Loans how secured

(1) Every loan granted under this Act shall be secured by a mortgage upon the whole or such portion of the assets of the business or enterprise as the sanctioning authority may consider sufficient and where the whole of the assets of the business or enterprise is in the opinion of the sanctioning authority insufficient, by such collateral security as may be required by the sanctioning authority and shall bear interest payable on such dates and at such rates as the State Government may determine. (b) A mortgage executed under clause (a) after the commencement of the Tamil Nadu State Aid to Industries (Second Amendment) Act, 1961, shall have priority over all other claims against the assets secured by such mortgage. (1-A) Notwithstanding anything contained in sub-section (1), but subject to such conditions, restrictions and limitations as may be prescribed, loans may be granted under this Act on the personal security of the applicant, and every such loan shall bear interest payable on such dates and at such rates as the State Government may determine. (2) Notwithstanding anything contained in sub-section (1) or sub-section (1-A), the State Government may direct that any loan granted under this Act to any industrial business or enterprise shall not bear any interest.