Chapter IX BORROWING

(1) The Council may, in pursuance of any resolution passed by it, borrow by way of debenture or otherwise on the security of all or any of the taxes, rates, cesses, fees and charges authorised by or under this Act, any sums of money which may be required— (a) for acquiring any land which it has power to acquire; (b) for erecting any building which it has power to erect; (c) for the execution of any permanent work, the provision of any plant, or the doing of any other thing which it has power to execute, provide or do, if the cost of carrying out the purpose in question ought to be spread over a term of years; (d) to pay off any debt due to the Central Government or the Government; (e) to repay a loan previously raised under this Act or any other Act previously in force; or (f) for any other purpose for which the Council is, by virtue of this Act or any other law for the time being in force, authorised to borrow: Provided that— (i) no loan shall be raised without the previous sanction of the Central Government or without previous publication of the application for sanction under the Local Authorities Loans Act, 1914 (9 of 1914), and the rules made thereunder; and (ii) the amount of loan, the rate of interest and the terms including the date of floatation, the time and method of the repayment and the like shall be subject to the approval of the Central Government. (2) When any sum of money has been borrowed under sub-section (1), no portion of any sum of money borrowed for any of the purposes referred to in clause (c) of sub-section (1) shall be applied to the payment of salaries and allowances to any officers or other employees other than those exclusively employed in connection with the carrying out of that purpose.

The time for the repayment of any money borrowed under section 126 shall in no case exceed sixty years and the time for repayment of any money borrowed for the purpose of discharging any previous loan shall not, except with the express sanction of Central Government, extend beyond the unexpired portion of the period for which such previous loan was sanctioned.

All debentures issued under this Chapter shall be in such form as the Council may, with the previous sanction of the Central Government, determine and shall be transferable in such manner as shall be therein expressed; and the right to sue in respect of the moneys secured by any of such debentures shall vest in the holders thereof for the time being without any preference by reason of some such debentures being prior in date to others.

When any debenture or security issued under this Act is payable to two or more persons jointly, and either or any of them dies, then, notwithstanding anything in section 45 of the Indian Contract Act, 1872 (9 of 1872), the debenture or security shall be payable to the survivor or survivors of such person: Provided that nothing in this section shall affect any claim by legal representative of a deceased person against such survivor or survivors.

When two or more persons are joint holders of any debenture or security issued under this Act, any one of such persons may give an effectual receipt for any interest or dividend payable in respect of such debenture or security, unless notice to the contrary has been given to the Council by the other of such persons.

(1) The Council shall maintain sinking funds for the repayment of money borrowed on debentures issued and shall pay every year into such sinking funds such sum as will be sufficient for the repayment within the period fixed for the loan of all moneys borrowed on the debentures issued. (2) All money paid into the sinking funds shall, as soon as possible, be invested by the Chairperson in public securities and every such investment shall be reported by the Chairperson to the Council within fifteen days. (3) All dividends and other sums received in respect of any such investment shall, as soon as possible after receipt, be paid into the sinking funds and invested in the manner laid down in sub-section (2). (4) When any part of a sinking fund is invested in New Delhi municipal debentures, or is applied in paying off any part of a loan before the period fixed for repayment, the interest which would otherwise have been payable on such debentures or on such part of the loan shall be paid into the sinking fund and invested in the manner laid down in sub-section (2). (5) Any investment made under this section may, subject to the provision of sub-section (2), be varied or transposed.

A sinking fund or any part thereof shall be applied in or towards the discharge of the loan or a part of the loan for which such fund was created, and until such loan or part is wholly discharged shall not be applied for any other purpose: Provided that when any loan or part thereof has been consolidated under section 134, the Chairperson shall transfer to the sinking fund of the consolidated loan such part of the sinking funds of the original loans as may be proportionate to the amount of the original loans incorporated in the consolidated loan.

(1) The Chairperson shall, at the end of every year, submit to the Council a statement showing— (a) the amount which has been invested during the year under section 131; (b) the date of the last investment made previous to the submission of the statement; (c) the aggregate amount of the securities then in his hand; and (d) the aggregate amount which has up to the date of the statement been applied under section 132, in or towards discharging loans. (2) Every such statement shall be published in the Official Gazette.

(1) Notwithstanding anything to the contrary contained in this Chapter, the Council may consolidate all or any of its loans and for that purpose may invite tenders for a new loan (to be called “the New Delhi Municipal Council Consolidated Loan, 19—”) and invite holders of the municipal debentures to exchange their debentures for scrips of such loan. (2) The terms of any such consolidated loan and the form of its scrip and the rates at which exchange into such consolidated loan shall be permitted shall be subject to the prior approval of the Central Government. (3) The period for the exchanging of any such consolidated loan shall not, without the sanction of the Central Government, extend beyond the farthest date within which any of the loans to be consolidated would otherwise be repayable. (4) The Council shall provide for the repayment of any such consolidated loan by a sinking fund in the manner laid down in section 131 having regard to the amount transferred to such sinking fund under section 132.

(1) All payments due from the Council for interest on and repayment of loans shall be made in priority to all other payments due from the Council. (2) If any money borrowed or deemed to have been borrowed by the Council from Central Government or the Government or any interest or costs due in respect thereof be not repaid according to the conditions of the loan, the Central Government or the Government may attach the New Delhi Municipal Fund or any part thereof. (3) After such attachment no person except an officer appointed in this behalf by the Central Government shall in any way deal with the attached fund; but such officer may do all acts in respect thereof which any municipal authority, officer or other employee might have done if such attachment has not taken place, and may apply the proceeds in satisfaction of the arrears and of all interests and cost due in respect thereof and of all expenses caused by the attachment and subsequent proceedings: Provided that no such attachment shall defeat or prejudice any debt for which the fund was previously charged in accordance with law; and all such prior charges shall be paid out of the proceeds of the fund before any part of the proceeds is applied to satisfaction of the debt due to the Central Government or the Government.

The Council may make regulations to carry out the purposes of this Chapter including, in particular, the issue of duplicates in case of loss of debentures by theft, destruction or otherwise, and renewal of debentures on payment of fees prescribed in this behalf by such regulations.