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The Auto Loan Security Agreement is a crucial document in Indian vehicle financing transactions, used when a financial institution provides funding for vehicle purchase while maintaining security interest in the vehicle. This agreement, governed by Indian law and regulatory framework, establishes the legal relationship between the lender and borrower, detailing the loan terms, security creation through hypothecation, borrower's obligations, and lender's enforcement rights. It ensures compliance with RBI guidelines, SARFAESI Act, and Motor Vehicles Act while protecting both lender's security interest and borrower's rights. The document is essential for both retail and commercial auto financing, incorporating necessary provisions for vehicle maintenance, insurance, default scenarios, and recovery procedures.

1. Parties: Identifies the lender (financial institution) and borrower with complete details including registration/incorporation details for the lender and personal/business details for the borrower

2. Background: Outlines the context of the loan application, purpose, and the agreement to create a security interest in the vehicle

3. Definitions: Defines key terms used throughout the agreement including Loan, Security Interest, Event of Default, etc.

4. Loan Details: Specifies loan amount, interest rate, tenure, EMI details, and repayment schedule

5. Security Interest Creation: Creates and defines the security interest in the vehicle, including hypothecation details

6. Borrower Representations and Warranties: Borrower's confirmations regarding their ability to enter into the agreement, vehicle ownership, and absence of other encumbrances

7. Borrower Covenants: Ongoing obligations including vehicle maintenance, insurance, usage restrictions, and notification requirements

8. Events of Default: Lists circumstances constituting default and their consequences

9. Rights and Remedies: Lender's rights upon default, including repossession and sale rights under SARFAESI Act

10. Insurance: Requirements for comprehensive insurance coverage and assignment of insurance benefits

11. Notices: Process and addresses for serving notices between parties

12. Governing Law and Jurisdiction: Specifies Indian law as governing law and sets jurisdiction for disputes

13. Execution: Signature blocks and execution formalities