THE KERALA LOCAL
AUTHORITIES LOANS ACT, 1963
ACT 30 OF 1963
An Act to unify and amend the laws relating to the
borrowing powers of local authorities in 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.
Definitions.--In this Act, unless the context otherwise
requires,-
(1) ["(i)
"local authority" means any person legally entitled to the control or
management of any local fund or legally entitled to impose any cess, rate,
duty, fee or tax and includes the Panchayat or the Council of the Muncipality,
as the case may be, and also includes the Secretary of such local authority if
he has been specifically authorised by the local authority for discharging the
duties and functions under this Act.
Explanation.-A
person means and includes any authority or body corporate."];
(2) "funds"
used with reference to any local authority includes 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 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 authorities.-(1) A local authority 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:-
(i)
the carrying out of any work which it is legally authorised to carry
out;
(ii)
the giving of relief and the establishment and maintenance of relief
works in times of famine, scarcity, epidemic or flood;
(iii)
the prevention of the outbreak or spread of any dangerous epidemic
disease;
(iv)
any measures which may be connected with or ancillary to any purposes
specified in clauses (ii) and (iii);
(v)
the repayment of money previously borrowed in accordance with law;
Provided that no portion of
the money so borowed shall be applied to any purpose other than that for which
it was borrowed.
(vi)
any other purpose which the Government may specify.
(2) (a)
The time for the repayment of any money borrowed under this section shall in no
case exceed sixty years.
(b) 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.
(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 for which such previous loan
was raised.
["(3).
The borrowing powers of a local authority shall be fixed by the Government in
relation to the annual income of that local authority.
Provided
that nothing in this section shall affect the issuance of Revenue Bonds by the
local authority by pledging the revenue stream from the project ringfenced by
escrow accounts and credit enhancements."].
4.
Remedy by attachment of loan not repaid.-If any money borrowed in
accordance with the provisions of this Act, or any interest or costs due in
respect thereof, is or are not repaid according to the conditions of the loan,
the Government if itself the lender, may, and if the Government is not the
lender shall on the application of the lender attach the funds on the security
of which the loan was made. 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 borrowers mights have done if such attachment had not taken place and may
apply the proceeds in satisfaction of the loan and of all interest 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 accordance 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 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 payment 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 purposes to which such funds might be by law
applied.
6.
Remedy by attachment if engagements not fulfilled.-In the event
of default being made by a local authority in the fulfilment of engagements
entered into under the last preceeding section, the Government may on the
application of a 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 local 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 threof, 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
accordnance 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 made.
7. Issue
of short term bills.-(1) Subject to the provisions of section 31 of the
Reverve Bank of India Act, 1934, any local authority to which the Government
may by notification in the Gazette extend the provisions of this sections, may,
with the previous sanction of the Government, borrow money by means of the
issue of bills or promissory notes payable within any period, not exceeding
twelve months, for any 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, regulate the conditions on which
money may be borrowed or repaid under this section.
8. Power
of Government to make rules.-(1) The Government may, 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 pwoer such
rules may provide as to:-
(i)
the nature of the funds on the security of which money may be borrowed
or interest guaranteed;
(ii)
the works for which money may be borrowed or for the carrying out of
which the payment of interest may be guaranteed;
(iii)
the manner of making applications for permission to borrow money;
(iv)
the manner of making applications 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 inquiries;
(vi)
the enquiries to be made in relation to loans and the manner of
conducting such inquiries;
(vii)
the inspection of any works carried out under any contract in respect of
which the payment of interest is guaranteed under this Act;
(viii)
the accounts to be kept by the person or corproate body with whom such
contract is made and for the inspection of the same;
(ix)
the cases and the forms in which particulars of applications and
proceedings, and orders thereon, shall be published;
(x)
the cases in which and the conditions subject to which the Government
may make loans;
(xi)
the cases in which and the conditions subject to which local authorities
may take loans from persons other than the Government.
(xii)
the manner of recording and enforcing the conditions on which money is
to be borrowed;
(xiii)
the manner and the time of making or raising loan;
(xiv)
the inspection of any works carried out by means of loans;
(xv)
the instalments, if any, by which loans shall be repaid, the interest to
be charged on loans and the manner and the time of repaying loans and of paying
the interest thereon.;
(xvi)
the sum to be charged against the funds which are to form the security
for the loan, as costs in effecting the loan;
(xvii)
the attachment of such funds and the manner of disposing of or
collecting them.
(xviii)
the accounts to be kept in respect of loans;
(xix)
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
any works which that authority is legally authorised to carry out, and the
sanction necessary to such utilisation.
(2) 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 for a total period of fourteen days
which may be comprised in one session or in two successive sessions, and if
before the expiry of the session in which it is so laid, or the session
immediately following the Legislative assembly makes any modification in the
rule or decides that the rule should not be made, the rule shall threafter have
effect only in such modified form 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 anything proviously done under that rule,
9.
Loans not to be effected except under this Act.-Except 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 otherwise
made for that purpose after the passing of this Act shall be void:
Provided that
nothing herein contained shall be deemed-
(a) to
preclude any local authority from exercising the borrowing powers conferred on
it by any special enactment now or hereafter in force; or
(b) 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 1 of 1888) as in force in the Malabar
district referred to in sub-section (2) of section 5 of the State
Reorganisation Act, 1956 (Central Act 37 of 1956 and the Travancore-Cochin
Local Authorities Loans Act, 1951 (Act IX of 1951), are hereby repealed.