LexThe Kerala Local Authoritie Loans Act
Kerala · state statute
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ot THE KERALA LOCAL AUTHORITIES LOANS ACT, 1963
ay (Act 30 of 1963)
ContTENTS
Preamble.
Sections
1. Short title, extent and commencement.
2. Definitions,
3. Borrowing powers of local authorities.
4. Remedy by attachment if loan not repaid.
5. Power of local authority to guarantee payment of interest on,
or to create a fund for repayment of capital expended on
any work to which the funds may be applied.
6. Remedy by attachment if engagements not fulfilled.
7. Issue of short term bills, .
8. Power of Government to make rules.
9. Loans not to be effected except under this Act.
10. Repeal.
ACT 30 OF 1963 *
{ THE KERALA LOCAL AUTHORITIES LOANS ACT, 1963
An Act to unify and amend the laws relating to the borrowing powers of local
authorities m the State of Kerala.
Preamble. —WHEREAS it is expedient to unify and amend the laws
relating to the borrowing powers of local authorities in the State of
Kerala ;
Be it enacted in the Fourteenth Year of the Republic of India as
follows: —
1. Short title, extent and commencement.—(1) This Act may be
called the Kerala Local Authorities Loans Act, 1963.
(2) It extends to the whole of the State of Kerala.
(3) It shall come into force on such date as the Government
may, by notification in the Gazette, appoint.2
2. Definitions.—In this Act, unless the context nrherwise . wane fea pewnee:
a (i) “local authouty” mcans any person Icgally entitled to the
‘€ontiol” or management of any local fund 01 legally entitled to impose he -
Yicess, rate, duty, {ec or tax andincludes the Panchayat or the or
open of the Municipality, as the case may be, and also includes -
athe’ Sepictary of such local authouty if he has been spccifically id
‘suthoiised by the local authority for discharging the dutics and 3.
unctions under this Act.
are SY Explanation.—A peison means and includes any authority or body
gorporate.j; _
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177
legally entitled teimpose-any-cess, rate, duty or_tax_within any local
area;7Jd ~
. (2) ‘funds ” used with reference to any local authority in-
cludes any local, panchayat or municipal fund to the control or
management of which such authority is legally entitled, and any cess,
rate, duty or tax which such authority is legally entitled to impose and
re any property vested in such authority ;
(3) ‘* prescribed ” means prescribed by rules made under this
Act; and
(4) ** work”? includes a survey whether incidental to any other
work or not.
3. Borrowing powers of local authortttes.—(1) A local authonity
may, subject to the prescribed conditions, borrow money from the
Government or with the previous sanction of the Government from any
other person, on the security of its funds or any portion thereof, for any
of the following purposes, namely :—
(2) the carrying oyt of any work which it is legally
authorised to carry out,
(w) the giving of i:elief and the establishment and main-
tenance of relief works in times of famine, scarcity,}
epidemic or flood; !
(2) the prevention of the outbreak or spread of any —-——-——
Sh dangerous epidemic disease;
, (tv) any measures which may be connected with or ancillary
to any purposes specified in clauses (11) and (iii);
(v) the repayment of money previously borrowed in
accordance with law:
o
Provided that no portion of the money so borrowed shall
be applied to any purpose othe: than that for which it was borrowed.
(vt) any other purpose which the Government may specify.
(2) (2) The time for the repayment of any money borrowed
under this section shall in no case exceed sixty years.
(6) The time for the repayment of any money borrowed
before the commencement of this Act shall not, except
with the express sanction of the Government, extend
beyond the period of sixty years. St -~
(c) The time for the repayment of any money borrowed for >
the purpose of discharging any previous loan shall’ not,
except with the express sanction of the Government,
extend beyond the unexpired portion of the period . a"
+: . for which such previous loan was raised.SHe ' 2 Co 1
Nothing in this section: shall bédeemed to authorise any: Nes
avthoritv.to. borrow_or spend money for\any purpose ‘for~ which, Pad ‘Ss a The borrowing tome - wo. Zo to~ pa
ocr . . Government intelotns i era loca] authority shall be © the annual income of that local’
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ction shall affect the issuance of by pledging the revenue stream *, Ww accounts and credit cnhangg, - ’
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4, Remedy by attachment ifloan not repaid.—If any money borrowed
in accordance with the provisions of this Act, or any interest or. costs
due in respect thereof, 1s or are not repaid according to the conditions
of the loan, the Government if itself the lender, may, and _if the Govern-
ment is not the lender shalf on the application of the lender attach the
funds on the security of which the loan was made. After such attach-
ment, no person, except an officer appointed in this behalf by the
Government, shall in any way deal with the attached funds, but such
officer may do all acts im respect thereof which the borrowers might
have done if such attachment had not taken place and may apply the
proceeds in satisfaction of the loan and of all interests and costs 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 funds attached were previously pledged in accor-
dance with law; but alt such pnior charges shall be paid out of the
proceeds of the funds before any part of the proceeds 1s applied to the
satisfaction of the liability in respect of which such attachment is
made.
5. Power of local authority to guarantee payment of interest on, or to
create a fund for repayment of capital expended on any work to which the funds
“may be applied.—The Government may authorise any local authority
either severally or in conjunction with any other local authority, to
charge its funds or any part thereof by way of guarantee for the pay-
ment of interest on, or by the creation of a fund for the repayment of,
money expended or to be expended on any work or for any of the pur-
poses to which such funds might be by Jaw applied.
6. Remedy by attachment if engagements not fulfrlled.—In the event
of default being made by a local authority in the fulfilment of engage-
ments entered into under the last preceding section, the Government
may on the application ofa person entitled under such engagements,
attach the funds made subject to charge on account thereof. After
such attachment, no person, except an officer appointed in this behalf
by the Government shall in any way deal with the attached funds ; but
such officer may do all acts in respect thereof which the loca] authority
might have done if such attachment had not taken place, and may
apply the proceeds to the discharge of the liabilities incurred and in
payment of all costs due in respect thereof, and of all expenses caused
by the attachment and subsequent proceedings consequent thereon :
Provided that no such attachment shall defeat or prejudice any
debt for which the funds attached were previously pledged in accor-
dante with law; but all such prior charges shall be paid out of the
proceeds of the funds before any part of the proceeds is applied to the
satisfaction of a liability in respect of which such attachment is mace
7. Issue of short term bills.—(1} Subject to the p f
section 31 of the Reserve Bank of India Act, 1934, any local a y
to which the Government may by notification in the Gazett d
. the provisions of this section, may, with the previous sanction of the
“Goernment, borrow money by means of the issue of bills or promissory
noteinayable within any pertod, not exceeding twelve months, for any
179
purpose for which such local authority may lawfully borrow money
under the provisions of this Act.
(2) The Government may, by general or special order, regu-
late the conditions on which money may be borrowed or repaid under
this section, —
8. Power of Government to make rules.—(1) The Government may,
ZL by notification in the Gazette make rules to carry out the purposes of
= this Act.
(2) In particular and without prejudice to the generality of
the foregoing power such rules may provide as to:—
(7) the nature of the funds on the security of which money
may be borrowed or interest guaranteed;
(22) the works for which money may be borrowed or for the
carrying out of which the payment of interest may be
guaranteed;
(#22) the manner of making applications for permssion to
borrow money;
(wv) the manner of making application for sanction to give
guarantee under section 5;
(v) the inquiries to be made in relation to such application
and the manner of conducting such inquirtes,
(ut) the inquiries to be made in relation to loans and the
4 manner of conducting such inquiries,
(vit) the inspection of any works carried out under any
contract in respect of which the payment of interest is
guaranteed under this Act ;
(vtit) the accounts to be kept by the person or corporate
body with whom such contract 1s made and for the
inspection of the same ;
(ix) the cases and the forms in which particulars of app).-
cations and proceedings, and orders thereon, shall be
published ,
(x) the cases in which and the conditions subject to which
the Government may make loans ;
(x?) the cases in which and the conditions subject to which
local authorities may take loans from persons other than
the Government ;
(xiz) the manner of recording and enforcing the conditions
on which money 1s to be borrowed ;
(xuz) the manner and the time of making or raising loans ,
(xw) the inspection of any works carried out by means of
loans;
+ (xv) the instalments, if any, by which loans shall b
the interest to be charged on loans and the m
the time of repaying loans and of paying
thereon ;
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180
(xt) the sum to be charged against the funds which are to
form the security for the loan, as costs in effecting the
loan ; °
(xviz) the attachment of such funds arid the manner of dis-
posing of or collecting them.
(xviii) the accounts to be kept in respect of loans ;
(aia) the utilisation of unexpended balances of loans either
in the reduction in any way of the debt of the local
authority, or in carrying out auy works which that
authority is legally authorised to carry out, and the
sanction necessary to such utilisation.
(3) Every rule made under this Act shall be laid, as soon as
may be after it is made before the Legislative Assembly while it is in
session fora total penod of fourteen days which may be comprised
1n one session or in two successive sessions, and if before the expiry of
the session in which it 15 so laid, or the session immediately following,
the Legislative Assembly makes any modification 1n the rule or decides
that the rule should not be made, the rule shall thereafter have effect
only in such modified furm or be of no effect, as the case may be; so
however that any such modification or annulment shall be without
prejudice to the validity of anythimg pr. viously done under that rule.
9. Loans not to be effected except under this Act.—LExcept as provided
by or under this Act, no local authority shall, for any purpose, borrow
money upon or otherwise charge, its funds, and any contract other wise
made for that purpose after the passing of this Act shall be void:
Provided that nothing heiein contained shall be deemed—
(a) to preclude any local authority from exercising the borrow-
ing powers conferred on it by any special enactment now or hereafter
in force ; or
(6) to affect the power conferred on any local authority by
any such enactment to charge its funds, by guaranteeing the payment
of interest on money to be applied to any purpose to which the funds of
the local authority can legally be applied.
10. Repeal.—The Local Authorities Loans Act, 1914 (Central
Act 9 of 1914), and the Madras Local Authorities Loans Act, 1888
(Madras Act | of 1888) as in force in the Malabar district referred to
in sub-section (2) of section 5 of the States Reorganisation Act, 1956
(Central Act 37 of 1956) and the Travancore-Cochin Local Authorities
Loans Act, 1951 (Act LX of 1951), are hereby repealed.