Chapter VII Chapter VII

Power of trust to borrow money. A trust under this Act shall be deemed to be a local authority under the Local Authorities Loans Act, 1914, for the purpose of borrowing money under that Act and the making and execution of any scheme under this Act shall be deemed to be a work which such local authority is legally authorised to carry out.

(1) The Municipal Committee shall pay to the trust from the date the Chairman thereof assumes charge of his office so long as the trust is concerned with the improvement of the locality within the limits of the municipality an amount per annum equal to two per cent of the gross annual income of such Committee. (2) In case of dispute as to what is the gross annual income of a committee, the matter shall be referred to the State Government whose decision shall be final.

Custody and investment of trust funds. (1) In places where there is a Government treasury or sub-treasury, or a bank to which the Government treasury business has been made over, all moneys at the credit of the trust shall be kept in such treasury, sub-treasury or bank. Provided that for the purpose of raising loan for its development scheme a trust may keep the moneys at its credit in such other bank as may be approved by the State Government in this behalf. (2) In places where there is no such treasury or sub-treasury or bank, such moneys may be kept with a banker or person acting as a banker, who has given such security for the safe custody and repayment on demand of the sum so kept as the State Government may in each case deem sufficient. (3) Provided that nothing in the following provisions of this section shall be deemed to preclude a trust from, with the previous sanction of the State Government investing any such moneys which are not required for immediate expenditure in any of the securities described in section 20 of the Indian Trust Act, 1882, or placing them in fixed deposit with a bank approved by the State Government.

If any money borrowed under Section 67 or any interest or costs due in respect thereof is or are not repaid according to the conditions of the loan, the State Government shall itself make such payment and may attach the rents and other income of the trust; and thereupon the provisions of section 5 of the Local Authorities Loans Act, 1914, shall, with all necessary modifications be deemed to apply.

Procedure if chairman of boards fails to make any payment due to Accountant-General. The State Government may further impose or increase a tax on the annual value of buildings or lands or of both described in section 61(1)(a) of the Municipal Act, to such extent as may be necessary for the purpose of recovering a payment made under section 70.

All moneys paid by the State Government shall constitute a charge upon the property of the trust.