Chapter II DEBENTURES

1. (a) With the previous sanction of the Trustee, the Board may issue debentures of one or more denominations for such periods as it may deem expedient on the security of the mortgages and other assets transferred [or deemed under the provisions of section 23-A to have been transferred] by the [primary land development banks] to the [State Land Development Bank] and of the other properties of such Bank.
2. (b) Such debentures may contain a term fixing a period not exceeding ten years from the date of issue during which they shall be irredeemable, or reserving to the Board the right to call in at any time any of the debentures in advance of the date fixed for redemption after giving to the debenture-holder concerned not less than three months' notice in writing.

1. (2) The total amount due on the debentures issued by the Board (including those issued before the commencement of this Act) and outstanding at any time shall not exceed the aggregate of
   • (a) the amounts due on the mortgages, and the value of the other assets, transferred or deemed under the provisions of section 23-A to have been transferred by the [primary land development banks] to the [State Land Development Bank] and subsisting at such time and
   • (b) the amounts paid under the mortgages aforesaid and remaining in the hands of the Board or of the Trustee at that time

5. The Registrar, or where the [State Government] appoint any other person in this behalf such person, shall be the Trustee for the purpose of securing the fulfilment of the obligations of the [State Land Development Bank] to the holders of debentures issued by the Board. The mortgages and other assets transferred (or deemed under the provisions of section 23-A to have been transferred) by the [primary land development banks] to the [State Land Development Bank] shall vest in the Trustee from the date of such transfer. The holders of the debentures shall have a floating charge on all such mortgages and assets, on the amount paid under such mortgages and remaining in the hands of the Board or of the Trustee and on the other properties of the [State Land Development Bank]. The powers and functions of the Trustee shall be governed by the instrument of trust executed between the Bank and the Trustee as modified from time to time by mutual agreement between the Board and the Trustee

1. (1) The principal of, and interest on, the debentures issued under section 4 to such maximum amount as may be fixed by the State Government and subject to such conditions as they may think fit to impose shall, subject to the provisions of sub-section (3), carry the guarantee of the State Government.
2. (3) The State Government may, after consulting the Board and the Trustee,
   • (a) by notification in the Official Gazette, and
   • (b) by notice for not less than fourteen days in such of the principal newspapers in the State of Tamil Nadu and of other States as the State Government may select in this behalf, discontinue any guarantee given by them or restrict the maximum amount thereof or modify the conditions subject to which it is given, with effect from a specified date, not being earlier than six months from the date of publication of the notification in the Official Gazette. In cases where the maximum amount of the guarantee is to be restricted or the conditions subject to which the guarantee is given are to be modified, the notification and notice aforesaid shall set forth with sufficient clearness the scope and effect of the restriction or modification. Explanation., The withdrawal, restriction or modification of any guarantee under this sub-section, shall not affect in any way the guarantee carried by any debentures issued prior to the date on which such withdrawal, restriction or modification takes effect.

7. The State Government may, in their discretion, guarantee the principal of, and the interest on, any debentures issued before the commencement of this Act by the Board, subject to such conditions as the State Government may think fit to impose.

8. The Board may, subject to the approval of the Trustee, make regulations not inconsistent with the provisions of this Chapter,

1. (i) for fixing the period of debentures and rate of interest payable thereon;
2. (ii) for calling in debentures after giving notice to debenture-holders;
3. (iii) for the issue of new debentures in place of debentures damaged or destroyed;
4. (iv) for converting one class of debentures into another bearing a different rate of interest; and
5. (v) generally for carrying out the provisions of this Chapter.