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State of Madhya Pradesh - Section
Section 15 in The M.P. Municipal Accounts Rules, 1971
15.
The security taken from a contractor should be in one of the following forms subject to the conditions noted against each or partly in one and partly in another of these forms when this is specially permitted by the Council.| Forms | Conditions |
| (1) | (2) |
| (i) Cash | Municipal Council will not pay any interest on any depositheld in the form of cash. |
| (ii) Government promissory notes, Municipal debentures, PortTrust bonds, or stock certificates or investments in the NationalPlan Loan of the Central or a State Government. | The securities should be accepted at 5% below the market priceor at the fare value whichever is less. |
| (iii) Post Office Savings Bank Pass Book. | A pass book for a deposit made under Post Office Savings BankRules may be accepted as security, provided that the depositorhas signed and delivered to the Post Master a letter in theprescribed form as required by those rules. |
| (iv) Post Office Cash Certificates and National SavingsCertificates. | The certificates should be formally transferred to theMunicipal Council which lakes the deposit with the sanction ofthe Head Post Master and should be accepted at their surrendervalue at the time of tender. |
| (v) Deposit receipts of State Bank, Punjab National Bank,Central Bank or any other recognised bank approved by theGovernment for the purpose. | (1) The deposit receipt should bemade out in the name of the pledgee or if it is made out in thename of pledger, the bank should certify on it that the depositcan be withdrawn only on the demand or with sanction of thepledge.(2) The depositor should agree inwriting to undertake any risks involved in the investment.(3) The bank should agree that onreceiving a signed treasury ehallan and a withdrawal order fromthe pledgee in respect of the deposit or any part thereof, itwill at once remit the amount specified into the nearest treasuryalongwilh the ehallan and send the treasury receipt to thepledgee.(4) The responsibility of the pledgee in connection with thedeposit and the interest on it will cease when he issues a finalwithdrawal order to the depositor and sends an intimation to thebank that he has done so. |