- The trustees under sub-section (2) of section 303 may apply a sinking fund or any part thereof in or towards the discharge of the loan or part of a loan for which such fund was created and, until, such loan or part is wholly discharged shall not apply the same for any other purposes:Provided that when any loan or part there of has been consolidated under section 306, the trustees shall transfer to the sinking funds of the consolidated loan so created such part of the sinking funds of the original loans as may be proportionate to the amount of the original loans incorporated in the consolidated loan.
