Loan Agreement between employee and employer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOAN AGREEMENT

 

The Agreement is made on the 12th day of February 2021, between Mr. xyz, Son of Shri Amar Das Wadhwa Resident of ADDRESS. and having permanent address at ADDRESS.

 

(hereinafter referred to as the “BORROWER”  , which expression shall unless it be repugnant to the subject or context thereof, include his successors and assigns ) of ONE PART and COMPANY NAME , a company incorporated under the Companies Act, 1956 and having its Corporate office at Company Address (hereinafter referred to as the “COMPANY” , which expression shall ,unless it be repugnant to the subject or context thereof, include his successors and assigns ) of the SECOND PART.

 

WHEREAS the Borrower has requested and approached the Company with his loan application dated 12th February 2021 for lending a sum of Rs. 2,00,000 (Rs. Two  Lacs  only) as a personal loan due to some urgent financial commitment for the purpose of which the Company agrees to pay to the Borrower because of his employment in the company and to execute the agreement governing the lending of Money for the said purpose.

 

 

NOW THEREFORE THESE PRESENTS WITNESSTH

  1. The Borrowers’ application dated 12th February 2021 and the approval from the management parallel through mail regarding the request for Loan deemed to constitute the Basis of the Agreement and Borrower hereby warrants the correctness of each and every statement and particulars therein contained and undertake to carry out the Borrowers’ proposals therein set forth.
  2. The Borrower undertakes to notify in writing to the Company of any circumstances affecting the correctness of any of the particulars set forth in the Borrowers’ Proposals immediately on the happening or occurrence of any circumstances.
  3. The Company has agreed to Pay 2,00,000 (Rs. Two  Lacs  only) vide electronics transfer .Disbursement of Rs. 2,00,000 on or around 2nd  week February 2021 drawn on Kotak Mahindra Bank, New Delhi to the Borrower for a period of not more than 12 months, which is repayable in 12 monthly equal installments payable every month starting from the end of Feb 21 , with direct deduction from the salary earned starting from the Salary pay out of Feb 21.

 

  1. The Borrower has agreed to deposit undated cheque of Rs. Two Lakh only with the Company to be deposited in the Bank by the Company for recovery in the event the Borrower fails to pay the installment before the due date. The Borrower hereby acknowledges and in consideration provides undated Cheque in favor of the Company as security, which can be encashed in case of irregular recovery.

 

  1.  The Loan is subject to the existence of Employment of the Borrower with the Company. The Borrower undertakes not to leave the company for employment elsewhere or in any circumstances whatsoever before repaying the Loan in full pending in his name at any given point of time.

 

  1. However, the company can decide to terminate the employment of the Borrower for any circumstances or reason whatsoever, and in such an event the amount outstanding in the name of the Borrower for the said loan on that date shall become immediately payable to the company. The Borrower has also agreed that any amount outstanding as credit to him in the form of unpaid salary (including notice pay etc.), allowances, perks, bonus, incentives, Leave encashment, reimbursement of expenses or any other sum payable to him by whatsoever name at the time of separation from employment shall be adjustable from the Loan and the balance if any shall be paid by the borrower in case the amount of Loan exceeds the outstanding in the name of the borrower.

 

  1. Nothing contained herein, will affect the right of the company for Notice pay recovery in case the Borrower choose to resign from the company. The amount payable/ receivable for the Loan etc. shall be considered only after amount of Notice Pay recovered.

 

  1. It is hereby agreed between both the parties and declared that the Company shall not charge any interest on the loan as it is given purely in the course of employment to meet the personal needs of the Borrower for the time being.

 

  1. The said loan will be utilized by the Borrower only to meet the personal requirement, but not to lend the money further or for any other purposes whatsoever.

 

  1. The Borrower shall provide the copy of all the papers showing the amount utilized for the personal purposes (Optional)

 

  1. If the Borrower fails to pay the said loan or any portion thereof in terms of the Agreement or shall commit any breach of any covenant to be observed or performed on its part herein contained and on failure of the Borrower, the Balance Loan thereof shall become immediately payable.

 

  1. Any notice to be served to the Borrower from the Company by sending at the address given above by general post or by registered acknowledgement due or by personal delivery shall be assumed to be acknowledged by the Borrower.

 

 

  1. The Borrower agrees that a minimum monthly deduction of Rs. 16,667 (Rupees sixteen thousand six hundred sixty seven only) shall be made before crediting the Salary to his Account payable by the Company till the amount of Loan lasts.

 

  1. The deduction can also be made from any payment other than monthly salary payable to the Borrower like Bonus, Incentives, Annual Allowances or any other remuneration deemed fit, fully or partially, if the Loan or the installment of such loan is outstanding at the date of disbursement of such income.

 

  1. The Company will not charge any interest on Loan so provided, but the Income Tax Liability on the “deemed interest” on such Loan every year shall be calculated as per the rules provided in the Income Tax Act’1961 and added to the normal Income Tax Liability for the purpose of TDS calculation by the Company and will be deposited to the credit of Central Government as per the Income Tax Rules.

 

  1. The Borrower shall give the acknowledgement of the receipt of money through electronic transfer to his Kotak Mahindra Bank account no. 9212218951 as soon as the amount is credit to the account.

 

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this agreement to be executed by the Borrower and respective authorized representative of the Company

 

 

 

Witness:                                                          Mr. xyz

                                                                        Borrower

                                                                        Date: 05/05/2021

1.        

 

                                                                        For

                                                                        (Company)

2.

 

 

                                                                         

                                                                        AUTHORIZED SIGNAOTRY                  

                                                                        Date: 05/05/2021

 

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