I can made a contract in English, later you can get in translated in to Bengali.
Sir, I have full time job and for long time I wished to establish institute/school in my locality, but I do not have enough time and energy to do it myself. A person from Pakur, Jharkhand is in my local masjid working as Emam for last few years and I see him as capable person doing what I wished to do. He has interest in the field of education and people see him positively as well. I am planning to give him loan of 5 lakh rupees to start & run an institute (madrasa with mixed education). I want that he should do the repayment of my loan within 1 years or little more but within next 15 months. I want nothing to do with profit or loss of school/institute earning. He will have full autonomy of the school functioning. What are the contractual conditions I can put intro contract and what kind of contract I should do to make sure that I do not get into trouble, or I should get the full payment without any loss. I want the contract to be in Bengali text.
1) contract should contain a clause that loan of Rs 5 lakhs would be repayed in 2 years
2) that borrower shall give cheque for repayment of loan
3) that borrower authorises you to present cheque on due date
4) in event of dishonour of cheque he will be liable to repay loan with 18 per cent interest rate
1 Let it be a clean loan agreement without mentioning anything about your interest in the stated project.
2. Let there be mortgage of a property of the said Imam for securing the loan.
3. For creating equitable mortgage, the Imam shall have to deposit the original title deed of a immoveable property, may be the school for which you are providing the said loan.
4. There shall have to be a loan agreement also in the instant matter.
Dear Client,
When drafting a contract for this loan arrangement, it's important to be clear and precise to avoid any misunderstandings later on. Here's a basic outline of the contractual conditions you can include:
Additionally, you may have to consider having the contract translated into Bengali by a qualified translator to ensure clarity and understanding by both parties.
Here are the options considering you want your principal amount back in full within 15 months, without any interest or profit:
Options with Repayment Guarantee:
Direct Loan with Promissory Note: This is a simpler option. You provide a loan of 5 lakh rupees to the Imam. However, unlike a traditional loan, you won't charge interest. A promissory note is a legal document signed by the Imam acknowledging the debt and promising repayment within a specific timeframe (15 months in this case). This document can be helpful if there's a need to enforce repayment through legal means, though it's best to avoid this scenario.
Security Deposit: This option involves framing the 5 lakh rupees as a security deposit for the institute's proper establishment and adherence to your initial vision. A legal agreement would outline the terms of the deposit, including its purpose (starting the institute) and the repayment timeframe (15 months). Upon successful establishment and operation for 15 months, the 5 lakh rupees would be returned to you.
Important Considerations:
Legal Agreements: For both options above,, draft a watertight agreement that protects your interests and ensures the Imam understands the repayment obligations.
Guarantor: Consider having a guarantor (another trusted person) co-sign the agreement. This provides an additional layer of security in case the Imam is unable to repay.
Alternative Option with Risk Mitigation:
Remember: While these options offer some safeguards, lending money always carries inherent risk. Carefully evaluate the Imam's credibility and his ability to repay within the timeframe.
By discussing these options with the Imam , you can choose the approach that best balances your desire to support the institute with protecting your principal amount.
Arunkumar Khedia
Advocate Bombay HighCourt
- You should enter into an agreement with him after mentioning the all the conditions of repayment of loan
- Further, for your safety , you can take singed cheque from him and also for the recovery of the amount.
- You can take help of any local lawyer for preparing the said agreement.
You can enter into a loan agreement with the terms that it is a hand loan without interest and the same to be returned within the period as stipulated in the loan agreement.
The agreement can be reduced to writing on a non judicial stamp paper.
You can contact any deed writer in the local and can get the deed drafted in Bengali language as desired.
You can obtain a collateral security towards security for the loan amount.
The security may be any immovable property or a duly signed undated and blank cheque which can be utilised if the borrower fails to return the loan amount on or before the stipulated date.
Thanks for sharing valuable information. My followup question is if I give the loan in stages can I keep the record in the contract paper signed by the person whom I am giving the loan? Where to keep track of small payments?
Dear Client,
By including these elements in the contract, you'll have a clear record of each stage of the loan disbursement and repayment process. This can help ensure that both parties are on the same page and can help resolve any disputes that may arise.
- You can collect the amount in small payments from him after mentioning the date and mode of payments separately on a paper
- This extra ledger must be signed by both the persons.
- Further, in the agreement you should mention that this amount is given by you to him as friendly loan with a promise to refund the loan amount within a period of 15 months
- Further , if not payment of entire loan amount , then you will have right to take legal action against him for the recovery of the friendly loan amount .