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| STATE MORTGAGE AND INVESTMENT BANK |
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A LAW TO PROVIDE FOR THE ESTABLISHMENT OF THE STATE MORTGAGE AND INVESTMENT BANK WITH THE OBJECT OF CARRYING ON, AMONGST OTHER ACTIVITIES, THE BUSINESS PRESENTLY CARRIED ON UNDER THE CEYLON STATE MORTGAGE BANK ORDINANCE AND THE AGRICULTURAL AND INDUSTRIAL CREDIT CORPORATION ORDINANCE, FOR THE REPEAL OF THOSE ORDINANCES, AND TO MAKE PROVISION FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.
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| Law Nos, |
| 13 of 1975 |
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| 62 of 1981 |
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| 29 of 1984 |
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| 10 of 1994 |
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[15th May
, 1975 ]
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Short title.
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1. This Law may be cited as the State Mortgage and Investment Bank Law.
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Establishment of the State Mortgage and Investment Bank.
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2.
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(1) There shall be established a bank which shall be called the State Mortgage and Investment Bank (hereinafter referred to as the ” Bank “), and which shall consist of the persons who are for the time being members of the Bank under section 3.
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(2) The purpose of the Bank shall be to assist in the development of agriculture, industry and housing, by providing financial and other assistance in accordance with the provisions of this Law.
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(3) The Bank shall be a body corporate having perpetual succession and a common seal and shall under the above-mentioned name be capable of suing and being sued ; and shall subject to the provisions of this Law be capable of acquiring, holding, and alienating property movable and immovable and of doing all such acts and things as bodies incorporate may do and perform.
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Members of the Bank.
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3. The members of the Board of Directors shall be the members of the Bank.
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Head office of the Bank.
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4. The head office of the Bank shall be in Colombo. Such branch offices of the Bank as the Board considers necessary may be established by the Board.
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The Law governing the Bank
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5. The Bank shall be conducted and managed in accordance with the provisions of this Law to the exclusion of the provisions of the Companies Ordinance* and any other law specially governing banks.
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Business of the Bank-
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6. Subject to the provisions of this Law, the Bank is authorized to carry on and transact the several kinds of business specified in section 31.
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| MANAGEMENT BOARD OF DIRECTORS |
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7. The general supervision, control and administration of the affairs and business of the Bank shall be entrusted to a Board of Directors (hereinafter referred to as the ‘” Board “), consisting of nine fit and proper persons appointed by the Minister. Three of the persons so appointed shall be a representative each of
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(a) the Ministry of the Minister in charge of the subject of Agriculture,
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(b) the Ministry of the Minister in charge of the subject of Housing, and
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(c) the Ministry of the Minister in charge of the subject of Livestock Development. “.
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Powers of the Board.
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8. The Board may exercise all such powers and do all such acts and things as may be necessary for carrying on the business of the Bank.
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Acts of the Board not to be invalid by reason of any vacancy.
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9. No act or proceeding of the Board shall be invalid by reason only of the existence of any vacancy among the directors, or any defect in the appointment of a director.
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Director’s term of office.
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10. Every director shall ordinarily be appointed for a term of three years and he shall hold office for that period unless he dies, retires, or is removed or disqualified earlier.
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Remuneration of directors,
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11 A director may be remunerated out of the funds of the Bank in such manner and at such rates as the Minister may determine.
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Disqualification and removal of directors.
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12.
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(1) The Minister may, without assigning any reason, remove a director from office.
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(2) No person shall be appointed to the office of director who-
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(a) has been adjudicated an insolvent; or
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(b) is of unsound mind or has been convicted of an offence and sentenced to imprisonment without the option of a fine.
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(3) A person appointed to the office of director shall become disqualified to retain his office and shall ipso facto cease to be director if-
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(a) he is adjudicated an insolvent, or assigns his estate for the benefit of his creditors, or enters into a deed of arrangement with his creditors or makes an assignment of his remuneration for their benefit; or
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(b) he is of unsound mind or is convicted of an offence and sentenced to imprisonment without the option of a fine ; or
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(c) he is absent without leave from the Minister from all the meetings of the Board during any three consecutive months;
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Provided that a director becoming disqualified to retain his office and ipso facto ceasing to be a director under paragraph (c) shall not thereby be deemed ineligible for reappointment.
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(4) No member of Parliament shall be appointed to or retain the office of director.
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Vacancies on the Board
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13.
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(1) When a director ceases to hold office by reason of the expiry of the period for which he was appointed, the Minister shall make a new appointment. The retiring director shall be eligible for reappointment if not otherwise disqualified.
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(2) If a director ceases to hold office before the expiry of the period for which he was appointed, the Minister shall make a new appointment for the remainder of the period for which such director would have held office.
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(3) Where a director is granted leave of absence the Minister may make a new appointment for the period for which such director is granted leave.
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Chairman of the Board-
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14.
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(1) The Minister shall appoint from among the directors the Chairman of the Board. The Chairman shall preside at every meeting of the Board at which he is present and shall have a second or casting vote in all cases of an equality of votes. In the absence of the Chairman, the directors present at a meeting shall choose one of their number to preside who shall for that meeting have all the powers of the Chairman including the right to a casting vote.
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(2) Where a director who has been appointed the Chairman of the Board, is granted leave of absence for any period, the Minister shall make a new appointment, from among the directors, of a Chairman for that period.
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Meetings.
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15.
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(1) A meeting of the Board shall be held at least once a month or oftener if the Chairman deems it necessary.
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(2) The Chairman shall upon a written requisition of two directors call a special meeting. No such special meeting shall be held unless four days’ notice specifying the time of such meeting and the purpose for which it is to be held has been given by written or printed notice to every director.
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(3) If it appears to the Minister that any director is temporarily unable to discharge the duties of his office on account of ill health, absence from Sri Lanka or for any other cause or reason whatsoever, the Minister may appoint any other person to act in place of such director.
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(4) Subject to the provisions of this Law, the procedure to be followed at meetings of the Board shall be as determined by rules made under this Law or, in the absence of such rules, as may be determined by the Board.
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Quorum.
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16. Three members shall constitute a quorum at any meeting of the Board and all acts authorized or required to be done by the Board shall be decided by a majority of directors present and voting at a meeting at which a quorum is present:
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Provided that when only three members are present no loan exceeding twenty-five thousand rupees shall be sanctioned except by a unanimous resolution.
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Disclosure of interest by a director.
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17. A director who, or whose spouse or dependent child, is directly or indirectly interested in any business transacted or proposed to be transacted by the Board shall disclose the nature of such interest at the meeting of the Board where such business is discussed. The disclosure shall be recorded in the minutes of the Board, and such director shall not take part in any deliberation or decision of the Board with respect to that business, and shall withdraw from such meeting while such deliberation is in progress or decision is being made.
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Minutes.
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18. Minutes of the proceedings of every meeting of the Board shall be regularly drawn up and fairly entered in books to be kept for the purpose, and the books shall be so kept as to show properly tabulated details of the business transacted at such meeting. The minutes of the proceedings of each meeting shall be submitted at the next ensuing meeting, and if they are then passed as correct they shall be confirmed by the signature of the person presiding thereat, and shall thereafter be prima facie evidence of the proceedings of which they are a record.
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Powers of Minister to issue directions to the Board.
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19. The Minister may. after consultation with the Board, give to the Board general or special directions in writing as to the transaction of the business of the Bank and the Board shall give effect to such directions.
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Appointment and powers of the General Manager.
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20.
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(1) The Board shall appoint a General Manager to the staff of the Bank on such salary and with such allowances as may be fixed by the Board.
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(2) The General Manager shall be the chief executive officer of the Bank, and all acts which are directed by this Law to be done by the Bank or the Board may, unless the contrary intention appears from the context, be done by the General Manager if he is specially or generally authorized in writing thereto by the Board.
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(3) The General Manager or any other officer of the Bank specially authorized by the Board shall function as the Secretary to the Board. The General Manager and where the Board has authorized any other officer of the Bank to function as the Secretary to the Board such officer, shall attend and take part in every meeting of the Board, unless the Board otherwise directs, but shall have no right to vote thereat.
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Employees,
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21. For the purpose of carrying out the provisions of this Law, the Board may appoint such employees as the Board considers necessary. The Board may also, from time to time, fix and alter the salaries and allowances of such employees.
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Advisers, & c.
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22. The Board may, from time to time appoint any duly qualified person, firm or incorporate or unincorporated body to act as legal, economic, financial or technical advisors and a panel of valuers to the Bank, and such persons shall be remunerated in accordance with such scale of fees as may be prescribed.
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Agents,
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23. The Board may appoint any bank or any person as its agent in Sri Lanka or elsewhere to do any act on its behalf which it is authorized to delegate to another and it may enter into an agreement with such agent as to the duties to be performed and the remuneration therefor.
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Security from employees,
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24. Every employee of the Bank other than a member of any class of employees exempted by the Board, shall furnish security to the satisfaction of the Board for the due and faithful performance of his duties.
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Protection of employees.
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25. No director and no employee of the Bank shall be liable, either civilly or criminally, in respect of anything which he may have done or may have omitted to do when acting in good faith in pursuance or in supposed pursuance of his powers under this Law.
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Reimbursement for expenses incurred on behalf of the Bank.
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26. Every director. General Manager, auditor, secretary, adviser or other employee of the Bank shall be indemnified by the Bank from all losses and expenses incurred by him in or about the discharge of his duties, other than such losses and expenses as the Board may deem to have been occasioned by his misconduct or willful default.
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No director or employee of the Bank to guarantee loans.
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27. No director or employee of the Bank shall guarantee the repayment of any loan granted by the Bank to any other person.
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Restrictions on loans to directors.
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28. No loan shall be granted by the Bank to any director or employee of the Bank or to the spouse or a dependent child of a director or employee or to any company or firm in which a director or employee has a substantial interest:
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Provided however that the Bank may grant to its employee loans for the purchase of land for the construction of a dwelling house or for the purchase , construction, repair, renovation of or any extension to a dwelling house or for any other purpose prescribed by the rules made under this Law.
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Declaration of auditor,
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29. Every director General Manager, secretary, adviser, employee, secrecy member of agency, accountant or other person employed in the business of the Bank shall, before entering upon his duties, sign a declaration pledging himself to observe strict secrecy respecting all transactions of the Bank, its customers, and the state of accounts with any person and all matters relating thereto and shall by such declaration pledge himself not to reveal any matters which may come to his knowledge in the discharge of his duties except-
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(a) when required so to do.-
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(ii) by a court of law, or
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(iii) by the person to whom such matters relate;
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(b) in the performance of his duties; and
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(c) in order to comply with any of the provisions of this Law or any other law.
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Right to refuse to answer questions.
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30. Every director, General Manager, auditor, secretary, adviser, and other employee of the Bank shall decline to answer any questions concerning the business of the Bank which may be put to him on any occasion whatsoever, if he considers that the answer to such question would disclose or tend to disclose the secrets of the Bank or the business or affairs of any customer of the Bank, except in circumstances specified in the preceding section.
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Kinds of business the Bank is authorized to carry on and transact.
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31.
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(1) Subject to the provisions of this Law, the Bank is authorized to carry on and transact the several kinds or business hereinafter specified, namely-
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(a) to grant loans, subject to interest, to any person for the purpose of-
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(i) the purchase or lease, or the cultivation, development or improvement of any land used, or to be used, for any housing, agricultural or industrial purpose;
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(ii) the purchase or lease, or the construction, repair or renewal, of any building, factory, mill, mine, machinery or equipment used, or to be used, in connexion with any agricultural or industrial purpose;
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(iii) the purchase or lease of any land for the construction of a dwelling house;
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(iv) the construction, repair, renovation or extension of a dwelling house;
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(v) the purchase or lease of a dwelling house;
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(vi) the manufacture or preparation of any agricultural or industrial product or commodity for sale in the market;
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(vii) any purpose incidental, accessory or ancillary to any purpose mentioned in any of the foregoing sub-paragraphs;
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(viii) the liquidation of any debt already incurred for any purpose mentioned in any of the foregoing sub-paragraphs;
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(b) to grant loans of money, subject to interest, to any person for the purpose of conducting any agricultural or industrial business or for the settlement of debts incurred under any mortgage provided such mortgage has been to secure a loan raised for a purpose falling within the purview of the Bank;
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(c) to grant loans of money to any person for the purpose of carrying out any scheme approved by the Minister for the development of housing, agriculture or industry;
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(d) to carry on the business of hire- purchase in machinery, and equipment used in housing, agriculture or industry;
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(e) to manage, supervise or control, with or without remuneration, or to participate in the management, supervision or control, with or without remuneration, of any housing, agricultural or industrial undertaking of any client of the Bank where such management, supervision or control, or such participation therein, appears to the Board to be necessary in order to protect the interests of the Bank in any loan granted by the Bank;
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(f) to act, with or without remuneration, as the technical adviser of any client of the Bank, on any matter relating to any housing, agricultural or industrial undertaking of such client;
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(g) to buy, sell, invest or deal in stocks, shares, debentures, mortgages, bonds or securities issued or guaranteed by the Government, the Central Bank or any other bank or institution as may be approved by the Minister ;
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(h) to make arrangements for the insurance of any property mortgaged to the Bank by any client of the Bank ;
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(i) to purchase, take on lease or in exchange, hire or otherwise acquire any movable or immovable property, and any rights or privileges which the Bank may think necessary or convenient with reference to any business which the Bank is authorized to carry on, or the acquisition of which the Bank may deem to be necessary or advisable in order to facilitate the realization of any securities held by the Bank, or to prevent or diminish any apprehended loss or liability;
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(j) to establish and support, or aid in the establishment and support of, associations, institutions, trusts or schemes for the providing of pensions and of gratuities and other funds and conveniences calculated to benefit employees of the Bank or the dependants of such employees;
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(k) to improve, manage, develop, exchange, lease, mortgage, dispose of, sell, turn to account or otherwise deal with, all or any part of the property, and rights of the Bank, including any property, movable or immovable, on the security of which the Bank may have given any loan, or over which the Bank may have any power of disposal;
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(l) to give any guarantee or indemnity and to enter into any agreements with any foreign organization, the Government or any local authority or with any body corporate or other person, in order to obtain any rights, concessions and privileges that may seem to the Bank to be conducive to the purpose of the Bank;
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(m) to borrow or accept deposit from the Government or other institutions, on such terms and conditions as may be mutually agreed upon by them, so however, that the aggregate amount so borrowed or accepted as deposit at any time does not exceed the maximum limit imposed by the Minister;
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(n) to accept contributions from the Government towards the reserve fund of the Bank, subject to such terms and conditions as may be mutually agreed upon by them;
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(o) to accept term deposits, savings deposits, contract deposits and loan-linked savings deposits from any person of such sizable minimum amount and for such periods as may be determined by the Board with the concurrence of the Minister;
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(p) to invest the funds of the Bank in the shares, debentures or other appropriate securities of public or private companies engaged in housing, agriculture or industry;
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(q) to underwrite such shares, debentures, or other appropriate securities;
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(r) to sell in the market from the Bank’s portfolio of investments;
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(s) to finance projects in association or in partnership with other banks and such other institutions as may be approved by the Minister from time to time;
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(t) to act as the agent of any client of the Bank, or any other person, for the purpose of the purchase of any machinery or equipment or of any material of any description, required for the purpose of any agricultural or other prescribed undertaking of such client, or other person, as the case may be;
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(u) to acquire and undertake the whole or any part of any business carried on in Sri Lanka by any person, being a business which the Bank is authorized to carry on;
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(v) to establish and maintain any institute, or to participate in any scheme, for the provision of technical, financial and management services;
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(w) to conduct economic surveys, studies and seminars;
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(x) to train selected personnel of the Bank and other persons in accountancy, banking and valuation, project and credit appraisal, and engineering and scientific skills;
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(y) generally to take, or concur in taking, all such steps and proceedings as the Bank may deem to be best calculated to uphold and support the credit of the Bank, and to do all things incidental or conducive to the attainment of the objects, or the exercise of the powers, set out in the preceding paragraphs;
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(z) to set up the necessary organization for selling or marketing any product of any agricultural or other prescribed undertaking; and
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(aa) to purchase, take on lease or exchange, or otherwise acquire any immovable property which the Bank may consider necessary in order to carry on and transact any business of the Bank.
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(bb) to refinance loans granted by any bank or other institution as may be approved by the Minister.
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(1A) Where a loan has been granted by the Bank and the property mortgaged as security for that loan is not encumbered by any mortgage to any person other than the Bank, the Bank may, subject to the other provisions of this Law relating to the grant of loans, grant an additional loan the repayment of which shall be secured by a further mortgage of that property, and such further mortgage shall be deemed to be a primary mortgage.
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(2) Any object or purpose mentioned in any paragraph of subsection (1) of this section shall not, except where the context expressly so requires or where any limitation or restriction has been prescribed, be in any way limited or restricted by reference to, or inference from, the terms of any other paragraph of that subsection, or the objects therein specified, or otherwise.
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(3) In this section, the expression ” client of the Bank “, means a person who is in receipt of assistance from the Bank under this Law.
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‘Nomination by persons having term deposit.
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31A.
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(1) Any person over sixteen years of age who has a term deposit in the Bank may nominate person, (hereinafter called a “nominee”), to whom the moneys lying to the credit of such first mentioned person (hereinafter called “nominator”) shall be paid upon his death and, if his death should occur while the deposit exists, the moneys shall be so paid subject to the provisions of this Law,
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(2) A nomination made under subsection (1) shall have effect upon the death of the nominator notwithstanding anything in this last will to the contrary,
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(3) Any nomination made under subsection (1) shall be deemed to be revoked by the death of the nominee in the lifetime of the nominator or by written notice of revocation signed by the nominator in the presence of a witness (who shall attest the signature of the nominator) or by any subsequent nomination made by the nominator.
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(4) The moneys lying to the credit of a person who has made a nomination under subsection(1) in a term deposit shall, in the event of his death, be deemed not to form part of the estate or probate or administration proceeding under the Civil Procedure Code, and the transfer of such property shall not be an offence under that Code.
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(5) No payment shall be made by the Bank to any nominee unless the nominee”
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(a) submits an affidavit stating that he is the nominee ; and
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(b) produces a certificate as to his identity from a person acceptable to the Bank
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(6) A payment made subject to the conditions set out in subsection (5) to any nominee of a nominator who has died shall be a complete discharge of the obligations of the Bank in respect of the moneys lying to the credit of such nominator,
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(7) Where, upon the death of any person who has a term deposit other than a nominator, there is a sum of money to the credit of such person in the Bank, any officer or per. son who is duly authorized to make payments in respect, of accounts may, if satisfied that such first mentioned person died interstate and that letters of administration to the estate ox such person are not required by any written law, pay such sum of money, subject to the provisions of this Act, to the person or persons to whom such sum is required, in accordance with any rule in that behalf, to be paid:
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Provided that until rules are made in that behalf, any such sum may be paid to the person legally entitled to the payment thereof. ‘.
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Board’s power to grant loans,
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32.
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(1) No loan shall be granted except by a resolution of the Board and except on such terms and conditions as may be determined by the Board :
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Provided however, that the Board may authorize the General Manager or any other officer of the Bank to grant loans upto any such sum as may be determined by the Board.
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(2) All loans granted by the General Manager under the provisions of this section shall be reported to the Board at its next meeting.
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Withdrawal of the grant of a loan
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33. At any time after the approval of a loan and before the actual payment of the money, the Board may, at its discretion and without assigning any reason therefor, cancel or modify such approval and withhold payment of the whole or a portion of the money.
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Board’s power to investigate application of loan.
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34.
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(1) The Board may call upon any person to whom a loan has been granted to satisfy the Board that the loan has been or is being applied for the purpose for which it was granted, and the person so called upon may adduce evidence before any director or any other person appointed in writing for the purpose, to prove that the loan has been or is being applied for such purpose.
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(2) If the Board is not satisfied that the loan has been or is being applied for the purpose for which it was granted it may by an order direct that within the time named therein either the loan be repaid in full with interest or a sum equal to the loan be applied for the said purpose.
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(3) Where an order made by the Board under subsection (2) is not complied with, default shall be deemed to be made in respect of the whole of the unpaid portion of the loan and the interest due thereon up to date, and the provisions of Part V of this Law shall apply accordingly.
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Recalling of loans.
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35.
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(1) If at any time after the granting of a loan the Board is satisfied-
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(a) that, where the loan has been granted on the mortgage of property-
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(i) the property has depreciated in value to such an extent as to endanger the safety of the loan, or
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(ii) the title of the borrower is such that it ought not to have been accepted as adequate; or
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(b) that due to material mis-statements by the borrower or misapprehension of the actual facts by the Board the loan was granted in circumstances in which it would not have been granted if the true facts had been known: or
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(c) in any case where the loan has been secured by a mortgage of the interest of the borrower under a lease from the State, that the State intends to cancel or otherwise determine the lease ; or
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(d) that the borrower has failed to comply with, or has contravened, the terms of any loan agreements, the Board may issue an order, for compliance on or before a date to be specified in the order, requiring either additional security which is adequate in the opinion of the Board to be furnished in respect of that loan or the loan to be repaid either in full or in part.
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(2) Where an order issued under subsection (1) is not complied with, default shall be deemed to be made in respect of the whole of the unpaid portion of the loan and the interest due thereon up to date, and the provisions of Part V of this Law shall apply accordingly.
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Change of security.
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36. The Board may accept new security in lieu of the whole or part of any security it has already accepted for a loan, if the security tendered in substitution is such that the Board would be entitled to accept it alone or together with the portion of the old security which is to remain, as the case may be, as security for a new loan equal to the total principal and interest still outstanding on account of the old loan.
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Capital of the Bank and the power to raise money.
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37.
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(1) The authorized capital of the Bank shall be two thousand million rupees.
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(2)
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(a) The amounts outstanding on the appointed date of the sums advanced to the Agricultural and Industrial Credit Corporation in terms of section 22 (1) of the Agricultural and Industrial Credit Corporation Ordinance* together with the amount of the reserves of the Agricultural and Industrial Credit Corporation and the amount standing to the credit of the Reserve Fund of the Ceylon State Mortgage Bank on the appointed date shall form part of the capital of the Bank and all such amounts shall be deemed to be contributions to the capital of the Bank by the Government.
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(b) The Government shall, as soon as may be after the appointed date, make a contribution to the capital of the Bank so that the amount of such contribution together with the amounts referred to in paragraph (a) of this subsection shall be fifty million rupees. Such contribution by the Government shall be a charge on the Consolidated Fund.(* Repealed by this Law.)
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(3) The Bank may, from time to time, raise such sums of money as further contributions to the capital of the Bank in such manner as the Bank deems fit from the Government or any other source whatsoever in or outside the Republic of Sri Lanka and where such sums of money are raised from the Government, they shall be a charge on the Consolidated Fund.
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(4) The Bank may from time to time borrow from the Government, from the Central Bank, from any banking institution, from any foreign Government or from any other source whatsoever outside the Republic of Sri Lanka any sum of money on such terms and conditions as may be mutually determined.
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(5) No contributions or borrowings from any foreign government or any other source outside the Republic of Sri Lanka under subsections (3) and (4) may be raised or made without the approval of the Minister.
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State Mortgage and Investment Bank debentures, securities, stocks and shares.
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38.
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(1) The Board may create and issue debentures, stocks, shares and securities for the purpose of carrying on the business of the Bank.
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(2) Such debentures, stocks, shares and securities shall be issued, transferred, dealt with, redeemed and cancelled in accordance with such terms and conditions as may be determined by the Board with the approval of the Minister.
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Exemption of debentures from stamp duty.
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39. No stamp duty shall be payable in respect of any debentures, stocks, shares and securities issued under this Law or in respect of any instrument of transfer of any such debentures, stocks, shares and securities.
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charge upon Consolidated Fund.
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40. Should the funds of the Bank be insufficient to pay the interest and principal on debentures, stocks, shares and securities, such interest and principal shall be paid from the Consolidated Fund upon which they are hereby constituted a charge.
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Government to guarantee,
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41.
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(1) The Government may guarantee the repayment of the principal and the payment of interest on any loan raised by the Bank from any foreign Government or any other source under this Part of this Law.
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(2) Immediately after the guarantee is given under subsection (1) the Minister shall lay a statement of such guarantee before Parliament,
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(3) Where any sum is paid out of the Consolidated Fund in terms of the preceding section, the Minister shall forthwith lay before Parliament a statement that such sum has been so paid.
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Priority of charge created by loan.
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42. Where a loan is granted by the Bank, on the mortgage of property, such property shall, from and after that date of the mortgage, be charged with the payment of the loan with interest in priority to every other debt, mortgage or charge affecting it, except any earlier duly registered mortgage debt due to the creditor who, in good faith, advanced the money before the loan was granted by the Bank.
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Special provisions relating to loans given by the Bank.
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43. In the case of any borrowing by the Bank from the foreign Governments or other sources outside the Republic of Sri Lanka, the Bank shall bear any loss or be entitled to any profit arising from any revaluation of the Sri Lanka rupee :
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Provided that where such borrowings are guaranteed by the Government, Government shall bear any loss or be entitled to any profit.
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Anticipation of payments
|
44. The Bank may accept payment in respect of a loan before the date on which such payment is due, on such terms and conditions as the Bank may agree.
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Funds of the Bank.
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45.
|
(1) All sums of money received by the Bank or the Board-
|
(a) as contribution towards the capital of the Bank;
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(b) in carrying out the purposes of the Bank,
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(c) in exercising and performing the powers and duties of the Bank or such Board;
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(d) in conducting the business and administration of the Bank, shall be credited to the funds of the Bank.
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(2) All financial commitments or liabilities of the Bank or the Board arising from or incurred in connexion with-
|
(a) carrying out the purposes of the Bank,
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(b) the exercise and performance of the powers and duties of the Bank or such Board; and
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(c) the conduct of the business and administration of the Bank, shall be charged on the funds of the Bank.
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utilization of the profits of the Bank.
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46. The profits of the Bank shall be utilized for all or any of the purposes specified in section 7 of the Public the Bank. Corporations (Financial Control) Act.
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Action by Board where default is made.
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47. Whenever default is made in the payment of any sum due on any loan, whether on account of principal or of interest or of both, default shall be deemed to have been made in respect of the whole of the unpaid portion of the loan and the interest due thereon up to date; and the Board may, in its discretion, take action as specified either in section 48 or in section 50:
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Provided, however, that where the Board has in any case taken action, or commenced to take action, in accordance with section 48, nothing shall be deemed to prevent the Board at any time from subsequently taking action in that case by resolution under section 50 if the Board deems it advisable or necessary to do so.
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Authorization of manager to take possession of mortgaged property.
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48.
|
(1) Subject to the provisions of section 51, the Board may by resolution to be recorded in writing authorize any person specified in the resolution to enter upon any immovable property mortgaged to the Bank as security for any loan in respect of which default has been made or where the terms of any loan agreements are contravened in respect of such property, to take possession of and to manage and maintain such property, and to exercise the same powers in the control and management of such property as might have been exercised by the mortgagor if he had not made default, or contravened the terms of such agreement.
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(2) Whenever any sum of money due on any loan granted for any agricultural or industrial undertaking on the security of any plant, machinery or other movable property to the Bank is in default, or where the terms of any loan agreements are contravened in respect of such property, the Board may authorize any person specified in writing to enter and take possession of such agricultural or industrial undertaking in which such plant, machinery or other movable property is situate, and exercise the same power in the control and management of such undertaking as might have been exercised if such immovable property had been pledged or mortgaged.
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Procedure where manager is appointed.
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49.
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(1) Any person authorized by resolution of the Board under section 48 in respect of any property shall be entitled generally to take action in terms of the resolution and in particular-
|
(a) to sell the produce of such property;
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(b) to sell the goods manufactured wholly or partly from any plant or machinery, on the security of which any loan was granted, if default has been made in respect of such loan;
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(c) to receive the rents, profits or other income from such property ;
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(d) to pay the expenses incurred in the control and management of such property out of the income from such property;
|
|
(e) to appropriate to himself out of such income such sum (if any) as the Board may deem fit to fix as remuneration for his services;
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(f) to remain in possession of such property until all moneys due to the Bank under the mortgage on such property have been fully paid or until he is directed by the Board to yield possession of such property under subsection (2).
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(2) Every person authorized by resolution of the Board under section 48 in respect of any property shall-
|
(a) pay monthly, out of the income of such property such sum (if any) as the Board may in its discretion fix, to the mortgagor for his maintenance;
|
|
(b) pay quarterly or as otherwise directed by the Board to such person or persons and in such manner as the Board may direct the balance of the income from such property remaining after the payments hereinbefore authorized have been made;
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|
(c) keep and render to the Board at such intervals as the Board may determine, clear and accurate records of all sums received or paid out by him in respect of such property;
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|
(d) yield possession of such property to the mortgagor or some other person as directed by the Board and pay to the Board any balance of the income from such property remaining in his hands after the payments hereinbefore authorized have been made.
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|
(3) The Board shall when all sums due to the Bank under the mortgage have been fully paid surrender possession of the mortgaged property to the mortgagor and return to him any balance remaining of the income from such property.
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|
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Authorization of sale of mortgaged property.
|
50. Subject to the provisions of section 51, the Board may by resolution to be recorded in writing authorize any person specified in the resolution to sell by public auction any immovable or movable property mortgaged to the Bank as security for any loan in respect of which default has been made in order to recover the whole of the unpaid portion of such loan, and the interest due thereon up to the date of the sale, together with the moneys and costs recoverable under section 57, and thereafter it shall not be competent for the borrower or any person claiming through or under any disposition whatsoever of the right, title or interest of the borrower to and in the property made or registered subsequent to the date of the mortgage to the Bank, in any court to move to invalidate the said resolution for any cause whatsoever, and no court shall entertain any such application.
|
Authorization of any other person in place of person authorized under section 50, to sell property mortgaged to the bank.
|
50A.
|
(1) Where any person authorized under section 50 dies or is unable at any stage due to illness or any other cause to act under that section, the Board may, by resolution to be recorded in writing, authorize any other person, to sell by public auction such immovable or movable property mortgaged to the Bank as security for any loan in respect of which default has been made.
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|
(2) All acts and things done by the person authorized by the Board under section 50 in connexion with a sale by public auction prior to the date on which such other person was authorized under subsection (1), shall be deemed to be acts and things done by the person appointed under subsection (1) who shall take all necessary action to complete such sale.
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|
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Where borrower is dead.
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51.
|
(1) Save as otherwise provided in subsection (2), the provisions of section 48 and 50 shall apply in the case of any default notwithstanding that the borrower may have died or that any right, title or interest whatsoever in the property mortgaged to the Bank as security for the loan may have passed by the voluntary conveyance or operation of law to any other person.
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|
(2) Where a borrower is dead and probate of his will or letters of administration to his estate have not been issued to any person, the District Court of Colombo or the District Court of the district in which the property, mortgaged to the Bank by the borrower, is situate, may, upon application made in that behalf by the Board and after service of notice of the application on such persons, if any, as the court may order, and if satisfied that the grant of probate or the issue of letters of administration is likely to be unduly delayed, appoint a person to represent the estate of the borrower for the purposes of this section; and the provisions of sections 48 and 50 shall not apply in the case of any default made by such borrower unless and until a person is appointed under this subsection to represent the estate of such borrower.
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|
|
Notice of resolution.
|
52. Notice of every resolution under section 50 authorizing the sale of any property shall be published in the Gazette and in a daily newspaper, and copies of such notice shall be despatched to the borrower, if he is alive, and to every person who has, in respect of that property, registered his address under section 84(1), and, if that property consists of the interest of a lessee under a lease from the State, to the Land Commissioner.
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Notice of sale.
|
53. Notice of the date, time and place of every sale shall, not less than fourteen days before the date fixed for the sale, be published in the Gazette and copies of such notice shall be-
|
(a) despatched to the borrower, if he is alive, and to every person to whom notice of any resolution is required to be despatched under section 52;
|
|
(b) posted on or near the property which is to be sold ; and
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|
(c) affixed to the walls of the Kachcheri and the several District Courts, Magistrates’ Courts and Primary Courts within the jurisdiction of which the property is situate.
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Payment before sale-
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54.
|
(1) If the amount of the whole of the unpaid portion of the loan, together with interest including any penal or other interest payable under the proviso to section 76 due thereon, and of the moneys and costs, if any, recoverable by the Board under section 57 is tendered to the Board at any time before the date fixed for the sale, the property shall not be sold, and no further steps shall be taken in pursuance of the resolution under section 50 for the sale of that property.
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|
(2) If the amount of the installment or equated payment or other payment in respect of which default has been made, together with any penal or other interest payable under the proviso to section 76 due thereon, and of the moneys and costs, if any, recoverable by the Board under section 57 is tendered to the Board at any time before the date fixed for the sale, the Bank may in its discretion direct that the property shall not be sold and that no further steps shall be taken in pursuance of the resolution under section 50 for the sale of that property.
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|
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Upset Price.
|
55. The Board may fix an upset price below which the property shall not be sold to any person other than the Bank.
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|
Default in respect of one of several loans on same property.
|
56.
|
(1) In any case where two or more loans have been granted by the Bank on the security of the same property and default is made in the payment of any sum due upon any one or more of such loans, the foregoing provisions of this Law shall apply notwithstanding that default may not have been made in respect of the other loan or any of the other loans, and the Board may, in any such case, by resolution under section 50 authorize the sale of the property for the recovery of the total amount due to the Bank in respect of both or all of the loans, as the case may be, and the provisions of this Part of this law shall apply accordingly.
|
|
(2) Nothing in sections 47 to 62 (both sections inclusive) shall preclude the Board from recovering the amount due on a mortgage bond in accordance with the provisions of any other written law.
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|
|
Recovery of expenses and costs incurred by the bank.
|
57. Besides the amount due on any loan, the Board may recover from the debtor, or any person acting on his behalf-
|
(a) all moneys expended by the Bank, in accordance with the covenants contained in the mortgage bond executed by the person to whom the loan was granted, in the payment of premiums and other charges in respect of any policy of insurance effected on the property mortgaged to the Bank, and in the payment of all other costs and charges authorized to be incurred by the Bank, under the covenants contained in such mortgage bond and executed by the debtor;
|
|
(b) the costs of advertising the sale and of selling the mortgaged property; and
|
|
(c) in any case where the property mortgaged as security for the loan consists of the interest of the debtor under a lease from the State, and such property has been surrendered to the State in accordance with the provisions of section 63, all moneys paid to the State by the Board on such surrender as moneys due to the State by the debtor under the said lease: Provided that the costs incurred under paragraph (b) shall not exceed such percentage of the loan as may, from time to time, be fixed by resolution of the Board.
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|
|
Payment of excess.
|
58. If the mortgaged property is sold. the Bank shall, after deducting from the proceeds of the sale the amount due on the mortgage and the moneys and costs recoverable under section 57, pay the balance remaining, if any, either to the debtor or any person legally entitled to accept the payments due to the debtor, or where the Board is in doubt as to whom the money should be paid, into the District Court of the district in which the mortgaged property is situate.
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|
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59.
|
(1) If the mortgaged property is sold, the any two members of the Board shall on behalf of the Board sign a certificate of sale and thereupon all the right, title, and interest of the debtor to and in the property shall vest in the purchaser ; and thereafter it shall not be competent for any person claiming through or under any disposition, whatsoever, of the right, title or interest of the debtor to and in the property, made or registered subsequent to the date of the mortgage of the property to the Bank, in any court to move to invalidate the sale for any cause whatsoever, or to maintain any right, title or interest to or in the property as against the purchaser.
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|
(2) A certificate signed under subsection (1) shall be conclusive proof, with respect to the sale of any property, that all the provisions of this Law relating to the sale of that property have been complied with.
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|
(3) If the purchaser is some person other than the Bank, the certificate shall be substantially in the prescribed form and, if the purchaser is the Bank, the certificate shall be substantially in such other form as may be prescribed.
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|
(4) Every certificate of sale shall be liable to stamp duty and charges as if it were a conveyance of immovable property and to any registration and other charges authorized by law, alt of which shall be payable by the purchaser.
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|
(5) Where the property sold consists of the interest of a lessee under a lease from the State, then, if the purchaser of the property is some person other than the Bank, the certificate of sale shall not be signed by the Board unless the Land Commissioner, in the exercise of his discretion, has approved the purchaser.
|
|
(6) Whenever the Land Commissioner refuses, under subsection (5), to approve any purchaser of the interest of a lessee under a lease from the State-
|
(a) all sums paid to the Bank by the purchaser in respect of the sale shall be repaid to him by the Board;
|
|
(b) the costs of advertising and holding such sale shall be deemed to be costs recoverable by the Board under section 57 ; and
|
|
(c) the property shall be resold in accordance with the provisions of this Law.
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|
|
|
Order for delivery of possession.
|
60.
|
(1) The purchaser of any immovable property sold in pursuance of the preceding provisions of this Law shall, upon application made to the District Court of Colombo or the District Court having jurisdiction over the place where that property is situate, and upon production of the certificate of sale issued in respect of that property under section 59, be entitled to obtain an order for delivery of possession of that property.
|
|
(2) Every application under subsection (1) shall be made, and shall be disposed of, by way of summary procedure in accordance with the provisions of Chapter XXIV of the Civil Procedure Code; and on all documents filed for the purpose of each such application and on all proceedings held thereupon, stamp duties and other charges shall be payable at the respective rates payable under any written law for the time being in force, on application for, and proceedings connected with or incidental to, the execution of a decree of a District Court for the delivery of possession of any immovable property of the same value as the property to which such application relates.
|
|
(3) Where any immovable property sold in pursuance of the preceding provisions of this Law is in the occupancy of the debtor or of some person on his behalf or of some person claiming under a title created by the debtor subsequently to the mortgage of the property to the Bank, the District Court shall order delivery to be made by putting the purchaser, or any person whom he may appoint to receive possession on his behalf, in possession of the property.
|
|
(4) Where any immovable property sold in pursuance of the preceding provisions of this Law is in the occupancy of a tenant or other person entitled to occupy the same, the District Court shall order delivery to be made by affixing a notice that the sale has taken place, in the Sinhala and Tamil and English languages, in some conspicuous place on the property, and proclaiming to the occupant in the customary mode or in such manner as the court may direct, at some convenient place, that the interest of the debtor has been transferred to the purchaser. The cost of such proclamation shall be fixed by the court and shall in every case be prepaid by the purchaser.
|
|
(5) Every order under subsection (3) or subsection (4) shall be deemed, as the case may be, to be an order for delivery of possession made under section 287 or 288 of the Civil Procedure Code, and may be enforced in like manner as an order so made, the debtor and the purchaser being deemed, for the purpose of the application of any provision of that Code, to be the judgment-debtor and judgment-creditor, respectively.
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|
|
Cancellation of sale
|
61. Where the property sold has been purchased on behalf of the Bank, the Board may at any time before it resells that property, cancel the sale by an endorsement to that effect on a certified copy of the certificate of sale, upon the debtor or any person on his behalf paying the amount due in respect of the loan for which the property was sold (including the costs of seizure and sale) and interest on the aggregate sum at a rate not exceeding the prescribed rate per annum. Such an endorsement shall, upon registration in the office of the Registrar of Lands, revest the said property in the debtor as though the sale under this Law had never been made.
|
|
Resale by the Bank.
|
62. If the property so sold has been purchased on behalf of the Bank, and the sale is not cancelled under section 61, the Board may, at any time, resell the property and transfer to the purchaser by endorsement on a certified copy of the certificate referred to in subsection (3) of section 59, all the right, title and interest which would have been acquired by the purchaser at the original sale. The endorsement shall be liable to the same stamp duty and charges as a certificate to a purchaser at the original sale, and shall, when it is registered in the office of the Registrar of Lands, vest such right, title and interest as aforesaid in the purchaser.
|
|
Limit of retention of property by the Bank.
|
63. If at any sale in pursuance of the preceding provisions of this Law, the Bank has purchased any property sold for default in the repayment of a loan, the Bank shall not hold such property for a longer period than it is necessary to enable the Bank to resell the property for such a sum as will cover the total amount due to the Bank on account of loan, interest, expenses and costs:
|
|
Provided that where such property consists of the interest of a lessee under a lease from the State, the Board may, instead of reselling such property, surrender the lease to the State on such terms and conditions as may be agreed upon between the Board, the Minister and the Minister in charge of the subject of State Lands.
|
|
Meaning of property.
|
64. In this Part, unless the context otherwise requires, ” property ” in any ease where a loan is secured by a mortgage of the interest of a lessee under a lease from the State, means the right, title and interest of the lessee under the lease.
|
|
|
Applicability of the Public Corporations (Financial Control) Act.
|
65.
|
(1) The financial year of the Bank shall be the calendar year.
|
|
(2) The provisions of the Public Corporations (Financial Control) Act shall, mutatis mutandis, apply to the financial control and accounts of the Bank.
|
|
|
Custody and affixing of common seal.
|
66.
|
(1) The common seal of the Bank shall be in the custody of the officer of the Bank authorized by the Board to function as the Secretary to the Board and shall not be affixed to any instrument or document except in the presence of that officer and two directors all of whom shall sign the instrument or document in token of their presence.
|
|
(2) The common seal of the Bank may be altered in such manner as may be determined by the Bank.
|
|
|
Certain written law not to apply to the Bank
|
67. The provisions of the Debt Conciliation Ordinance and the Money Lending Ordinance shall not apply to, and in relation to, the Bank; and accordingly such provisions shall be read and construed subject to the preceding provisions of this Law.
|
|
The Bank deemed to be banking institution under the Monetary Law Act.
|
68. The Bank shall be deemed to be a banking institution within the meaning and a for the purposes of the Monetary Law Act and the provisions of that Act shall be read and construed accordingly.
|
|
Receipts when valid-
|
69. A receipt signed by two directors or by any person expressly authorized by the Board to give receipts, shall be an effectual discharge for moneys paid to the Bank.
|
|
Contracts.
|
70.
|
(1) Contracts on behalf of the Bank may be made as follows :-
|
(a) a contract which if made between private persons would be by law required to be in writing, may be made on behalf of the Bank in writing under the common seal of the Bank,
|
|
(b) a contract which if made between private persons is by law required to be in writing signed by the parties to be charged therewith, may be made on behalf of the Bank in writing signed by any person or persons duly authorized thereto as hereinafter provided ; and
|
|
(c) a contract which if made between private persons would by law be valid although made by parol, may be made on behalf of the Bank by any person or persons duly authorized thereto as hereinafter provided.
|
|
|
(2) A contract made according to this section shall be effectual in law and shall bind the Bank and all other parties thereto and their legal representatives.
|
|
(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorized by this section to be made.
|
|
|
Bills of exchange and promissory notes.
|
71. A bill of exchange or promissory note shall be deemed to have been made, executed, or endorsed on behalf of the Bank, if made, executed or endorsed in the name of, or by or on behalf of, or on account of, the Bank by any person or persons duly authorized thereto as hereinafter provided.
|
|
Persons authorized to act on behalf of the Bank.
|
72. No person, other than the persons thereto expressly authorized by the Board and acting within the limits of the authority so conferred on them, shall have any authority to make, draw, accept or endorse any promissory note, bill of exchange, cheque or order for the payment of money in the name or on behalf of the Bank or to enter into any contract so as to impose thereby any liability on the Bank or otherwise to pledge the credit of the Bank.
|
|
Execution of deeds abroad.
|
73.
|
(1) The Board may, by writing under its common seal, empower any person generally or in respect of any specific matter, as its attorney, to execute deeds on its behalf in any place outside the Republic of Sri Lanka.
|
|
(2) A deed signed by such attorney on behalf of the Bank and under his signature or seal shall bind the Bank and have the same effect as if it were under its common seal.
|
|
|
|
74.
|
(1) The Board may make rules for or in respect of all or any of the following matters:-
|
(a) all matters stated or required by this Law to be prescribed or for which rules are authorized to be made by this Law;
|
|
(b) the issue, registration, transfer, redemption and cancellation of debentures and all matters incidental to, or consequential upon, such issue, registration, transfer redemption or cancellation;
|
|
(c) the forms to be used for any of the purposes of this Law.
|
|
|
(2) Every rule made under subsection (1) shall be published in the Gazette.”.
|
|
|
Regulations made by the Minister.
|
75.
|
(1) The Minister may make regulations to give effect to the principles and provisions of this Law.
|
|
(2) Every regulation made by the Minister shall be published in the Gazette and shall come into operation on such date as may be specified in the regulation or if no such date is so specified on the date of such publication.
|
|
(3) Every regulation made by the Minister shall be brought before Parliament as soon as may be, after the publication thereof by a motion, that such regulation be approved.
|
|
(4) Any regulation which Parliament refuses to approve shall be deemed to be rescinded, but without prejudice to the validity of anything previously done thereunder. The date on which the regulation shall be deemed to be rescinded shall be the date on which Parliament refuses to approve the regulation.
|
|
(5) Notification of the date on which any regulation made by the Minister is deemed to be rescinded shall be published in the Gazette.
|
|
|
Penal interest in case of default
|
76. Any instrument to secure a loan by the Bank may provide that if the borrower fails or neglects to pay, on the due date, the installment and interest or to make the equated or other payment, as the case may be, then due in respect of the loan, then interest shall be payable on the loan at such rate in excess of that at which the loan has been granted as may be prescribed by the rules under section 74:
|
|
Provided, however, that the Board may, in its absolute discretion, waive the payment of interest at the prescribed rate referred to in the preceding provisions of this section, and may, in lieu thereof, determine that interest up to double the agreed rate shall be payable on the installment in default, for the period commencing on the date on which the installment was due and ending on the date on which the installment was paid.
|
|
Power to recall loan on change of ownership of security.
|
77. Whenever the Bank grants a loan, on the security of movable or immovable property and the mortgagor executes any instrument of sale or any other disposition affecting the said property, the Bank shall have the power to recall the loan granted, or charge such new owner, the current rate of interest, and for this purpose require the new owner to enter into any agreement as may be deemed necessary.
|
|
Power to inspect valuation rolls of local rating authorities.
|
78. For the purpose of deciding whether any immovable property tendered as security for a loan should or should not be accepted, the Bank shall have access, without fee or charge, to the valuation roll of any local rating authority, and the officers of every such authority shall, upon application, submit to the Bank full particulars as to any valuation of rate able property in respect of which such- local authority has power to levy rates.
|
|
Liability as public servants of directors and employees.
|
79. Every director, and every employee of the Bank, including an agent, valuator and inspector shall, when acting in any such capacity, be deemed to be public servants within the meaning of the Penal Code.
|
|
Forgery of debentures,
|
80. Sections 58 and 59 of the Monetary Law Act shall apply to debentures issued by the Bank as if there were substituted in those sections-
|
(a) the word ” debenture ” for the words ” currency note “; and
|
|
(b) the word ” directors ” for the words ‘” Governor of the Central Bank “.
|
|
|
False evidence
|
81.
|
(1) Whoever, during any examination authorized by this Law, makes upon oath a statement which is false, and which he either knows or believes to be false, or does not believe to be true, shall be deemed to have intentionally given false evidence in a stage of a judicial proceeding and shall be punished therefor in accordance with the Penal Code.
|
|
(2) Whoever makes a declaration required by this Law or rules thereunder knowing it to be untrue in any particular shall be guilty of giving false evidence and shall be punished therefor in accordance with the Penal Code.
|
|
|
Liability of directors and values for participating in the scanciiuning of certain loans.
|
82.
|
(1) A director who participates in the discussion of, or votes upon, any resolution for the granting of a loan,-
|
(a) to a person who is a debtor or a creditor of his or is in partnership with him or is in his employ ; or
|
|
(b) on the security of any property in which he has a pecuniary interest, shall be liable, on conviction, to a fine not exceeding five thousand rupees, or in default of payment, to imprisonment of either description for a period not exceeding three months.
|
|
|
(2) A person who acts as valuer in respect of an application for a loan-
|
(a) by a person to whom he stands in any of the relationships set out in subsection (1); or
|
|
(b) on the security in which he has a pecuniary interest, shall be liable to a fine of five hundred rupees.
|
|
|
|
Offences.
|
83.
|
(1) Any person who contravenes or fails to comply with any provision of this Law or of any regulation or rule made thereunder, shall be guilty of an offence and shall, on conviction after trial before a Magistrate, be liable to a fine not exceeding five thousand rupees or to imprisonment of either description for a term not exceeding one year, or to both such fine and imprisonment.
|
|
(2) Where an offence under this Law is committed by a body of persons, then-
|
(a) if that body of persons is a body corporate, every director and officer of that body corporate; or
|
|
(b) if that body of persons is a firm, every partner of that firm, shall be deemed to be guilty of that offence :
|
|
Provided, however, that a director or officer of such body corporate, or a partner of such firm, shall not be deemed to be guilty of such offence, if he proves that such offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
|
|
|
|
Registered address and notices.
|
84.
|
(1) Every debenture holder and every person-
|
(a) to whom a loan is granted by the Bank; or
|
|
(b) who has obtained probate of the will, or letters of administration to the estate of a person to whom a loan has been granted by the Bank, or who has, under the provisions of section 51 (2), been appointed to represent the estate of a deceased debtor; or
|
|
(c) to whom any right, title or interest whatsoever in any property, or in any part of any property, mortgaged to the Bank as security for any loan, has passed, whether by voluntary conveyance or by operation of law, shall register with the Bank an address to which all notices to him may be addressed.
|
|
|
(2) In any case where any debenture holder or other person fails to register his address under subsection (1), the Bank shall be absolved from all responsibility in respect of the service of any notice required under this Law to be served upon such debenture holder or person:
|
|
Provided, however, that in the case of any such failure on the part of any person who is a debenture holder or person to whom a loan has been granted by the Bank, the Bank shall publish a notice addressed to him in the Gazette and in a daily newspaper, and such notice shall be deemed to be duly given to that debenture holder or person on the day on which such notice is published.
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(3) A notice shall be deemed to have been duly served on any person for the purposes of this Law if the notice is sent by post in a registered letter to the address registered by that person under this section, and the service shall be deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post.
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Repeal of certain enactments.
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85.
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(1) The Ceylon State Mortgage Bank Ordinance and the Agricultural and Industrial Credit Corporation Ordinance are hereby repealed with effect from such date after the date of the commencement of business by the Bank as may be fixed for the purpose of this Law by the Minister by Order published in the Gazette.
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* (2) With effect from the date of the repeal of the Ordinances specified in subsection (1)-
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(a) the rights, obligations, assets and liabilities of the Ceylon State Mortgage Bank and the Agricultural and Industrial Credit Corporation on the date immediately preceding that date shall be the rights, obligations, assets and liabilities of the Bank;
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(b) every investment made in the name of the Ceylon State Mortgage Bank or in the name of the Agricultural and Industrial Credit Corporation ; shall be deemed to be investments made by the Bank under this Law;
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(c) all premises vested in the Ceylon State Mortgage Bank under the provisions of Chapter VA of the Ceylon State Mortgage Bank Ordinance, as amended by Act No. 33 of 1968, and let out under the provisions of section 70Y thereof shall be and remain the property of the Bank subject to the terms and conditions contained in the Rent Purchase Agreement executed thereunder;
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(d) the officers and servants of the Ceylon State Mortgage Bank and the Agricultural and Industrial Credit Corporation shall be deemed to be employees of the Bank on such terms and conditions as may be determined by the Bank: Provided that where the Bank is unable to offer suitable employment to any such officer or servant, or where such officer or servant is unwilling to accept an appointment on terms and conditions determined by the Board, the Bank shall pay compensation at such rate as may be prescribed;
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(e) all contracts, deeds, mortgage bonds and other bonds, agreements and other instruments which subsist or have effect immediately prior to that date in or to which the Ceylon State Mortgage Bank or the Agricultural and Industrial Credit Corporation has been named or subscribed as a party, shall have effect against, or in favour of, the Bank, as the case may be, as fully and effectively as if instead of such Ceylon State Mortgage Bank or the Agricultural and Industrial Credit Corporation, the Bank had been a party thereto and every reference therein to the Ceylon State Mortgage Bank Ordinance or the Agricultural and Industrial Credit Corporation Ordinance shall be deemed to be a reference to this Law, and all rules and regulations made thereunder.
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(f) all suits, appeals or other legal proceedings instituted by, or against, the Ceylon State Mortgage Bank or the Agricultural and Industrial Credit Corporation and pending immediately prior to that date shall not abate or be discontinued or in any way prejudicially affected by reason of such repeal, and accordingly may be continued and enforced by, or against, the Bank;
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(g)
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(i) the rights, obligations, assets, liabilities and moneys lying to the credit of the Ceylon State Mortgage Bank Provident Fund established under paragraph (c) of subsection (1) of section 94 of the Ceylon State Mortgage Bank Ordinance, on the day immediately preceding that date, shall be the rights, obligations, assets, liabilities and moneys of the State Mortgage and Investment Bank Provident Fund “A” established under section 31 of this Law; and
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(ii) the rights, obligations, assets, liabilities and moneys lying to the Credit of the Agricultural and Industrial Credit Corporation Provident Fund established under paragraph (k) of subsection (1) of section 51 of the Agricultural and Industrial Credit Corporation Ordinance, on the day immediately preceding that date, shall be the rights, obligations, assets, liabilities and moneys of the State Mortgage and Investment Bank Provident Fund “B” established under section 31 of this Law;
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(h) every investment made in the name of the Ceylon State Mortgage Bank Provident Fund shall be deemed to be investments made by the State Mortgage and Investment Bank Provident Fund ” A “, and every investment made in the name of the Agricultural and Industrial Credit Corporation Provident Fund shall be deemed to be investments made by the State Mortgage and Investment Bank Provident Fund “B ” established under section 31 of this Law;
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(i) all contracts, deeds, bonds, agreements and other instruments of the Ceylon State Mortgage Bank Provident Fund or the Agricultural and Industrial Credit Corporation Provident Fund which subsist or have effect immediately prior to that date shall have effect against, or in favour of, the State Mortgage and Investment Bank Provident Fund “A” or the State Mortgage and Investment Bank Provident Fund ” B “, as the case may be, established under section 31 of this Law, as fully and effectively as if, instead of the Ceylon State Mortgage Bank Provident Fund or the Agricultural or Industrial Credit Corporation Provident Fund, as the case may be, the State Mortgage and Investment Bank Provident Fund ” A ” or the State Mortgage and Investment Bank Provident Fund ” B ” had been a party thereto respectively; and
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(j) all suits, appeals or other legal proceedings instituted by or against the Ceylon State Mortgage Bank Provident Fund or the Agricultural and Industrial Credit Corporation Provident Fund, and pending immediately prior to that date shall not abate or be discontinued or in any way prejudicially be affected by reason of such repeal, and accordingly may be continued or enforced by, or against, the State Mortgage and Investment Bank Provident Fund “A” or the State Mortgage and Investment Bank Provident Fund ” B” established under section 31 of this Law, as the case may be.
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Interpretation.
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86. In this Law, unless the context otherwise requires-
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“appointed date” means the 15th day of May, 1975;
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” agriculture” includes the raising of crops, medicinal plants and herbs, horticulture, sericulture, beekeeping, forestry, animal husbandry, poultry farming, dairy farming (including livestock rearing and breeding and growing pasture and fodder and marketing of produce);
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” Central Bank ” means the Central Bank of Ceylon established under the Monetary Law Act;
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” director ” and ” General Manager ” means the persons appointed to such offices under this Law;
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” enterprise ” means any body of persons whether corporate or unincorporate, by whatsoever name or designation called, and includes a corporation sole or a sole proprietorship;
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” industry ” includes fishing, gemming, tourism, transport and the manufacture or preparation of any produce or commodity for sale in the market;
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” loan” means a loan of money and includes any overdraft or any other monetary accommodation by whatsoever name or designation called, but does not include any salary advance to the staff of the bank;
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” prescribed ” means prescribed by rules made under this Law.
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