MMCNPIT Act 90CChapter VII · Municipal Property, Funds, Contracts And Liabilities

Section 90C · Powers of Council to borrow money

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(1)

Council may from time to time, borrow or re-borrow and take up at interest from the State Government or from any financial institution with the previous sanction of the State Government, by the issue of debentures or otherwise on the security of any immovable property vested in the Council or proposed to be acquired by it under this Act or of all the taxes or of any tax which it is authorised to levy for the purposes of this Act or of all or any of those securities, any sum, necessary for the purpose of,-

(a)

defraying any costs, charges or expenses, incurred or to be incurred by it, in the execution of this Act,

(b)

discharging any loan contracted under this Act or any other loan or debt for the repayment of which the Council is liable,

(c)

making good any deficit in budget estimate,

(d)

generally, carrying out the purposes of this Act, including the advance of loans authorized thereunder:
Provided that,-

(i)

no loan shall be raised for the execution of any work other than a permanent work, which expression shall include any work of which the cost should, in the opinion of the State Government, be spread over a term of years;

(ii)

no loan shall be raised unless the State Government has approved the terms on and the method by which the loan is to be raised and repaid;

(iii)

the period within which the loan is to be repaid shall in no case exceed sixty years and, where a loan is raised for the repayment of a previous loan, the period within which the subsequent loan is to be repaid shall not extend beyond the unexpired portion of the period fixed for the repayment of the original loan unless the State Government so ditects, and shall in no case extend beyond the period of sixty years from the date on which the original loan was raised.

(2)

When any sum of money has been borrowed or re-borrowed under sub­section (1),-

(a)

no portion thereof shall, without the previous sanction of the State Government be applied to any purpose other than that for which it borrowed; and,

(b)

no portion of any sum of money borrowed or re-borrowed for the execution of any work shall be applied to the payment of salaries or allowances of any municipal officer or servant other than those who are exclusively employed upon the work for the construction of which the money was borrowed:
Provided that, such share of the cost on account of the salaries and allowances of municipal officers and servants employed in part upon the preparation of plans and estimates or the construction or supervision of or upon the maintenance of the account of such work as the Council may fix may be paid out of the sum so borrowed or re-borrowed.

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