140. Power of municipalities to reserve a portion of debentures, issued for raising loan for investment.
(1)For the purpose of investment of any portion of the Municipal Fund, including Sinking Fund in the debentures issued by the municipality for raising a loan, the municipality may, within the limits set by the comprehensive debt limitation policy framed under section 132, reserve and set apart any portion of such debentures for issue at par thereto in the name of the municipality, provided that the intention so to reserve and set apart such debentures shall have been notified as a condition of raising the loan.(2)The issue of any debentures by the municipality under sub-section (1) shall not operate to extinguish or cancel such debentures, but every such debenture shall be valid in all respects as if it were issued to, and in the name of, any other person.(3)The purchase by, or the transfer, assignment or endorsement to, the municipality of any debenture issued by it shall not operate to extinguish or cancel such debenture and every such debenture shall be valid and negotiable in the same manner and to the same extent as if it were held by, or transferred, assigned or endorsed to, any other person.
