Application for loan from a District Development Bank to be supported by affidavit.

18. (1) Every person who applies for a loan from a District Development Bank shall give a declaration on an affidavit in such form as may be prescribed before an officer specified by the State Development Bank in this behalf that the movable or immovable property furnished as security for the loan is free from encumbrances and that he is in actual possession thereof, and that he has the right to furnish such security in favour of the District Development Bank. (2) Notwithstanding anything contained in any law for the time being in force, where an affidavit under sub-section (1) in respect of any movable or immovable property is false, or defective, the District Development Bank shall, subject to the provisions of section 20, have a first charge on all other movable and immovable properties of the applicant, and all such properties shall be deemed to have been included in the security furnished by the applicant for the loan granted to him by the District Development Bank. (3) Any person who makes a false affidavit under sub-section (1) or makes any statement which is false in any such affidavit shall, in addition to action under sub-section (2), be punishable also under the Indian Penal Code, 1860 (45 of 1860). (4) The amount of loan that may be sanctioned on the basis of an affidavit made under sub-section (1) shall be subject to such limit as may be prescribed.