Chapter IV CHAPTER IV

1. (1) The Board may for the purposes of its capital expenditure and working capital requirements raise loans in any currency or currencies from any—
   • (a) scheduled bank or financial institution located within India; or
   • (b) financial institution in any country outside India in compliance with the laws for the time being in force: Provided that no loan or loans exceeding a sum equivalent to fifty per cent. of the capital reserves of the Board shall be raised by the Board without the previous sanction of the Central Government.
2. (2) The loans may be raised by Board in the open market within India and in any country outside India on port securities including but not limited to debentures, bonds and stock certificates issued by the Board or may be obtained from the Central Government or a State Government: Provided that no loans shall be raised from and no securities shall be issued to any person resident outside India without complying with the Foreign Exchange Management Act, 1999 (42 of 1999), the circulars and guidelines issued by the Reserve Bank of India, the Foreign Direct Investment Policy issued by the Central Government and any other law for the time being in force.
3. (3) The holder of any port security in any form may obtain in exchange thereof, upon such terms as the Board may from time to time determine, a port security in such form as may be specified by the regulations made by the Board.
4. (4) The right to sue in respect of monies secured by port securities shall be exercisable by the holders thereof subject to the provisions of the Limitation Act, 1963 (36 of 1963).
5. (5) Nothing contained in this Act shall be deemed to affect the power of the Boards of Major Port Authorities to raise loans under the Local Authorities Loans Act, 1914 (9 of 1914).
6. (6) Notwithstanding anything contained in this Act, the Board may borrow monies by means of temporary overdraft or otherwise by pledging the securities held by the Board in its reserve funds or on the security of the fixed deposits of the Board in its banks: Provided that such temporary overdrafts or other loans shall not be taken, without previous sanction of the Central Government, if at any time in any year the amount of such overdrafts or other loans exceeds a sum equivalent to fifty per cent. of the capital reserves of the Board: Provided further that all monies so borrowed by temporary overdrafts or otherwise shall be expended for the purposes of this Act.

Notwithstanding anything contained in section 15 of the Negotiable Instruments Act, 1881 (26 of 1881), no endorsement of a port security, which is transferable by endorsement, shall be valid unless made by the signature of the holder inscribed on the back of the security itself.

Notwithstanding anything contained in the Negotiable Instruments Act, 1881 (26 of 1881), a person shall not by reason only of his having endorsed any port security be liable to pay any monies due, either as principal or as interest thereunder.

1. (1) The person to whom a duplicate or new security has been issued under the regulations made by the Board shall be deemed for the purposes of sub-section (2) to have been recognised by the Board as the holder of the security; and a duplicate security or a new security so issued to any person shall be deemed to constitute a new contract between the Board and such person and all persons deriving title thereafter through him.
2. (2) No recognition by the Board of a person as the holder of a port security shall be called in question by any court so far as such recognition affects the relations of the Board with the person recognised by it as the holder of a port security or with any person claiming an interest in such security; and any such recognition by the Board of any person shall operate to confer on that person a title to the security or securities subject only to a personal liability to the rightful owner of the security for money had and received on his account.

Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963).—

1. (a) on payment of the amount due on a port security on or after the date on which payment becomes due; or
2. (b) when a duplicate security has been issued under the regulations made by the Board under sub-section (1) of section 36; or
3. (c) when a new security has been issued upon conversion, consolidation or sub-division under the regulations made by the Board, the Board shall be discharged from all its liability in respect of the security so paid or in place of which a duplicate or new security has been issued—
   • (i) in the case of payment after the lapse of six years from the date on which payment was due;
   • (ii) in the case of a duplicate security after the lapse of six years from the date of the issue thereof or from the date of the last payment of interest on the original security, whichever date is later;
   • (iii) in case of a new security issued upon conversion, consolidation or sub-division after the lapse of six years from the date of the issue thereof.

If a loan is raised by the Board of any Major Port and a security other than the port security is required to be furnished to secure such loan, the Board of that Major Port may secure such loan against—

1. (a) the port assets other than—
   • (i) any sum set apart by the Board—
2. (A) as the sinking fund for the purpose of paying off any loan; or
3. (B) for the payment of pension to its employees; or
   • (ii) the provident or pension fund established by the Board; and
4. (b) income of the Board from the port assets and services.

The Board may apply any sums, out of monies which may come into its hands under the provisions of this Act and which can be so applied without prejudicing the security of the other holders of port securities, in repaying to the Government any sum which may remain due to it in respect of the principal account of any loan although the time fixed for the repayment of the same may not have arrived.

1. (1) In respect of loans raised by the respective Board of the Major Port Authorities under this Act, which are not repayable before the expiration of one year from the date of such loans, such Boards shall set apart out of their income enough sinking fund or funds to service or liquidate such loans for a period of at least one year.
2. (2) Before the commencement of this Act, if any sinking fund had been established by the Board of Trustees constituted under the Major Port Trusts Act, 1963 (38 of 1963) in respect of a loan raised by it for which loan, the Board is liable under this Act and the sinking fund so established by that Board of Trusts shall be deemed to have been established by the Board under this Act.
3. (3) The sums so set apart by the Board under sub-section (1) and the sums forming part of any sinking fund referred to in sub-section (2) shall be applied in such manner as may be prescribed.
4. (4) The Board may apply the whole or any part of the sums accumulated in any sinking fund in or towards the discharge of the monies borrowed for the repayment of which the fund has been established: Provided that the Board pays into the fund in each year, and accumulates until the whole of the monies borrowed are discharged, a sum equivalent to the interest which would have been produced by the sinking fund, or the part of the sinking fund so applied.

Notwithstanding anything contained in this Act, all loans raised or borrowed and all securities issued or pledged in relation to a Major Port prior to the commencement of this Act shall continue to be governed in accordance with the provisions of the Major Port Trusts Act, 1963 (38 of 1963).

All monies received by or on behalf of the Board under the provisions of this Act shall be credited to such general account or accounts of the Board which the Board may from time to time generally open with any Nationalised Bank or any Scheduled Bank as per the guidelines of the Ministry of Finance, Government of India.

1. (1) The monies credited to the general account or accounts under section 42, shall be applied by the Board in payment of the following charges, namely:—
   • (a) the salaries, fees, allowances, pensions, gratuities, compassionate allowances or other monies due to—
     • (i) the Members of the Board except Members appointed under clauses (d), (e) and (f) of sub-section (1) of section 3;
     • (ii) the serving and retired employees of the Board; and
     • (iii) the surviving relatives, if any, of such employees;
   • (b) the cost and expenses, if any, incurred by the Board in the conduct and administration of any provident or welfare fund or loan or special fund established by the Board;
   • (c) the maintenance, development, security and protection of the Board and the docks, warehouses and other port assets;
   • (d) the cost of repairs and maintenance of the property belonging to or vested in the Board and all charges upon the same and all working expenses;
   • (e) the costs, expenses, sums, payments and contributions to be made or incurred by the Board for the purposes provided under sections 25 and 26; and
   • (f) any other charge or expenditure for which the Board may be legally liable.
2. (2) All monies standing to the credit of the Board which cannot immediately be applied in the manner or for the purposes specified in sub-section (1) may be used for such lawful purposes as the Board may from time to time decide.
3. (3) Notwithstanding anything contained in section 42 and sub-sections (1) and (2), monies received by or on behalf of the Board from non-port related use except those falling under section 70 shall be credited to a designated account and shall be applied by the Board for capital investment or for such purposes as may be prescribed.

1. (1) The Board shall prepare a budget, maintain proper accounts and other relevant records and prepare an annual statement of accounts including the balance-sheet in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
2. (2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India or such other person as may be appointed by him in this behalf and any amount payable to him by the Board in respect of such audit shall be debitable to the general account of the Board.
3. (3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Board under this Act shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General of India generally has in connection with the audit of Government accounts and, in particular shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers, and to inspect any of the offices of the Authority.
4. (4) The accounts of the Board, as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf, together with the audit report thereon shall be forwarded annually to the Central Government by the Board and the Central Government shall cause the same to be laid, as soon as may be after it is received, before each House of Parliament.