Section 6 in The M.P. Goldsmith Rehabilitation (Loans) Rules, 1963
6. Security for repayment of loan.
(1)As soon as may be after an application for loan has been sanctioned, the applicant shall execute a bond in Form II undertaking to apply the loan for the purpose or purposes for which, and to fulfil the conditions on which, the application has been sanctioned. In addition to this bond, the borrower may be required by the Collector to execute a personal bond, in Form III when the amount of loan does not exceed Rs. 1500/- and a surety bond in Form IV when the amount of loan exceeds Rs. 1500/- and for the amount in excess of Rs. 1500/- in favour of State Government.(2)The assets created from the loan shall be deemed to be mortgaged or hypothecated, as the case may be, to the State Government for the repayment of loan together with interest thereon, if any, and the amount of loan and the interest thereon shall be first charged on such assets.(3)Subject to the provisions of sub-rule (2) the borrower shall not without the prior approval of the Collector mortgage, convey or otherwise transfer any of his interests in the whole or any part of the assets acquired with the loan and any mortgage, conveyance or other transfer without such approval shall be void as against the State Government:Provided that nothing in this sub-rule shall affect borrower's right to sell such articles of his stock-in-trade as are meant for sale to customers in the normal course of business.
