(3)After such attachment, an officer as may be appointed in this behalf by the State Government shall deal with the Municipal Fund, or any portion thereof, so attached, in such manner as he thinks fit and may do all acts in respect thereof which any municipal authority or an officer or other employee of the Municipality might have done under this Act, if such attachment had not taken place, and may apply such Municipal Fund or the portion thereof, as the case may be, for payment of the arrear of the principal amount and the interest due in respect of such borrowing and of all expenses incurred on account of the attachment and subsequent proceedings:Provided that no such attachment shall defeat or prejudice any debt for the recovery of which the Municipal Fund was previously charged under any law for the time being in force, and all such prior debt shall be paid out of the Municipal Fund before any part thereof is applied for repayment of the money borrowed from the State Government.
