Chapter IV Chapter IV

The Town Fund and Property

Constitution of the Town Fund.--For each town area there shall be formed a Town Fund and there shall be placed to the credit thereof--

1. (a) all fines realised in cases in which prosecutions are instituted for offences committed within the limits of such town area and against the provisions of this Act or of the rules made thereunder, or under any other Act in which provision is made for the credit of such fines to the Town Fund ;
2. (b) all other incomes of the Town Area Committee and such other sum as may be assigned to the Town Fund by any general or special order of the Government.

Control of Town Fund.-Subject to any rules made in this by Government, the Town Fund shall be under the control of Town Area Committee and shall be applied to-

1. (a) the repayment of the principal and interest of any sum advanced as a loan by the Government or of any amount falling due on any loan legally contracted by the Committee or the Sanitation Cess Fund or any fund controlled by or on behalf of the Government for the purposes of this Act ;
2. (b) the payment of the salary and allowances of the town area establishment ;
3. (c) the purchase of stationery and other contingent expenditure necessary for carrying on the business of the Town Area Committee ;
4. (d) the payment of expenses incurred for the maintenance of public roads and drains within the town area in which the maintenance is not done by the Government ;
5. (e) the payment of expenses incurred for the repair of public wells, gardens and tanks or for provisions of such other conveniences for the town area ;
6. (f) the payment of expenses incurred for the promotion of public health, sanitation, drainage, lighting and the like ; and
7. (g) the payment of expenses incurred for carrying out any other measure referred to in section 20 which may be a charge on the Town Fund.

A. Power of Town Area Committee to borrow money.--(1) The Town Area Committee may borrow money by way of loan from the Government or from such other sources and on such terms and conditions as may be approved by the Government.

1. (2) The Committee shall maintain a Sinking Fund for the repayment of any money borrowed under sub-section
2. (1) and pay into the said Sinking Fund such sum as may be fixed for all the money so borrowed.
3. (3) The Sinking Fund or any part thereof shall not be applied towards the discharge of the loan for the repayment of which it is created until such loan is wholly discharged it shall not be used for any other purpose.

Custody of Town Fund.-The Town Fund shall be kept in the State Treasury or with the previous sanction of the Government in any bank in this behalf.

Audit of accounts A. Audit of accounts.-The accounts of the Town Area Committee shall be audited in such manner as may be prescribed.

Authority to contracts.-(1) Subject to the terms of this Act, the Chairman may on behalf of the Committee enter into any contract the value or amount whereof does not exceed Rs. 3000.

1. (2) No contract the value or amount whereof exceeds Rs. 3000 but does not exceed Rs. 25000 shall be entered into on behalf of a Committee unless it has been sanctioned by the Committee.
2. (3) No contract the value or amount whereof exceeds Rs. 25000 but does not exceed Rs. 50000 shall be entered into by or on behalf of a Committee unless it has been sanctioned by the Director Local Bodies.
3. (4) No contract the value or amount whereof exceeds Rs. 50000 shall be entered into by or on behalf of the Committee unless it has been sanctioned by the Government : Provided that when the estimated cost of a work exceeds ten thousand rupees, it shall not be entered into unless the estimates pertaining to that work have been checked by an Engineer specially empowered by the Government in this behalf :

Execution of contracts.-(1) Every contract made by or on behalf of a Committee, the value or amount whereof exceeds twenty rupees shall be in writing and every such contract shall be signed by the Chairman, (and in his absence by the Vice-Chairman and in the absence of both by the Secretary).

1. (2) Every transfer of immovable property belonging to a Committee must be made by an instrument in writing executed by the Chairman or Vice-Chairman and by at least two other members of the Committee whose execution thereof shall be attested by the Secretary and no such transfer of immovable property be made without the previous sanction of the Government.
2. (3) No contract or transfer of the nature mentioned in this section executed otherwise than in conformity with the provisions of this section shall be binding on the Committee or the Government.