Application of municipal property and funds within and without the municipal area.

The municipal fund and all property vested in a Council shall be applied for the purposes of this Act within its area: Provided that it shall be lawful for the Council with the sanction of the Director or any officer duly authorised by him in this behalf — (a) to incur expenditure in the acquisition of land or in the construction, maintenance, repair or purchase of works beyond the limits of its area for the purpose of obtaining a supply of water required for the inhabitants of the municipal area or of providing the supply of electrical energy or gas for the use of the inhabitants of the municipal area or of establishing slaughter-houses or places for the disposal of night-soil or sewage or carcasses of animals or for drainage works or for the purpose of providing mechanically propelled transport facilities for the conveyance of the public or for the purpose of setting up of dairies or farms for the supply, distribution and processing of milk or milk products for the benefit of the inhabitants of the municipal area or for any other purpose calculated to promote the health, safety or convenience of the inhabitants of the municipal area; or (b) to make a contribution towards expenditure incurred by any other local authority or out of any public funds for measures affecting the health, safety or convenience of the public and calculated to benefit directly the residents within the limits of the contributing Council: Provided further that nothing in this section or in any other provision of this Act shall be deemed to make it unlawful for a Council when with such sanction as aforesaid it has constructed works beyond the limits of the municipal area for the supply of water or electrical energy or gas or for drainage as aforesaid— (i) to supply or extend to or for the benefit of any persons or buildings or lands in any place whether such place is or is not within the limits of the municipal area, any quantity of water or electrical energy or gas not required for the purposes of this Act within the municipal area, or the advantages afforded by the system of drainage works on such terms and conditions with regard to payment and to the continuance of such supply or advantages as shall be settled by agreement between the Council and such persons or the occupiers or owners of such buildings or lands, or (ii) to incur any expenditure, on such terms with regard to payment as may be settled as aforesaid, for the construction, maintenance, repairs, or alteration of any connection pipes or any electric or gas supply lines or other works necessary for the purpose of such supply or for the extension of such advantages, or (iii) to make contribution towards the Construction, establishment or maintenance of institutions referred to in clause (t) of sub-section (3) of section 51, subject to the condition that the total of such contributions in any financial year shall not exceed two per cent. of the general revenues (excluding Government grants) of the Council for the previous financial year: Provided that such contributions may, with the prior approval of the Government, exceed two per cent. but not five per cent. of such revenues.