate the LESSOR for the loss in the tax benefits thereby and maintain the post tax implicit rate of return to the LESSOR as would have been available to the LESSOR had the depreciation allowance been granted as stipulated in the respective Schedules, all factors other than the depreciation allowance being kept constant for that purpose.
(b) The LESSEE guarantees that the equipment shall be maintained in such a position and its use shall be so monitored as to ensure to the LESSOR that the equipment has at the end of the lease period a minimum residual value as mentioned in the respective Schedules.
(c) Seizure and / or confiscation of the equipment. The LESSEE undertakes not to do or omit to do any such act which may result in seizure and/or confiscation of the equipment by the Central or State Government or local authority or any public officer or authority under any law for the time being in force and in the event of seizure or confiscation of other equipments belonging to the LESSEE and coming in the process of such a seizure or confiscation to keep the equipment separate from the block of similar or other assets belonging to the LESSEE.
(d) Not to claim any relief, allowances, etc. The LESSEE undertakes not to claim any relief by way of reduction, losses or grant available to the LESSOR as the owner of the equipment under the Income Tax Act 1961 or any other statute, rules, etc. that are issued or may be issued by the Government of India or any statutory authority or not to do or allow to be done any act, deed or thing whereby the LESSOR is deprived, either wholly or partly, of any such relief by way of reduction, allowances or grants. The LESSEE shall at the end of each accounting year of the LESSOR provide to the LESSOR such information as it may require to claim relief by any deduction, allowance or grant as the owner of the equipment under the Income Tax Act 1961 and the LESSEE undertakes to comply with and observe at all times all the terms and conditions to be complied with in the use and operation of the equipment so as to entitle the LESSOR to obtain such a relief.
(e) The LESSEE hereby expressly covenants with the LESSOR that. As between the LESSOR and the LESSEE and their respective successors in title, the equipments hereby given on lease or agreed to be given on lease shall remain the exclusive property of the LESSOR and shall continue to remain in the ownership of the LESSOR notwithstanding that the same may have been affixed to any land or building and the LESSEE shall not have any right, title or interest otherwise than as a bailee. The LESSEE shall be responsible for any damage caused to any such land or building by affixing the equipment thereto or removal, if any, effected by the LESSOR or the LESSEE and shall indemnify the LESSOR against any claim made against it in respect of such a damage. To allow the LESSOR, notwithstanding any instructions issued to the contrary by the LESSEE, to appropriate at its absolute discretion any money received from the LESSEE as follows:
Firstly, towards the costs, charges and expenses incurred by the LESSOR for receipts or recovery of such sums;
Secondly, towards overdue charges and other money demanded but unpaid;
Thirdly, towards the lease rentals due and payable; and
Lastly, towards the dues owed by the LESSEE under any other agreement entered into with the LESSOR.
31. Additional covenants in respect of imported equipments.
(a) The LESSEE warrants that without prejudice to the generality of provisions contained in other clause hereof the execution of the Agreement and the use and operation of the equipment by the LESSEE will not contravene any provision of Import Control Regulations, Foreign Exchange Regulations, Customs Act or any other statute, rule and regulation to which the equipment and/or the LESSEE is subjected;
(b) The LESSEE further warrants that:
The LESSEE has obtained all consents, import licence or other licences, Reserve Bank approvals or any other approvals and permissions as are necessary for or in connection with the acquisition by import of the equipment, clearances from the relevant authorities, for execution, validity and enforceability of this Agreement and for the storage, installation, use and operation of the equipment and undertakes to keep them effective and in force during the period of this Agreement is delivered back to the LESSOR in good order and condition.
Under the applicable provisions of the Import Export Policy and the rules made thereunder and the other relevant rules prevailing for the time being the LESSEE is entitled to import the equipment if the LESSEE had bought the equipment and was using and operating the same as the owner thereof;
(c) The LESSEE agrees and undertakes that, in the event of the acquisition of the imported equipment being financed out of the foreign currency lines of credit or foreign currency loans (hereinafter referred to as FCLC) availed by LESSOR for this purpose, it shall;
(d) Bear the entire exchange risks on the foreign currency funds utilised by the LESSOR out of the FCLCs;
(e) reimburse LESSOR with all such expenses, charges as are required to be paid by the LESSOR in respect of FCLCs to the Foreign Bank/Institution concerned;
(f) observe and meticulously follow all the covenants in respect of such FCLCs as may be advised by the LESSOR;
(g) execute all such documents, deeds, undertakings, etc. as may be required under the covenants of the FCLC;
(h) The LESSEE agrees and undertakes that it shall comply with all the terms, conditions and obligations of the import licence, including submission of reports and other requirements in that behalf to such authorities as may be required and shall also provide to the LESSOR all such information’s as may be required to be furnished by the LESSOR to such authorities and as may be required in terms of the import licence for the equipment, in default thereof the LESSEE agrees to indemnify the LESSOR for all claims and demands made upon the LESSOR by reason of such default by the LESSEE.
32. Additional conditions in case of motor vehicle. In case the equipment be a motor vehicle within the meaning of the Motor Vehicles Act 1988, the LESSEE shall comply/ensure compliance with the further conditions mentioned in Schedule hereunder.
33. Lessee’s guaranteed residual value. The LESSEE guarantees that the equipment shall be maintained in such a position and its use shall be so monitored so as to ensure to the LESSOR that the equipment has at the end of the lease periods a minimum residual value as mentioned in Schedule.
34. Acceptance of the equipment-acceptance of delivery by the lessee and lessor’s disclaimer on account of quality or fitness of the equipment.
(a) By accepting the delivery of the equipment (deemed or actual) the LESSEE shall be deemed to have examined the equipment and to have found it complete, in proper order and condition and entirely fit its purpose and the LESSEE does not and will not, at any time, have any claim against the LESSOR in respect of or arising out of the equipment.
(b) The LESSOR shall not be responsible for any direct, indirect or consequential loss to the LESSEE or third party, arising from any delay in delivery and/or installation of the equipment either by the action of the manufacturer or otherwise howsoever. The LESSOR will not be liable or responsible for any damage to the equipment either before or in the process of the delivery.
35. Lessee’s confirmation of cost, quality, etc. The LESSEE acknowledges, represents, declares, agrees and confirms that:
(a) Lessee to obtain timely delivery. The LESSEE alone, as an agent of the LESSOR, shall be responsible for obtaining timely delivery of the equipment and also for obtaining all the necessary clearances, statutory or otherwise, required for obtaining such delivery.
(b) Lessee’s confirmation as to quality, etc. The equipment is of the required size, design, capacity and manufacture, suitable for its purpose and is selected by the LESSEE relying entirely on its own judgment and not on any statement or representations made by the LESSOR or its agent or servants.
36. Antecedent negotiations made by the lessee, specific clauses in case of a sale and lease back.
(a) The LESSOR has bought the equipment on a specific requisition from the LESSEE and for the purpose of lease to the LESSEE, and for no other purpose, and the actual cost of the equipment has been negotiated and ascertained by the LESSEE, which the LESSOR has paid/shall pay at the LESSEE’S instructions. It is expressly understood by the agreed between the parties that the equipments shall be ordered by the LESSOR or LESSEE as the agent of the LESSOR on the specifications given by the LESSEE and the choice of the supplier is exclusively of the LESSEE.
PROVIDED that where for the whole or any part of the equipment, the LESSEE himself is the supplier/manufacturer, the LESSEE affirms that the cost of the equipment to the LESSOR is the fair market price of the equipment in an arm’s length transactions and that in the event of it being established at any time in future that the cost to the LESSOR is more than such fair market value, the LESSOR may, at his sole discretion, have either of the following recourses the LESSEE;
(b) If the fair value of the equipment or part thereof supplied by the LESSEE is substantially less than the cost of the equipment to the LESSOR, the LESSOR may treat this agreement as having been entered into with a basic mistake of fact and on misrepresentation by the LESSEE, and may proceed to treat the lease as terminated, and forthwith demand upon the LESSEE to pay up all the referred to herein, along with any other or further damages that the LESSOR might have suffered as a result of such a misrepresentation, including any loss of tax benefit and all the consequences arising therefrom; or
(c) the LESSOR may treat the lease to have been terminated to the extent the cost of the equipment or the part thereof supplied by the LESSEE exceeds the fair value of asset so established, and ask the LESSEE to immediately pay up the rentals proportionate to such excess discounted at the rate mentioned herein, along with any other or further charges that the LESSOR might have suffered as a result of such a misrepresentation, including any loss to tax benefits and all the consequences arising therefrom; or
(d) the LESSOR may claim appropriate damages, by revision of rentals or otherwise and/or security deposit to cover himself to the extent of such excess, and continue the lease in its status quo ante.
37. Selection of the equipment by the lease. It is clearly understood by the LESSEE that the LESSEE is not the manufacturer or dealer of the equipment. The equipment so purchased/acquired by the LESSOR has been selected and approved by the LESSEE.
The LESSOR has not at any time made nor does it hereby make any representation of warranty whatsoever with respect to the merchantability, quality, conditions, durability, suitability or fitness for the purpose of use, operation or performance of the equipment.
38. Disclaimer of any liability by the lessor regarding quality, etc. The LESSOR hereby disclaims any liability on any account pertaining to the quality, fitness or suitability of the equipment to the LESSEE and in order to give effect to the warranties, guaranties or other facilities provided by the manufacturer, the LESSOR hereby appoints the LESSEE as agent but the LESSEE shall not have any claim against the LESSOR in the event of the manufacturer not providing to the benefit of any such warranty, indemnity, guarantee or other facility.
39. All Indemnities to survive the agreement. All indemnities contained under this agreement shall survive the termination of the agreement or on expiry of the respective lease hereunder sought to created as the case may be.
40. Imposts, taxes and other charges. The LESSEE shall during the period of this agreement and till the equipment is delivered back to the LESSOR in good working order and condition, bear all imposts, charges and other duties, taxes and penalties as may be levied from time to time by the Government or any other authority pertaining to or in respect of this equipment and/or agreement, the acquisition of the equipment (including purchase tax or differential tax or other sums in case the LESSOR has concessional rate of tax), any incremental duty or other tax payable with reference to the purchase or acquisition of the equipment or this transaction. Further, the LESSEE shall reimburse to the LESSOR all taxes (including sales tax), duties or other sums imposed now or hereafter, on the equipment or on this transaction or on the rentals hereunder, and where the LESSOR has not paid the same under an honest belief formed under competent advice that the same is not payable, the LESSEE shall also reimburse to the LESSOR the interest or penalty payable in respect of the same. The LESSEE agrees to pay immediately on demand these sums whether the same are ascertained during or after the termination of this lease.
41. Termination. On the occurrence of any events specified in cls. 43 to 52 below, the LESSOR shall be entitled, without prejudice to any other right or remedy which the LESSOR may have under this agreement or otherwise in law and notwithstanding any subsequent acceptance of rentals or indulgence shown to the LESSEE, to terminate this lease, without any notice at any time after the occurrence of such events.
42. Failure to pay rentals or dishonour of cheques, etc. If the LESSEE fails to pay the rentals on the dated and in the manner stipulated in the respective schedule(s), or other monies payable hereunder within 15 days of their becoming due, whether demanded or not, or if a cheque, bill, promissory note or other instrument issued, made, drawn or accepted by the LESSEE for discharge of the lease is rentals is returned unpaid, for any reason whatsoever, when presented for payment, the LESSOR shall be entitled to terminate this lease.
43. Breach of any other terms of the lease. If the LESSEE fails or neglects to observe or perform or commits or allows to be committed a breach of any of the terms, conditions, provisions or stipulations, of this agreement on its part to be observed and performed (other than failure to pay any sum hereunder when due and payable) and if such breach is remediable, fails to remedy the same within fourteen days of notice by the ESSOR specifying such default and requiring such default to be remedied the LESSOR may terminate the lease.
44. Breach of mandatory conditions. If the LESSEE fails or neglects to observe or perform or commits or allows to be committed breach of any of the terms, conditions, or regulations in respect of the use, storage, operation or keeping of the equipment imposed by any authority or by the manufacturer, the LESSOR may terminate the lease.
45. Misrepresentation, etc. by the lessee. If any representation or warranty whether precedent or subsequent made or deemed to be made by the LESSEE in or in relation to this agreement is or proves to have been incorrect in any material respect or the particulars supplied by the LESSEE about itself or about the supplier or the equipments are found to be incorrect, the LESSOR.
46. Resolution of winding up, etc. If the LESSEE passes any resolution for its winding up or a petition for winding up be presented against it by any of its members or creditors or otherwise or if a receiver is appointed for the whole or part of the assets, properties or undertakings of the LESSEE or enters into any composition with its creditors, the LESSOR may terminate the lease.
47. Distress of the equipment, etc. If the LESSEE does or suffers any act or thing or omits to do or suffers any act or thing whereby or in consequence of which the equipment may be or is likely to be distressed, endangered, attached or taken in execution under any legal process or by public authority, the LESSOR may terminate the lease.
48. Apprehended default. If the LESSEE by any act or omission gives to the LESSOR reasonable grounds to consider that its rights may be prejudiced or be in jeopardy, the LESSOR may terminate the lease.
49. Default under other agreements. If the LESSEE commits any default under any other agreement of lease or other financing arrangement between the LESSOR and the LESSEE, the LESSOR may terminate the lease.
50. Adverse material changes. If there takes place any material change in the financial or corporate of the LESSEE as a result of which it becomes reasonably apprehensible that the lease rentals hereunder may not be paid as due or there may be any other default under agreement or that the LESSOR’S rights and entitlements hereunder may be endangered, or if the LESSEE’S business or management is taken over, the LESSOR may terminate the lease.
PROVIDED that it is agreed, without affecting the generality of the foregoing, that the following changes shall be regarded as material changes, with reference to the financial year immediately preceding the one in which this agreement commences:
(a) decrease in net worth, that is, the aggregate of paid up capital and free reserves (including credit balance in P&L account and premium, but excluding unrealised revaluation reserves) by 40% or more;
(b) decrease in return on investment, that is, profits before tax, interest and lease rentals, to long term funds including assets financed under finance lease to the extent not repaid, consecutively for two financial years, by 40% or more;
(c) decrease in turnover excluding stock adjustments and excluding extraordinary or non-recurring liens consecutively for two financial years by 40% or more;
(d) decrease in debt (including obligations under finance lease), service coverage ratio by or more than 20% consecutively for the last two financial years of the LESSEE.
51. Offence pertaining to negotiable instruments. If the LESSEE fails to provide to the LESSOR cheques, promissory notes, or other instruments as required by the LESSOR, whether post-dated or otherwise, for discharge of the LESSEE’S obligations hereunder, or having provided to the LESSOR any such instrument the LESSEE, by any act or omission on the part of the LESSEE impedes the possibility of such instrument being honoured when presented for payment, the LESSOR may terminate the lease.
52. Lessor’s rights and lessee’s obligations on termination. On the termination of agreement pursuant to provisions contained in this agreement the LESSOR may terminate the lease and take steps mentioned hereunder.
53. Repossession of the equipment by the lessor and rights for that purpose. The LESSOR, shall, without any notice or permission, be entitled to remove or repossess the equipment and for that purpose by itself, its servants or agents, enter upon any land, buildings or premises where the equipment is situated or reasonably believed by the LESSOR to be situated for the time being and for such entry, the LESSEE hereby gives to the LESSOR an irrevocable license, and detach and dismantle the same and the LESSOR shall not be responsible for any damage which may be caused by any such detachment or removal of the equipment. It is hereby clarified that the LESSOR may make use of reasonable force for the purposes of repossession of the equipment and repossess the equipment with anything that is in or in it, or attached, fastened, bolted, or in any other manner affixed to it, and remove, if necessary by dismantling all obstructions in the way of repossession of the equipment, and generally do all such thing as a reasonable to would do on being unlawfully deprived of his personal property to reinstate himself in possession of his property expediently and with least damage to his property.
54. Recovery of defaulted amounts and costs. Without prejudice to and in addition to the LESOR’S right provided hereinabove, the LESSOR shall also be entitled to recover from the LESSEE and the LESSEE shall be bound to pay to the LESSOR the following amounts, viz.
(a) the entire amount of the rental already fallen due and in arrears together with interest as provided hereunder;
(b) the entire amount of lease rentals for the unexpired period of lease discounted at the prevailing prime lending rate of commercial banks;
(c) all other payable hereunder which may have become due along with interest from the date on which due and all such other sums that become due or may be estimated to become due in view of the events or defaults already having occurred;
(d) the cost of all repair and maintenance of the equipment to render and maintain it in good working order and condition and all cost, charges and expenses incurred by the LESSOR pursuant to the agreement and repossessing the equipment and in enforcing its remedies however occasioned.
PROVIDED that in case the equipment is sold by the LESSOR then its net sale proceeds, or otherwise its market value as may be estimated by the LESSOR shall be allowed as a deduction from the aggregate amount calculated under this cluse.
The parties hereto agree and record that the amounts to be paid by the LESSEE to the LESSOR as aforesaid have been bona fide and satisfactorily estimated to be the proper and reasonable amount that may be suffered by the LESSOR as and by way of liquidated damages and are not deterrent or in terrorem.
55. Appropriation of rentals. All rentals or other sums paid by the LESSEE herein shall be deemed to have been appropriated against the liabilities of the LESSEE hereunder immediately upon payment thereof.
56. Sale etc. of the equipment by the lessor, sale through the agency of the lessee and lessee’s rewards. In the event of termination of the lease the LESSOR shall also be entitled to sell, realise or dispose of the equipment in such a manner as the LESSOR may think fit and the LESSOR shall not be bound to account to the LESSEE in any manner whatsoever, nor to give any preemptive right to the LESSEE.
PROVIDED that where in case of termination of lease by efflux of time or premature termination as provided herein the LESSOR may, in case he wants to dispose of the equipments, organise open market bids for the proposed sale of the equipment, and may appoint the LESSEE or any other person to organise such sale, and in case the sale proceeds exceed the minimum guaranteed value mentioned in Schedule hereunder, the LESSOR may pass on such excess to the LESSEE after deducting therefrom the expenses in organising such sale, and as a reward for good maintenance of the asset by the LESSEE.
PROVIDED that the LESSOR shall allow the LESSEE an opportunity of participating in such an open market sale.
57. Premature termination, advance payment, etc. The LESSOR may, but shall not obliged to, accept any payments before they are due and allow in respect thereof such concessions on account of advance payment as the LESSOR may think fit, and such concession shall not vest in the LESSEE any right to similar concession in future.
58. Premature termination.
(a) The LESSOR may, but shall not be obliged to, allow the LESSEE to foreclose the lease before the expiry of the terms of the lease, and in that case the LESSEE shall:
(b) Pay to the LESSOR all the sums referred to in clauses hereinabove after deducting the sum mentioned in the proviso to that clause.
(c) Deliver the equipment to the LESSOR in good working order and condition, reasonable wear and tear excepted.
59. General conditions-time related upward revision of amounts due.
(a) Where any sum payable by the LESSEE hereunder is payable on the specified date, and is paid by the LESSEE after such date, the difference between the date of payment and the specified date shall be taken as the overdue period.
(b) Where any sum payable by the LESSEE hereunder is payable on demand by the LESSOR, and is paid by the LESSEE after three days, from the date of demand, the difference between the date of payment and the date three days after the date of demand shall be taken as the overdue period.
(c) Where any sum payable by the LESSEE hereunder does not fall under cls. (a) and (b) above and is payable without demand raised by the LESSOR, and is paid by the LESSEE after days from the date on which the LESSEE first becomes aware of such liability, the difference between the date of such payment and the date three days after the date on which the LESSEE first becomes award of such a liability shall be taken as the overdue period.
(d) All sums paid by the LESSEE having an overdue period shall automatically stand increased by Rupee one per thousand per week and the LESSEE shall pay such sums as increased hereunder and any sum payable hereunder but paid without over due charge shall be deemed to be unpaid to the extent of the automatic increase provided hereunder.
(e) The LESSEE undertakes and affirms that the provision for automatic increase of any sum paid with an overdue period:
(i) is an essential part of the sums payable hereunder and its non-payment shall be taken as a breach of an essential condition by the LESSEE;
(ii) is a genuine estimate of the commercial loss of opportunity and other damages suffered by the LESSOR on account of untimely payment of sums payable hereunder;
(iii) is capable of variation by a written notification by the LESSOR in case of a continuing, recurring or persistent default in payment of sums hereunder by the LESSEE, and the LESSEE agrees not to call in question LESSOR’S discretion in treating the LESSEE’S default as failing under this clause.
60. Payments to be clear of deductions. All payments to be made by the LESSEE to the LESSOR hereunder shall be made free from and clear of, any payment or deduction on any account.
61. Place for payment. All monies due and payable by the LESSEE to the LESSOR pursuant to the agreement shall be paid by telegraphic, telex or mail transfer to the account of the LESSOR at ………………………….. or such other place as the LESSOR may designate or by cheque or bank draft drawn in favour of the LESSOR on a scheduled bank and shall be so paid as to enable the LESSOR to realise at par, the amount sought to paid on or before the due date to which the payment relates. Credit for all payments by cheque/bank draft will be given only on the realisation thereof by the LESSOR or on the date to which the payment relates, whichever is later.
62. Service of notices. Any notice to the LESSEE by the LESSOR shall be in writing and posted to the LESSEE’S address first above written and for proving service by the LESSOR it shall be sufficient to show that the communication was complete from the LESSOR. Any notice required to given by the LESSEE to the LESSOR shall be in writing and be sent to the LESSOR’S address first above written. Any change in the address of the LESSEE shall be notice to the LESSOR by Registered Post in order to make the same cognizable for the purpose of this clause.
63. Time to be of essence. Time shall be of the essence in this agreement in so far as it relates to the observance or performance by the LESSEE of all or any of the obligations including payment of any sum hereunder.
64. Warranties. The LESSOR agrees that the LESSEE shall be entitled to the benefits of the warranties provided by the manufacturer/suppliers of the equipment. Any performance guarantee provided by the supplier shall be in the joint names of the LESSOR and the LESSEE and shall be enforceable by the LESSOR or the LESSEE or both of them. For this purpose, the LESSOR, if so requested by the LESSEE, shall authorise the LESSEE for enforcing the performance by the supplier of the equipment for any warranties or performance guarantees relating to the equipment.
65. Waiver or remission not to have precedent value-demands or notices waived. The failure of the LESSOR to insist upon the punctual performance of any of the obligations of the LESSEE hereunder, or the failure of the LESSOR to exercise any right or remedy available to the LESSOR under this agreement or any failure of the LESSOR to require payment from or by the LESSEE when due sum owing hereunder, or any extension of credit or any forbearance on the part of the LESSOR shall not constitute waiver by the LESSOR of any subsequent or continuing default by the LESSEE hereunder nor shall the same prejudice, affect or restrict the rights and powers of the LESSOR hereunder. All demands for payments and performance and all notices of non-payment or other default hereunder, are hereby waived by the LESSEE.
66. Option to renew. Unless the LESSEE is in default under this Agreement at the relevant time the LESSEE shall have an option to renew the lease after expiry of the present agreement by efflux of time for a further period on such rental and other terms as would be mutually agreed upon between the parties.
67. Affirmation as to statements made by the lessee. The LESSEE declares and represents that every statement and representation made every particular given by it in relation to this transaction are true and correct. By execution hereof, the respective signatories hereby certifies that he/they has/have read this agreement including the Schedules hereto and that he/they is/are duly authorised to execute this agreement on behalf of the respective parties.
68. Agreement to be sole and exclusive. This agreement represents the entire agreement of lease between the parties hereto and shall be capable of variation in writing by a note of amendment signed by and on behalf of the LESSOR the LESSEE and guarantors.
69. Interpretation of words. Words importing the plural shall, except where the context otherwise requires, include the singular and vice versa. Clause heading shall not control clear meaning of the text, but may be used to clarify the intention in case the same is not clear.
70. Arbitration. Except where it has been provided otherwise, any dispute or difference arising of or in connection with the agreement between the parties including any dispute or difference relating to the interpretation of the agreement or any clause thereof shall be referred to the sole arbitration of Mr. XY or of a person nominated by Mr. XY (with summery powers) and the provisions of the Arbitration and Conciliation Act 1996 and rules framed thereunder and any amendment thereto, from time to time, shall apply. No objection shall taken on the ground that the arbitrator so appointed is an employee of the LESSOR or is in any way associated with the LESSOR. It is made clear that the venue of Arbitration proceedings will be the sole discretion of the Arbitrator and no objection shall be entertained from any party in this regard. The award of the arbitrator shall be final, conclusive and binding on all the parties. The arbitrator shall be competent to decide whether any matter of dispute or difference referred to him falls within purview of arbitration as provided for above and/or any matter relates to arbitration under the Arbitration and Conciliation Act 1996.
IN WITNESS WHEREOF the parties hereto have caused these presents to be executed in duplicate on the day, month and year first herein above-written.
(1) Signed and delivered by the within named LESSOR under the hand of its authorised signatory Mr. ………………….. at …………………….
(2) Signed and delivered by the within named LESSEE under the hand of its authorised signatory Mr. ………………….. and ……………………. Mr. ……… in pursuance of a resolution passed by its Board of Directors/Authorisation by the partners dated ………………………………… at ………………….
(3) Signed and delivered by the within named CO-LESSEE under the hand of its authorised signatory(ies) Mr. ………………….. and ……………………. Mr. ………in pursuance of a resolution passed by its Board of Directors dated ………………………………… at ………………….
In the presence of: