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The Orissa Local Authorities Loans Rules, 1975
Published vide Notification No. 8050-Legislative-1-12/75 UD, Orissa Gazette Extraordinary No. 819/1.5.1975
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(a) "the Act" means the Local Authorities Loans Act, 1914 (IX of 1914);
(b) "Government loan" means loan taken from Government Funds;
(c) "loan" means a loan, made, taken or raised, under the Act;
(d) "non-Government loan" means a loan raised, with the section of Government otherwise than from Government Funds; and
(e) "term of a loan" means the period elapsing between the date on which the loan is completely made, taken or raised and the date on which it is completely repaid.
3. Limitation of borrowing power. - A Local authority shall not borrow money for any of the purposes specified in Clauses (i), (ii), (iii) or (iv) of Subsection (1) of Section 3 of the Act, unless the work to be carried out is either-(a) within the local limits of the area subject to the control of the Local authority ; or
(b) for the benefit of the inhabitants within those limits.
4. Application. - When a Local authority desires to obtain a loan, It shall submit an application to the State Government showing-(a) the purpose for which the loan is required and where the loan is required for any of the purposes specified in Clauses (i), (ii), (iii) or (iv) of Sub-section (1) of Section 3, an estimate of the cost of the entire work or such part of it as proposed to carry out from loan;
(b) the amount which it is proposed to borrow;
(c) the Fund on the security of which it is proposed to borrow;
(d) the law or laws under which the said Fund or Funds is levied, received or held;
(e) the dates within the money is to be borrowed and when it is proposed to raise a loan in instalments, the amount of each instalment, the dates within which the first instalment is to be taken or raised, and the years in which it is intended to take or raise the other instalments;
(f) the rate of interest at which is proposed to borrow;
(g) the term of years for which the money is to be borrowed and the method by which it is to be repaid ; if it is proposed to repay the loan by means of sinking Fund, the rate of interest, at which the improvement of such sinking Fund is to be calculated; and
(h) an account of the financial position of the Local authority, including a statement of all existing prior charges on its funds.
Note. - All applications tor loans shall be submitted in the Form I appended to these rules.
5. Inquiry by State Government. - The State Government shall cause such inquiry as it thinks fit to be made into the statements contained in the application and into the utility of the purpose for which the loan is proposed. 6. If it appears to the State Government that the money ought not to be borrowed, it shall reject the application. 7. If it appears to the State Government that the money ought to be borrowed, it shall -(a) in case the application is for a loan from Government after calling for any further information which it may require, sanction the loan; or
(b) in case the application is for raising of the loan cause to be published in the Official Gazette and in such other manner as it may deem fit within the local limits of the area subject to the control of the Local authority, a copy of the application and such particulars in regard to any enquiry made under Rule 5 as it thinks necessary.
8. Disposal of application after publication. - After the expiry of one month from such publication under Rule 7 (b) and after calling for any further information which it may require and considering any objections which may be preferred, the State Government may-(a) reject the application ; or
(b) if so empowered sanction the raising of the loan.
9. Where a Local authority in its application desires the immediate grant, or sanction to the raising of a loan on the ground that Funds are urgently needed for any of the purposes mentioned in Clauses (ii), (iii) or (iv) of Sub-section (1) of Section 3 of the Act, the State Government if otherwise so empowered and if it is satisfied that the loan is urgently needed for any such purpose may, notwithstanding anything contained in Rules 5, 7 and 8, after such enquiry, if any, as it thinks fit sanction the raising of such loan at any time after the receipt of the application. 10. Government loans. - When a Local authority submits an application for a Government loan, the State Government may grant the loan provided the following conditions are fulfilled, namely :(a) The term for repayment of the loan should on no account exceed thirty years;
(b) The rate of interest, interest rebate and the date of commencement of the repayment shall be as decided by Government from time to time;
(c) Funds are available from the grant voted by the legislature for the purpose;
(d) The local body should furnish certificate of utilisation within, a period of one year from the date of drawal of the loan.
