Commercial Security Agreement Template for India

The Commercial Security Agreement serves as a fundamental document in secured lending transactions under Indian law, establishing security interests over various types of assets to secure financial obligations. It is commonly used in both corporate and commercial financing arrangements where lenders require security over the borrower's assets as collateral. The agreement must comply with multiple Indian legislations, including the SARFAESI Act, Transfer of Property Act, and Indian Contract Act, among others. It typically includes detailed provisions regarding the creation and perfection of security interests, maintenance of collateral, events of default, and enforcement mechanisms. This document is essential for protecting the lender's interests while providing a clear framework for the borrower's obligations regarding the secured assets.

1. Parties: Identification of the security provider/grantor and the secured party/beneficiary with their full legal names and addresses

2. Background: Context of the security arrangement, reference to any underlying obligations or facilities, and purpose of the security

3. Definitions: Definitions of key terms used throughout the agreement, including description of secured obligations, security assets, and enforcement events

4. Creation of Security Interest: Express provisions creating and granting the security interest over the secured assets

5. Secured Assets: Detailed description and categorization of the assets over which security is being created

6. Secured Obligations: Definition and scope of the obligations being secured, including principal, interest, and other amounts

7. Representations and Warranties: Statements of fact and assurances given by the security provider regarding their authority, ownership of assets, and absence of encumbrances

8. Covenants: Ongoing obligations of the security provider regarding maintenance, insurance, and preservation of the secured assets

9. Further Assurance: Obligation to execute additional documents and take further steps to perfect the security

10. Events of Default: Circumstances that trigger enforcement rights and remedies

11. Enforcement: Rights and remedies available to the secured party upon default

12. Power of Attorney: Appointment of the secured party as attorney to perfect or enforce the security

13. Notices: Process and requirements for serving notices under the agreement

14. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction of Indian courts