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Union of India - Section

Section 3 in The Local Authorities Loans Act, 1914

3. Borrowing powers of local authorities.

(1)A local authority may, subject to the prescribed conditions, borrow on the security of its funds or any portion thereof for any of the following purposes, namely:-
(i)the carrying out of any works which it is legally authorized to carry out.
(ii)the giving of relief and the establishment and maintenance of relief works in times of famine or scarcity,
(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 nothing in clause (v) shall be deemed to empower a local authority to fix a period for the repayment of any money borrowed thereunder which, when the period fixed for the repayment of the money previously borrowed is taken into account, will exceed the maximum period fixed for the repayment of a loan by or under any enactment for the time being in force:[Provided further that, in the case of loans other than loans made by the [appropriate Government] [[Inserted by the Devolution Act, 1920 (38 of 1920), Section 2 and Sch. I.], no amount exceeding twenty-five lakhs of rupees shall be borrowed unless the terms, including the date of flotation, of such loan have been approved by the [appropriate Government] [Substituted for Governor-General in Council, by A.O. 1937]]
(2)Nothing in this section shall be deemed to authorize any local authority-
(a)to borrow or spend money for any purpose for which, under the law for the time being in force, it is not authorized to apply its funds, or
(b)to borrow money by means of the issue of bills or promissory notes payable within any period not exceeding twelve months.
Himachal Pradesh :In its application to the State of Himachal Pradesh in sub-section (1) of section 3, for ":" occurring at the end of clause (v), substitute ", " and after clause (v) so amended add as under':"(vi) any other purpose which the State Government may declare to be a suitable one for which loans may be taken by Local Authorities generally or by a particular Local Authority".-H. P. Act 4 of 1974, section 2 (2-2-1974).After sub-section (2) of section 3, add as under :"(3) A local authority may, borrow a loan from other loaning institutions viz. the Life Insurance Corporation of India and the Housing and Urban Development Corporation etc., for the construction of buildings and sale thereof.For this purpose, the local authority may also mortgage its properties with the loaning institutions with the prior approval of the State Government".-H. P. Act 35 of 1976, section 2 (29-9-1976).Madhya Pradesh (Mahakoshal Region) :In its application to the State of Madhya Pradesh, in sub-section (1) of section 3 after clause (v), the following clauses shall be inserted, namely :"(vi) the meeting of its establishment charges, in case of temporary unforeseen financial difficulty;(vii) any exceptional expenditure of an urgent and unforeseen character not already provided for in this section."-C. P. Act 1 of 1922, section 2 (1-3-1923).Maharashtra :In its application to the State of Maharashtra, in sub-section (l) of section 3, after clause (v), insert clauses (vi) and (vii), namely :
"(vi) the meeting of its establishment charges, in case of temporary unforeseen financialdifficulty,
(vii)any exceptional expenditure of an urgent and unforeseen character not already provided for in this section."-Mah. Act 31 of 1975, section 4 (not yet enforced).
Punjab : Haryana : Chandigarh :In its application to Punjab, Haryana and Chandigarh in sub-section (1) of section 3, after clause (v), insert the following clause, namely :"(vi) any other purpose which the State Government may declare to be a suitable one for which loans may be taken by Local Authorities generally or by a particular Local Authority."-E.P. Act 17 of 1949, section 2 (29-10-1949); Punj. Act 41 of 1960: See now Act 31 of 1966, section 88.