Chapter VII BORROWING POWERS OF BOARD

1. (1) The Board may raise loans, with the previous sanction of the Government on such terms and conditions as may be prescribed by rules by Government for the purposes of this Act.
2. (2) Loans may be raised by the Board in the open market on the Board Securities issued by it or may be obtained from the Government or a Bank approved by the Government.

1. (1) The Board, may with the sanction of the Government, prescribed by regulations 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. (2) The holder of any Board Security in any form may obtain it exchange therefor upon such terms as the Board may, from time to time, determine, a Board Security in other form prescribed by regulations.
3. (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. (1) Notwithstanding anything contained in section 45 of the Contract Act, 1872 (9 of 1872),-
   • (a) when any Board Security is payable to two or more persons jointly and either or any of them dies, such 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. (2) Nothing herein contained shall affect 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.
3. (3) For the purposes of this section, a body incorporated or deemed to be incorporated under the Companies Act, 1956 (I of 1956), or any other enactment for the time being in force, whether within or outside 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 effectual receipt for any interest payable in respect of such security unless notice to the contrary has been given to the Board by any other holders.

Notwithstanding anything contained in section 15 of the Negotiable Instruments Act, 1881 (26 of 1881), no endorsement of a Board Security which is transferable by endorsement shall be valid unless made under the signature of the holder inscribed on the back of the security itself.

Notwithstanding anything contained in the Negotiable Instruments Act, 1881 (26 of 1881), a person shall not be, by reason only of his having endorsed any Board security, liable to pay any money due either as principal or as interest thereunder.

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

1. (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, he 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 issue of a duplicate security payable to the applicant and
   • (b) the payment of interest in respect of the security said to be lost, stolen, or destroyed pending the issue of a duplicate security.
2. (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. (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 prescribed by regulations.
4. (4) 1f at any time before the Board becomes 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. (1) The Board may, subject to such conditions as it may prescribe by regulation on the application of a person claiming to be entitled to 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 by regulation, convert, consolidate or sub-divide the security or securities, and issue to the applicant a new security or securities, accordingly.
2. (2) The conversion, consolidation or sub-division referred to in sub-section (1) may be into a security or securities of the same or different classes or of the same or different loans.

Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963),-

1. (i) on payment of the amount due on a Board Security on or after the date on which payment becomes due, or
2. (ii) when a duplicate security has been issued under section 61, or
3. (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 securities,-

1. (a) in the case of payment, after the lapse of six years from the date on which payment was due;
2. (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, whichever is later;
3. (c) in the case of a new security issued upon conversion, consolidation or sub-division after the lapse 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,-

1. (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. (1) as sinking fund for the purpose of paying off any loan; or
2. (2) for the payment of pension to its employees; or
   • (ii) the provident 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 Government shall not be deemed to possess any prior or greater tight 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 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 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 or the outstanding principal.

1. (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 date of the loan, the 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 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. (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 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. (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) that section shall be invested in public securities or in such other securities as the Government may approve in this behalf and shall be held by the Board in trust for the purposes of this Act.
2. (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. (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 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. (2) The Board shall pay forthwith into the sinking fund any amount which the person appointed under sub-section (1) to conduct the annual examination of the fund may certify to be deficient unless the Government specifically sanctions a gradual readjustment.
3. (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 credit, the person appointed under sub-section (1) shall certify the amount of the excess and the Board may, with the previous sanction of the 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 to Board to raise loans under the Local Authorities Loans Act, 1914 (9 of 1914).

Notwithstanding anything contained in this Act, the Board may,-

1. (1) borrow moneys by means of temporary overdraft or otherwise by placing the securities held by the Board in its reserve funds or on security of the fixed deposits of the Board in its banks;
2. (2) obtain advances from such banks on pledge or hypothecation of its current assets without the previous sanction of the 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 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 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 being in force, the Board may, with the previous Sanction of the 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 of 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 Government otherwise provide.