Chapter VII BORROWING POWERS OF BOARD

(1) A Board may raise loans with the previous sanction of the Government on such terms and conditions as may be prescribed by the State Government for the purposes of this Act. (2) Loans may be raised by the Board in the open market on Board securities issued by it or may be obtained from the Government or a bank approved by the Government. (3) The terms of all loans shall be subject to the approval of the State Government.

(1) The Board may with the sanction of the State Government prescribe the form in which the securities of the Board shall be Issued by the Board and the mode in which, and the conditions subject to which, they may be transferred. (2) The holder of any board security in any form may obtain in exchange therefor, upon such terms as the Board may from time to time determine a Board security in other form prescribed by regulations. (3) The right to sue in respect of money secured by the Board securities shall be exercisable by the holders thereof for the time being without preference in respect of priority of date.

(1) Notwithstanding anything contained in section 45 of the Indian Contract Act, 1872,— (1) (a) when any Maritime Board's security is payable to two or more persons jointly and either or any of them dies, the Maritime Board's security shall be payable to the survivor or survivors of those persons, and (b) when any such security is payable to two or more persons severally and either or any of them dies, the security shall be payable to the survivor or survivors of those persons or to the representatives of the deceased or to any of them. (2) This section shall, apply whether such death occurred or occurs before or after the appointed day. (3) Nothing herein contained shall after any claim which any representative of a deceased person may have against the survivor or survivors under or in respect of any security to which sub-section (1) applies. (4) For the purposes of this section, a body incorporated or deemed to be incorporated under the Companies Act, 1956, or the Co-operative Societies Act, 1912, or any other enactment for the time being in force, whether within or without India shall be deemed to die when it is dissolved.

Where two or more persons are joint holders of any Board security, any one of those persons may give an effetual receipt for any interest payable in respect of such security unless notice to the contrary has been given to the Board by any other of the holders.

Notwithstanding anything in section 15 of the Negotiable Instruments Act, 1881, no endorsement of a Board security which is transferable by endorsement shall be valid unless made by signature of the holder inscribed on the back of the security itself.

Notwithstanding anything in the Negotiable Instruments Act, 1881, a person shall not by reason only of his having endorsed any Board security be liable to pay any money due either as principal or as interest thereunder.

(1) The signature of the person authorised to sign Board securities on behalf of the Board may be printed, engraved or lithographed or impressed by such other mechanical process as the Board may direct on such securities. (2) A signature so printed, engraved, lithographed impressed shall be as valid as if it had been inscribed in the proper handwriting of the person so authorised.

(1) When any Board security is alleged to have been lost, stolen or destroyed either wholly or in part and a person claims to be the person to whom but for the loss, theft or destruction it would be payable, be may, on application to the Board and on producing proof to its satisfaction of the loss, theft or destruction and of the justice of the claim and on payment of such fee, if any, as may be prescribed by regulations, obtain from the Board an order for— (a) the payment of interest in respect of the security said to be lost, stolen, or destroyed, pending the issue of a duplicate security; and (b) the issue of a duplicate security payable to the applicant. (2) An order shall not be passed under sub-section (1) until after the issue by the Board of the notification of the loss, theft or destruction in the manner prescribed by regulations. (3) A list of securities in respect of which an order is passed under sub-section (1) shall be published in such manner as the Board may prescribe by regulations. (4) If at any time before the Board become discharged under the provisions of this Act from liability in respect of any security the whole of which is alleged to have been lost, stolen or destroyed such security is found, any order passed in respect thereof under this section shall be cancelled.

(1) The Board may, subject to such conditions as it may prescribe, on the application of a person claiming to be entitled to a Board security or securities issued by it, on being satisfied of the justice of the claim and on delivery of the security or securities receipted in such manner and on payment of such fee, if any, as it may prescribe, convert, consolidate or subdivide the security or securities, and issue to the applicant a new security or securities accordingly. (2) The conversion, consolidation or sub-drivision referred to in sub-section (1) may be into security or securities of the same or diffierent classes or of the same or different loans.

Notwithstanding anything contained in the Indian Limitation Act, 1963— (i) on payment of the amount due on a Board security on or after the date on which payment becomes due to, or (ii) when a duplicate security has been Issued under section 61. or (iii) when a new security or securities has or have been Issued upon conversion, consolidation or sub-division under section 62, the Board shall be discharged from all liabilities in respect of the security or securities so paid or in place of which a duplicate or new security or securities has or have been issued— (a) in the case of payment, after the lapse of six years from the date on which payment was due; (b) in the case of a duplicate security after the lapse of six years from the date of the publication under sub-section (3) of section 61 of the list in which the security is first mentioned or from the date of the last payment of interest on the original security, which ever date is later; (c) in the case of a new security issued upon conversion, consolidation or sub-division, after the lapese of six years from the date of the issue thereof.

All loans raised by the Board under this Act shall be a first charge on— (a) the property vested or which may hereafter during the currency of the loans become vested in the Board other than— (i) any sum set apart by the Board— (1) as the sinking fund for the purpose of paying off any loan; or (2) for the payment of pension to its employees; or (ii) the provident or pension fund established by the Board; and (b) the rates leviable by the Board under this Act.

The Government shall have in respect of loans made by it to the Board the same remedies as holders of Board securities issued by the Board; and the Government shall not be deemed to possess any prior or greater rights in respect of such loans than holders of such Board securities: Provided that when the terms of any such loan made before the appointed day expressly provide that the loan shall have priority over all other loans in the matter of repayment by the Board, such loan shall have priority.

The Board may, with the previous sanction of the State Government apply any sums out of moneys which may come into its hands under the provisions of this Act and which can be so applied without prejudicing the security of the other holders of the Board securities, in repaying to the Government any sum which may remain due to it in respect of the principal of any loan although the time fixed for the repayment of the same may not have arrived: Provided that no such repayment shall be made of any sum less than ten thousand rupees; and that if such repayment is made, the amount of interest in each succeeding instalment shall be so adjusted as to represent exactly the interest due on the outstanding principal.

(1) If in respect of a loan raised by the Board under this Act which is not repayable before the expiration of one year from the date of the loan, the State Government by an order in writing so directs the Board shall set apart half yearly out of its income, as a sinking fund, a sum sufficient to liquidate the loan within a period which shall not in any case unless the previous consent of the State Government has been obtained exceed twenty five years; but the maximum period shall not in any case exceed forty years: Provided that a sinking fund need not in the absence of any stipulation to that effect be established in the case of loans taken by the Board from the Central Government or any State Government. (2) Where any sinking fund has, before the appointed day, been established by any authority in respect of a loan raised by it, for which loan, the Board is liable under this Act, the sinking fund so established by that authority shall be deemed to have been established by the Board under this section.

(1) The sums so set apart by the Board under sub-section (1) of section 67 and the sums forming part of any sinking fund referred to in sub-section (2) of that section shall be invested in public securities or in such other securities as the State Government may approve in this behalf and shall be held by Board in trust for the purposes of this Act. (2) The Board may apply the whole or any part of the sums accumulated in any sinking fund in or towards the discharge of the moneys for the repayment of which the fund has been established: Provided that it pays into the fund in each year and accumulates until the whole of the moneys borrowed are discharged, a sum equivalent to the interest which would have been produced by the sinking fund or the part of the sinking fund so applied.

(1) A sinking fund established for the liquidation of any loan shall be subject to annual examination by such person as may be appointed by the State Government in this behalf and the person so appointed shall ascertain whether the cash and the current market value of the securities at the credit of the fund are actually equal to the amount which would have been accumulated if, investment had been regularly made and the rate of interest as originally estimated had been obtained thereon. (2) The Board shall pay forthwith into the sinking fund any amount which the per son appointed under sub-section (1) to conduct the annual examination of the fund may certify to be deficient unless the State Government specifically sanctions a gradual readjustment. (3) If the cash and current market value of the securities at the credit of a sinking fund are in excess of the amount which should be at its credits, the person appointed under sub-section (1) shall certify the amount of the excess and the Board may, with the previous sanction of the State Government reduce or discontinue the half yearly contributions to the sinking fund required under section 67.

Nothing contained in this Act shall be deemed to affect the power of the Board to raise loans under the Local Authorities Loans Act, 1914.

Notwithstanding anything contained in this Act the Board may— (i) borrow moneys by means of temporary overdraft or otherwise by placing the securities held by the Board in its reserve fund or on security of the fixed deposits of the Board in its banks ; (ii) obtain advances from such banks on pledge or hypothecation of its current assets without the previous sanction of the State Government; Provided that such temporary overdrafts or other loans— (a) shall not at any time have a longer currency than six months; and (b) shall not be taken, without the previous sanction of the State Government, if at any time in any year the amount of such overdrafts, or other loans exceeds such amount not exceeding ten lakhs of rupees, as the State Government may fix in this behalf: Provided further that all moneys so borrowed by overdrafts or otherwise shall be expended for the purposes of this Act.

Notwithstanding anything contained in this Act but subject to any other law for the time beaing in force, the Board may, with the previous sanction of State Government and on such terms and conditions as may be approved by that Government, raise for the purposes of this Act loans in any currency or currencies from the International Bank for Reconstruction and Development or from any other Bank or Institution in any country outside India; and no other provision of this Chapter shall apply to or in relation to any such loan unless the terms and conditions of the loan or the approval thereof by the state Government otherwise provide.