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Draft Board Resolution for creating Mortgage of Property to Bank

format of board resolution for creating mortgage of propertyWhen a company applies to any bank for obtaining a loan from them, generally the bank will ask for security as against the loan amount. The company can mortgage any of its immovable properties viz. land, building, etc. in favor of the bank to secure the loan.

An hypothecation / mortgage agreement is entered into between the company and the bank in this regard wherein a conditional right of ownership on such immovable property of the company is transferred to the bank. Here, the company is the mortgagor and the bank is the mortgagee.

Before any immovable property is mortgaged in favor of the bank, the Board's approval has to be obtained first.

Format of Board Resolution for giving authorisation to any Officers to mortgage the company's property for securing credit facilities from the bank

“RESOLVED THAT the immovable property of the company i.e. (description) at (address), bearing regn. no. ............... dated ...................., be mortgaged in favour of the .................... Bank Limited, ...... branch, for securing term loan credit facilities from the bank for an amount up to Rs. ............... (Rupees ........................ only) including the interests, charges, commissions and any other cost thereon.

FURTHER RESOLVED THAT (Name of the Director/ Officer), (Designation) be and is hereby authorised to deposit and deliver to the bank the title deeds of the said immovable property for creating an equitable mortgage thereon in favor of the bank as a security for the due repayment of the said credit facilities.

FURTHER RESOLVED THAT, in the event of default, if the bank sells off the said property, and in the event after satisfying the outstanding amount out of the proceeds of the sold property, if any balance is left, the bank be and is hereby authorised to exercise the right of general lien, thereby appropriating such balance towards satisfying of any secured or unsecured loans, whether partly or fully, taken by the company from the bank, as may be subsisting at that time.

FURTHER RESOLVED THAT (Name of the Director), (Designation) be and is hereby requested to furnish a guarantee up to an amount of Rs. .............. in favor of the bank in his/ her personal capacity for securing of the above mentioned credit facilities.

FURTHER RESOLVED THAT (Name of the Director/ Officer), (Designation) be and is hereby authorised to give all such declarations or confirmations, on behalf of the Company, as may be desired by the bank for sanctioning the credit facilities to the company and further authorised to do all acts, deeds, things and matters as may be required in order to give effect to the foregoing resolutions.

FURTHER RESOLVED THAT (Name of the Managing Director/ Company Secretary), Managing Director/ Company Secretary of the Company be and is hereby authorised to sign a true copy of the foregoing resolutions and forward the same to the bank.”


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