State Act

The Mumbai Municipal Corporation Act.

109. Provisions as to exercise of borrowing powers.— The exercise of the powers of borrowing conferred by this Act shall be subject to the following provisions, namely:— (a) money shall not be borrowed for the execution of any work other than a permanent work including under this expression any work, of which the cost ought, in the opinion of 11[the 12[State] Government], to be spread over a term of years; 13[(b) the sum borrowed for any purpose other than for discharging any of the obligations arising out of the transfer to the corporation of the powers, duties, assets and liabilities of the Board of Trustees for the Improvement of the City of Bombay constituted under the City of Bombay Improvement Trust Transfer Act, 1925 (Bom. XVI of 1925), 14[or other than for discharging any obligation arising out of the acquisition, extension, administration, operation or maintenance of the 15[Brihan Mumbai Electric Supply and Transport Undertaking]] 16[or other than for discharging any obligations arising out of any of the provisions contained in Chapters IX and X,] including the balances of all the outstanding loans and debts borrowed for any of the said purpose shall not exceed in the whole 17[three time] the rateable value of the premises in 18[Brihan Mumbai] assessable, as hereinafter provided, to property taxes; and (c) the sum borrowed for the purpose of discharging any of the obligations, arising out of the transfer to the corporation of the powers, duties, assets and liabilities of the Board of Trustees for the Improvement of the City of Bombay constituted under the City of Bombay Improvement Trust Transfer Act, 1925 (Bom. XVI of 1925) including the balances of all outstanding loans and debts borrowed by the Board of Trustees for the Improvement of the City of Bombay under the City of Bombay Improvement Act, 1898 (Bom. IV of 1898), and the City of Bombay Improvement Trust Transfer Act, 1925 (Bom. XVI of 1925), and by the corporation for the purpose of discharging the aforesaid obligations, shall not at any time exceed in whole double the rateable value of the premises in 1[Brihan Mumbai] assessable, as hereinafter provided, to property taxes; and (d) the sum borrowed under clause (c) for the purpose of making good any deficit in budget estimate B framed under section 126 shall not in any year exceed twenty lakhs of rupees ;] 2[and (dd) the sum borrowed for the purpose of discharging any obligation arising out of the acquisition, extension, adminstration, operation, or maintenance of the 3[Brihan Mumbai Electric Supply and Transport Undertaking] including the balances of the all outstanding loans and debts borrowed for the said purpose, shall not at any time exceed in the whole 4[three times] the rateable value of the premises in 5[Brihan Mumbai] assessable, as hereinafter provided, property taxes; and] 6[(ddd) the sums borrowed for the purposes of discharging any obligations arising out of any of the provisions of Chapters IX and X, including the balances of all the outstanding loans and debts borrowed for any of the said purposes, shall not at any time exceed 7[on the whole thrice] the rateable value of the premises in 8[Brihan Mumbai] assessable, as hereinafter provided, to property taxes; and] 9[(e) the money may be borrowed for such time, not exceeding sixty years as the corporation, with the sanction of the 10[ 11[State] Government], determine in each case; 12[(f) the corporation shall either pay off the money so borrowed, within the period sanctioned, by equal annual instalments of principal or of principal and interest, or in such other manner as may be approved by 13[the 14[State] Government], or they shall in every year set a part as a sinking fund and accumulate in the way of compound interest, by investing the same in the purchase of public securities, such sum as will, with accumulations in the way of compound interest, be sufficient, after payment of all expenses, to pay off the moneys so borrowed within the period sanctioned or within such other period as may be approved by 15[the 16[State] Government];] (g) the corporation may at any time apply the whole or any part of a sinking fund set apart under this section in or towards the discharge of the moneys for the repayment of which the fund has been established: Provided that they pay into the fund each time that interest would have been received by the corporation in respect of the sinking fund or the part of the sinking fund so applied, and accumulate, until the whole of the moneys borrowed are discharged, a sum equivalent to the interest which would have been so received; (h) the investment every year of any sum set apart as portion of the principal of a sinking fund shall be made within fifteen days after the day on which the second half-yearly payment of interest is due by the corporation in respect of the loan for repayment of which such sinking fund is established; and the re-investment of any sum received by the corporation on account of interest on moneys appertaining to a sinking fund already invested, and the investment of any sum payable into the fund under clause 1[(g)] as the equivalent of interest which the corporation would have received, if the sinking fund or a part thereof had not been applied in any manner authorised by the said clause, shall be made within one month from the day on which such interest is received or from the day on which such interest would have been received, as the case may be: 2[Provided that during the year in which the loan for repayment of which a sinking fund has been established is due for repayment, the sum to be set apart as portion of the principal of such sinking fund and the sum received on account of interest on moneys forming part of such sinking fund may be retained by the corporation in such form as they think fit;] (i) where money is borrowed for the purpose of discharging a previous loan the time for repayment of the money so borrowed shall not, unless with the sanction, of 3[the 4[State Government], extend beyond the unexpired portion of the period for which the original loan was sanctioned and shall in no case be extended beyond the period of sixty years from the date of the original loan]: 5[Provided that, nothing contained in this clause shall apply to any sum borrowed for the purposes of any capital works in relation to Chapters IX and X].