Power of Corporation to borrow money.

Loans

1. (1) Subject to the provisions of section 92 of this Act and section 31 of the Reserve Bank of India Act, 1934, the Corporation, in pursuance of a resolution passed at a special meeting, convened for the purpose, may by the issue of debentures or otherwise on the security of the immovable property vested in the Corporation (or of all or any taxes, duties, tolls, cesses, fees and dues) authorized by this Act (or of both the immovable property and all or any taxes, duties, tolls, cesses, fees and dues) raise a loan of any money which may be required:—
   • (i) for the construction of works under this Act, or
   • (ii) for the acquisition of land for the purposes of this Act, or
   • (iii) for the repayment of a loan raised under this Act or any other loan or debt for the repayment of which the Corporation is liable: Provided that—
   • (i) No loan shall be raised for the construction of any work other than permanent work, which expression shall include any work of which the cost should in the opinion of the State Government be spread over a term of years;
   • (ii) No loan shall be raised without the previous sanction of the State Government;
   • (iii) The terms upon, the period within and the method by which the loans is to be raised and repaid, shall be subject to the approval of the State Government; and
   • (iv) The period within which the loan is to be repaid shall in no case exceed fifty years.
2. (2) When any sum of money has been borrowed under sub-section (1):—
   • (i) No portion thereof shall, without the previous sanction of the State Government be applied to any purpose other than that for which it was borrowed; and
   • (ii) No portion of any sum of money borrowed under clause (i) of sub-section (1)

shall be applied to the payment of salaries or allowances of any municipal officers or servants, other than those who are exclusively employed upon the works for the construction of which the money was borrowed.

1. (3) The amount of the loan, the period within which it shall be repaid, and the terms upon and the method by which the loan is to be raised and repaid shall be notified by the State Government.