Panchayat:Repo18/vol2-page0280
4. Remedy by attachment if loan not repaid.- If any money borrowed in accordance with the provisions of this Act, or any interest or costs due in respect thereof, is or are not repaid according to the Conditions of the loan, the Government if itself the lender, may, and if the Government is not the lender shall on the application of the lender attach the funds on the security of which the loan was made. After such attachment, no person, except an officer appointed in this behalf by the Government, shall in any way deal with the attached funds, but such officer may do all acts in respect thereof which the borrowers might have done if such attachment had not taken place and may apply the proceeds in satisfaction of the loan and of all interests and costs due in respect thereof and of all expenses caused by the attachment and subsequent proceedings:
Provided that no such attachment shall defeat or prejudice any debt for which the funds attached were previously pledged in accordance with law but all such prior charges shall be paid out of the proceeds of the funds before any part of the proceeds is applied to the satisfaction of the liability in respect of which such attachment is made.
5. Power of local authority to guarantee payment of interest on, or to create a fund for repayment of capital expended on any work to which the funds may be applied- The Government may authorise any local authority either severally or in conjunction with any other local authority, to charge its funds or any part thereof by way of guarantee for the payment of interest on, or by the creation of a fund for the repayment of, money expended or to be expended on any work or for any of the purposes to which such funds might be by law applied.
6. Remedy by attachment if engagements not fulfilled.- In the event of default being made by a local authority in the fulfillment of engagements entered into under the last preceding section, the Government may on the application of a person entitled under such engagements, attach the funds made Subject to charge on account thereof. After such attachment, no person, except an officer appointed in this behalf by the Government shall in any way deal with the attached funds; but Such officer may do all acts in respect thereof which the local authority might have done if such attachment had not taken place, and may apply the proceeds to the discharge of the liabilities incurred and in payment of all costs due in respect thereof, and of all expenses caused by the attachment and subsequent proceedings consequent thereon:
Provided that no such attachment shall defeat or prejudice any debt for which the funds attached were previously pledged in accordance with law; but all such prior charges shall be paid out of the proceeds of the funds before any part of the proceeds is applied to the satisfaction of a liability in respect of which such attachment is made.
7. Issue of short term bills.- (1) Subject to the provisions of Section 31 of the Reserve Bank of India Act, 1934, any local authority to which the Government may by notification in the Gazette extend the provisions of this sections, may, with the previous sanction of the Government, borrow money by means of the issue of bills or promissory notes payable within any period, not exceeding twelve months, for any purpose for which Such local authority may lawfully borrow money under the provisions of this Act.
(2) The Government may, by general or Special order, regulate the conditions on which money may be borrowed or repaid under this section.
8. Power of Government to make rules.- (1) The Government may, by notification in
the Gazette make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power such rules may provide as to:-
(i) the nature of the funds on the Security of which money may be borrowed or interest guaranteed;
(ii) the Works for which money may be borrowed or for the carrying out of which the payment of interest may be guaranteed;
(iii) the manner of making applications for permission to borrow money;
(iv) the manner of making applications for sanction to give guarantee under Section 5;
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