Chapter V FINANCE, ACCOUNTS AND AUDIT

Board‘s fund

1. (1) . The Board shall have its own fund and all receipts of the Board shall be credited thereto and all payments by the Board shall be made there from.
2. (2) . All moneys belonging to that fund may be deposited or invested i. In any scheduled bank within the meaning of the Reserve Bank of India Act, 1934 (Central Act II of 1934); or ii. in any corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970); or iii. in the State Bank of India as defined in the State Bank of India Act, 1955 (Central Act 23 of 1955) or its subsidiary banks as defined in the State Bank of India (Subsidiary Banks Act, 1959 (Central Act XXXVIII of 1959); or iv. in such securities as may be approved by the Government.
3. (3) . The Government may, from time to time, make grants, subventions, or advance or loans to the Board for the purposes of this Act on such terms and conditions as the Government may determine.
4. (4) . The Board may accept grants, subventions, donations and gifts from the Central or State Government or a local authority, or any individual or body, whether incorporated or not, for all or any of the purposes of this Act.
5. (5) . The Board may constitute a sinking fund, depreciations reserve fund and other funds in such manner and in such form as may be prescribed.

Power of the Board to borrow and lend Power of the Board to borrow and lend

1. (1) . Subject to the provisions of this Act and the regulations made there under and subject to such conditions as may be specified by the Government by a general or a special order issued in this behalf by them and with their previous approval, the Board may, from time to time, borrow money required for the purposes of this Act by any one or more of the manners specified below a. raising loans from any bank or other financial institutions or the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (Central Act 31 of 1956); or b. raising loans from any corporation, owned or control by the Central or the State Government; or c. raising loans from the public by issue of bonds, or debentures or stocks or otherwise in the form and manner approved by the Government Provided that the loans or amounts borrowed under this subsection shall be utilized only for the specific purpose or purposes for which such loans or borrowings were raised or made.
2. (2) . Subject to the provisions of this Act and to such conditions and limitations as may be specified, the Board may out of its funds grant loans and advances, on such terms and conditions as it may determine to any local authority for any development scheme.
3. (3) . The Government may guarantee in such manner as they think fit, the repayment of the principal and interest of any loan proposed to be raised by the Board under sub-section (1); Provided that the Government shall, so long as any such guarantees are in force, lay before both Houses of the Legislature in every year during the Budget session, a statement of the guarantees, if any, given during the current year and an up-to-date account of the total sums if any, which have been paid out of the Consolidated Fund of the State by reason of any such guarantees or paid into the said Fund towards re-payment of any money so paid out.

Form, signature, exchange, transfer and effect of debentures

1. (1) . Whenever money is borrowed by the Board on debentures, the debentures shall be in such form as the Board may with the previous approval of the Government, specify
2. (2) . All debentures shall be signed by the Managing Director of the Board.
3. (3) . The holder of any debenture in any form specified under sub-section
4. (1) may obtain in exchange there for a debenture in any other form specified in the manner provided in sub-section
5. (1) and upon such terms as the Board may determine.
6. (4) . Every debenture issued by the Board shall be transferable by endorsement, unless some other mode of transfer is specified therein.
7. (5) .

Taxes leviable by the Board Taxes leviable by the Board

1. (1) . For the purposes of this Act, the Board shall levy on premises situated within its area a. a water tax; and b. a sewerage tax
2. (2) . The taxes mentioned in sub-section
3. (1) shall be levied at such rates as may be prescribed which in the case of water tax shall not be more than twenty per cent and in the case of sewerage tax shall not be more than ten per cent of the assessed annual value of the premises.
4. (3) . The Board may, with the sanction of Government, exempt any local area from the whole or portion of the water tax and sewerage tax on the ground that such area is not deriving any or the full benefit from the water supply or sewerage system, or the Board may remit a portion of such taxes not exceeding one half on the ground that the premises concerned has remained vacant. Explanation-For the purposes of this chapter the expression "premises‘ shall mean any land or building.
5. (4) . Where water tax or drainage tax is comprised in the property tax or house tax levied and collected by the existing authority such existing authority shall reduce the property tax or house tax by an amount equal to the amount attributable to water tax and drainage tax.

Assessment of Annual value 1. For the purposes of section 34 the annual value of the premises shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year less a deduction in the case of buildings of a ten percent of that portion of such annual rent which is attributable to the buildings alone apart from their sites and the adjacent lands occupied as an appurtenance thereto, and the said deduction shall be in lieu of all allowances for repairs or on any other account whatsoever: Provided that a. in the case of

1. (i) any Government building, or
2. (ii) any building of a class not ordinarily let the gross annual rent of which cannot in the opinion of the Board be estimated, the annual value of the premises shall be deemed to be six percent of the total of the estimated value of the premises after deducting for depreciation a reasonable amount which shall in no case be less than ten percent of the total of the estimated value of the premises. b. machinery and furniture shall be excluded from the valuation under this section.

1. (2) . The annual value of the premises for the purposes of levy of taxes mentioned in section 34 shall be assessed by such authority as may be prescribed. The Government shall have power to make rules regarding the manner in which, the person or persons, by whom and the intervals at which the total of the estimated value of the premises and the amount to be deducted for depreciation shall be estimated or revised in any case or class of cases to which clause
   • (a) of the proviso to sub-section
2. (1) applies.
3. (3) . Till such time as the annual valuation of land and buildings is determined under this Act, the annual value of land and buildings for the purposes of this Act, shall be the annual value as assessed by a Municipal Corporation, Municipality, Panchayat or other like authority.
4. (4) . Where water tax or drainage tax is comprised in the property tax or house tax levied and collected by the existing authority such existing authority shall reduce the property tax or house tax by an amount equal to the amount attributable to water tax and drainage tax.

Restriction on the Levy of taxes.- The taxes mentioned in section 34 shall not be levied on any land exclusively used for agricultural purposes unless water is supplied by the Board for such purposes to that land.

Budgets

1. (1) . The Finance Director shall, in each year, prepare a revenue budget for the next ensuing year and the succeeding two years showing the estimated income and expenditure and place it before the Board for adoption.
2. (2) . Every such budget shall, as far as practicable make provision for the due fulfilment of all the liabilities of the Board, and for the proper implementation of this Act.
3. (3) . Every such budget shall differentiate between capital and revenue, and capital funds shall not be used for revenue purposes.
4. (4) . Whenever the Board adopts a development plan under the provisions of this Act, the Finance Director shall prepare and place before the Board a capital budget covering a period of five years from the commencement of the plan and such budget may be reviewed and revised by the Board from time to time.
5. (5) . The Finance Director shall also prepare and place before the Board annually, a cash budget for the succeeding three financial years.
6. (6) . Save as otherwise provided in this section all budgets shall be in such form, shall contain such information and shall be prepared by such dates as may be prescribed.
7. (7) . The Board shall consider every budget so laid before it and shall sanction the same, either without modification or with such modification as it may deem fit.
8. (8) . Every such budget, as sanctioned by the Board, shall be submitted to the Government who may at any time within one month after receipt of the same,
   • (a) . approve the budget or
   • (b) . disallow the budget or any portion thereof, and return the budget to the Board for amendment, and if any budget is so returned to the Board, it shall forthwith proceed to amend it and shall resubmit the budget as amended to the Government who may then approve it.
9. (9) .

Balance sheet and Income and Expenditure Account Balance sheet and Income and Expenditure Account.

1. (1) . The Balance sheet, income and expenditure account and statement of sources and application of funds of the Board shall be prepared in such form and in such manner as may be prescribed.
2. (2) .

Audit Audit.

1. (1) . The accounts of the Board shall be audited by an auditor duly qualified to act as an auditor under sub section
2. (1) of section 226 of the Companies Act, 1956 (Central Act 1 of 1956) who shall be appointed by the Board with the approval of the Government and who shall receive such remuneration as the Board may fix.
3. (2) . The auditor shall be supplied with a copy of the annual accounts of the board and it shall be his duty to examine it together with the books and vouchers relating there to and he shall have a list delivered to him of all books kept by the board and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the Board.
4. (3) . The auditor may, in relation to such accounts, examine any past or present director, officer or other employee of the Board and shall be entitled to require from the Board or such Director, officer or other employees such information and explanation as he may think necessary for the performance of his duties.
5. (4) . The auditor shall make a report to the Board upon the annual accounts examined by him and in every such report he shall state whether in his opinion the accounts exhibit a true and fair view of the state of affairs of the Board and in case he had called for any information or explanation from or the Board or any past or present director, officer or other employee of the Board whether it has been given and whether it is satisfactory.
6. (5) . Without prejudice to anything contained in the preceeding sub-sections, the Government may at any time appoint an auditor to examine and report upon the accounts of the Board and, any expenditure incurred by such auditor in connection with such examination and report, shall be payable by the Board.

Previous sanction of Government for certain schemes, plans and works

1. (1) . Except with the previous sanction of the Government, the Board shall not adopt or execute any scheme or plan in respect of water works or sewerage works or carry out any works in connection therewith, if the cost of such schemes, plans or other works exceeds or is likely to exceed.
   • (a) . One crore of rupees in the case of replacements, reconstruction, structural alterations, adaptations, conversions, improved fixtures, fittings and machinery and other works of improvement not involving extensions, enlargements or additions to existing works or works previously in use; and
   • (b) . seventy-five lakhs of rupees in the case of new works including extensions, enlargements and additions to existing works or works previously in use.
2. (2) . Notwithstanding anything contained in sub-section
3. (1) the Board shall not except with the previous sanction of the Government adopt or execute any scheme or plan in respect of water works or sewerage works or carry out any work in connection therewith if the cost of such scheme, plan or other work is met or to be met with from the funds provided by the Government.
4. (3) . Notwithstanding anything contained in sub-sections
5. (1) and
6. (2) the Board may, without the previous sanction of the Government.
   • (a) . adopt or execute each of the component in any World Bank assisted Projects, or other externally aided projects, for which the Government accorded previous sanction for the total project cost.
   • (b) . adopt or execute any maintenance work in any scheme or plan in respect of water works or sewerage works irrespective of the cost of such maintenance work.
   • (c) . adopt or execute any scheme or plan with the assistance of any financial institution such as Housing and Urban Development Corporation, where the fund is not routed through the Government.
   • (d) . sanction not exceeding two and half times of the Budget Estimate after deducting the value of the spill over in respect of Government assisted plan programmes under the Chennai Transmission and Distribution System. Sub-Section-(3) of Section 40 shall come into force with effect from `1.2.99 (G.O.Ms.No.30 of MAWS Department dated 29.1.1999).

Power to write off irrecoverable amount. - The Board may write off any amount or sum whatsoever due or payable to it, if in its opinion, such amount or sum is irrecoverable. Provided that the Board shall, before writing off such an amount exceeding twenty-five thousand rupees, obtain the sanction of the Government.