(1) The
Municipality may, from time to time, raise, by a resolution in this
behalf passed at a meeting of the Municipality, a loan within the
limits set by the comprehensive debt limitation policy framed
under section 141, any sum of money which may be required for
the purpose of-
(a) construction of works under this Act, or
(b) acquisition of lands and buildings for the
purposes of this Act, or
(c) paying off any debt due to the State
Government, or
(d) repayment of a loan raised under this Act, or
(e) acquisition of a public utility concern which
renders such services as the Municipality is
authorized to render under this Act, or
(f) purchase of vehicles, and other machinery
necessary for carrying out the purposes of
this Act, or
(g) any other purpose for which the
Municipality is, by or under this Act or any
other law for the time being in force,
authorized to borrow:
Provided that any loan proposed to be raised
which goes beyond the limits set by the
comprehensive debt limitation policy as aforesaid
shall require the previous sanction of the State
Government in that regard to its purposes, the
quantum, the rate of interest and the period for
repayment, and the other terms and conditions, if
any:
Provided further that in addition to the loans
as aforesaid, the Municipality may also take loan
from the State Government or any statutory body or
public sector corporation:
Provided also that the State Government
shall grant any loan to, or guarantee any loan raised
by, the Municipality subject to its repaying capacity
ascertained in the prescribed manner.
(2) When any loan has been raised under sub-section (1),-
(a) no portion thereof shall, without the previous
sanction of the State Government, be applied to
any purpose other than that for which it has been
raised, and
(b) no portion of any loan raised for any of the
purposes referred to in that sub-section shall be
applied to the payment of salaries or allowances
to any officer or other employee of the
Municipality, other than those who are
exclusively employed for the purpose for which
the loan has been raised.
Explanation.- The expression dues under this Act in
sub-section (1) shall, for the purposes of clause (e) of that subsection, be deemed to include the income derivable from the public
utility concern referred to in that clause
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