Payment not to be made unless covered by a budget-grant.

No payment of any sum out of the municipal fund shall be made unless the expenditure of the same is covered by a current budget-grant and a sufficient balance of such budgetgrant is still available notwithstanding any reduction or transfer thereof which may have been made under the provisions of this Act:

Provided that this section shall not apply to payment made in the following classes of cases, namely: -

1. (a) refund of taxes and other moneys which are authorised under this Act;
2. (b) repayment of moneys belonging to contractors or other persons and held in deposit and of moneys collected or credited to the municipal fund by mistake;
3. (c) sums payable in any of the following circumstances --
   • (i) under orders of the Government on failure of the municipal council to take any action as required by that Government; or
   • (ii) under any other enactment for the time being in force; or
   • (iii) under the decree or order of a civil or criminal court passed against municipal council; or
   • (iv) under a compromise of any claim, suit or other legal proceedings; or
   • (v) on account of cost incurred in taking immediate action by the municipal council or any of the municipal authorities to avert a sudden threat of danger to the property of the municipal council or to human life;
4. (d) temporary payments for works urgently required by the Government in the public interest;
5. (e) sums payable as compensation under this Act or under any rules, regulations or bye-laws made thereunder;
6. (f) expenses incurred by the municipal council on special measures taken on the outbreak of dangerous diseases. The section came into force on the 26th day of January, 1974 vide Extraordinary Gazette No. 11, dated 17th January, 1974.
   • • 196. Procedure when money not covered by a budget-grant is expended. --Whenever any sum is expended under clause (c), clause (e) or clause (f) of the proviso to section 195 the Commissioner shall forthwith communicate the circumstances to the municipal council which may take such action under the provisions of this Act as shall in the circumstances appear possible and expedient for covering the amount of the additional expenditure.
   • • 197. Application of money received and expenditure from fund – All moneys received by the municipal council shall be applied and disposed of in accordance with the provisions of this Act and other laws: Provided that the municipal council shall have power subject to such rules as may be prescribed to direct that the proceeds of any tax or additional tax levied under this Act shall be earmarked for the purpose of financing any specific public improvement. A separate account shall be kept of the receipt from every such tax or additional tax and the expenditure thereof.