(1)A Municipal Corporation and a Class 'A' Municipal Council, and when so authorised by the Government by notification, a Class 'B' or a Class 'C' Municipal Council or Nagar Panchayat, may, by passing a resolution in this behalf, raise a loan, by the issue of debentures or otherwise on the security of any immovable property vested in it or proposed to be acquired by it or of all or any of the taxes, rates, cesses, fees and charges levied under this Act, for any sum 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 is required to be spread over a term of years;(d)for payment of debt due to the Government;(e)for repaying any loan previously raised under this Act or any other Act previously in force; or(f)for any other purpose for which the Municipal Corporation or the Municipal Council or the Nagar Panchayat, as the case may be, 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 prior approval of the Government; and(ii)the amount of loan, the rate of interest to be paid for such loan and the terms and conditions, including the date of floatation, the time and method or repayment, shall be subject to the approval of the Government.(2)When any sum of money has been borrowed under sub-section (1), no portion of any sum of money borrowed for the purposes referred to in clause (c) of sub-section (1), shall be applied to the payment of salary and allowances to any officers or other employees of the Municipal Corporation or the Municipal Council or the Nagar Panchayat, as the case may be, other than those exclusively employed in connection with the carrying out of that purpose.(3)The loan raised under sub-section (1), shall not be spent on purchase of vehicles and contingent expenditure unless specially provided for in the concerned scheme or project.
