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| STATE MORTGAGE BANK |
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AN ORDINANCE FOR ESTABLISHING AND REGULATING THE CEYLON STATE MORTGAGE BANK.
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| Ordinance Nos, |
| 16 of 1931 |
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| 23 of 1934 |
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| 1 of 1935 |
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| 58 of 1935 |
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| 24 of 1938 |
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| 24 of 1939 |
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| 14 of 1941 |
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| 11 of 1944 |
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| 10 of 1947 |
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| Act Nos, |
| 50 of 1949 |
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| 41 of 1950 |
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| 21 of 1955 |
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| 31 of 1956 |
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[1st October
, 1931 ]
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Short title.
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1. This Ordinance may be cited as the Ceylon State Mortgage Bank Ordinance.
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2. In this Ordinance except in so far as anything in the subject or context otherwise implies the following expressions shall have the meanings respectively assigned to them : –
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” the bank” means the Ceylon State Mortgage Bank;
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” board” means the board of directors appointed under this Ordinance ;
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” branch board” means a board established under section 24;
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” director”, ” member of a branch board”, ” manager “, and ” assistant manager ” means the persons appointed to these offices under this Ordinance;
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” prescribed ” means prescribed by this Ordinance or by rules made thereunder.
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Establishment of the bank.
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3. A bank to be called ” The Ceylon State Mortgage Bank” shall be established in Colombo for the purpose of granting long-term loans for agricultural and other prescribed purposes in accordance with the provisions of this Ordinance on the primary mortgage of immovable property situated in Ceylon.
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Legal status of the bank.
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4. The bank shall be a body corporate having perpetual succession and a common seal; it shall under the above-mentioned name be capable of suing and being sued ; and it shall subject to the provisions of this Ordinance be capable of acquiring, holding, and alienating property movable and immovable and of doing all such acts and things as bodies corporate may do and perform.
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Head office of the bank.
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5. The head office of the bank shall be in Colombo, and such branch offices as are necessary may be established in the provinces as the board considers necessary.
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The law governing the bank.
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6. The bank shall be conducted and managed , in accordance with the provisions of this Ordinance to the exclusion of the provisions of the Companies Ordinance and any other law specially governing banks.
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7. The business of the bank shall be the granting of loans and their recovery in accordance with the provisions of this Ordinance, and for this purpose the bank may raise funds by the issue of debentures and do all such other matters and things as may be incidental or subsidiary to its business.
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The board of directors.
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8. The general supervision, control, and administration of the affairs and business of the bank shall be entrusted to a board of directors consisting of five fit and proper persons appointed by the Minister.[1]
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Powers of board.
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9. 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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Directors’ term of office.
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10. Every director shall ordinarily be appointed for a term of five 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. Every director shall in accordance with the prescribed scale be paid a fee for each day or portion of a day upon which he is engaged upon the business of the bank.
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Disqualification and removal of directors.
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12.
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(1) The Minister1 may, for incapacity or misbehaviour, remove a director from his 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 and has not received a certificate ; 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 a 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 [1]
from all the meetings of the board during any two consecutive months.
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(4) No Member of Parliament[1] shall be appointed to
or retain the office of director:
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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[1] 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[1] 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[1] may make a new appointment for the period for which such director is granted leave.
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14.
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(1) The Minister1 shall each year appoint from among the directors the chairman of the board for the year. 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 for any year, is granted leave of absence for any period during that year, the Minister[1] shall make a new appointment, from among the directors, of a chairman for that period.
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15.
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(1) A meeting of the board shall be held at least once a month and oftener if the chairman thinks 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 at least 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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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 ten thousand rupees shall be sanctioned except by a unanimous resolution.
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17. 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 each 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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(II) OFFICERS OF THE BANK
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Appointment and salary of manager and assistant manager.
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18.
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(1) The board shall, subject to the approval of Minister,[1] appoint a person to be the manager of bank, and may, subject to the approval of the Minister,[1] remove such person from office and appoint another person in his stead.
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(2) The board may, subject to the approval of the Minister,[1] also appoint a person to the office of assistant manager of the bank, and subject to the approval of the Minister [1] remove such person from office and appoint another person in his stead.
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(3) The manager and assistant manager shall be full- time officers of the bank and shall receive such salary as may, with the approval of the Minister given with the concurrence of the Minister of Finance,[1] be fixed by the board.
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Powers of manager and assistant manager.
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19.
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(1) The manager shall be the chief executive officer of the bank and all acts which are directed by this Ordinance to be done by the board may, unless the contrary intention appears from the context, be done by the manager if, with the approval of the Minister,1 he is specially or generally authorized in writing thereto by the board. He shall attend and take part in every meeting of the board, unless directed not to attend by the board, but he shall not have the right to vote.
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(2) The assistant manager may do all such acts as he is required or permitted to do by the manager in writing, provided the manager may himself have done them.
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Subordinate officers.
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20. For the purpose of carrying out the provisions of this Ordinance, the board may by resolution appoint and at its discretion remove such officers and servants other than those herein before mentioned as it may think necessary. It may also from time to time fix and alter the salaries and allowances attached to such offices.
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21. The board may from time to time appoint fit and proper persons to inspect and value properties for the purpose of this Ordinance, and prescribe by rules made under section 93 the scales for their remuneration and travelling charges :
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Provided, however, that it shall be lawful-
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(a) for the board to determine by resolution ; or
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(b) for the manager, if, with the approval of the Minister given with the concurrence of the Minister of Finance,[1] he is specially ,or generally authorized thereto by the board under section 19 (1), to determine,
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the remuneration and travelling charges to be paid to any such person in respect of the valuation of any property.
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22. The board may from time to time appoint any duly qualified person to act as legal adviser to the bank and prescribe the scale of fees for his remuneration.
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23. The board may appoint any bank or any person as its agent in Ceylon 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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Establishment and members.
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24. The board may from time to time establish branch boards for any area, and subject to the approval of the Minister [1] it may from time to time appoint persons to serve on the branch boards.
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Duties and powers.
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25. A branch board shall be subordinate to the board
and shall-
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(a) consider all applications submitted to it and transmit them to the board with its recommendations thereon ; and
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(b) advise and assist the board in all matters in which its advice or assistance is sought.
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Constitution, members, and chairman.
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26. Every branch board shall consist of two members and a chairman who shall be specially appointed for
each year by the board.
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Term of office of members.
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27. A member of a branch board shall hold office for a period of two years, but he shall remain eligible for reappointment at the end of his term unless other-wise disqualified.
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Qualification and disqualification for membership.
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28. A member of a branch board shall be disqualified from holding office and shall be removed from office and cease ipso facto to hold office on the same grounds and for the same reasons that a director is disqualified or may be removed from or cease to hold office.
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Quorum and procedure at
meetings.
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29. Two members shall constitute a quorum of a branch board and all acts, matters, and things authorized or required to be done by a branch board shall be decided by a resolution of a meeting at which a quorum is present.
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30. Every member of a branch board shall in accordance with the prescribed scale be paid a fee for each day or portion of a day upon which he is engaged upon the business of the bank, and also all reasonable expenses incurred by him for travelling and subsistence while so engaged at the request of the board.
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31. The board may require the manager, assistant manager, accountant, shroff, or any other officer of the bank to furnish security for the faithful discharge of his duties in such amount and in such manner as the board thinks proper.
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32. No director and no officer 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 Ordinance.
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Disabilities of
directors, officers, and
servants.
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33. No officer or servant of the bank in receipt of a monthly salary and no director shall be granted a loan under this Ordinance or be entitled to purchase any immovable property sold under the provisions of this Ordinance.
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Declaration of fidelity and secrecy.
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34. Every director, every member of a branch board, and every employee of the bank shall, before entering upon his duties or exercising any power under this Ordinance, make before a Justice of the Peace a declaration of fidelity and secrecy in the prescribed form.
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Power to raise money on debentures.
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35. The board may raise from time to time by the issue of debentures funds necessary to carry on the
business of the bank :
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(a) Provided that the total indebtedness of the bank on the principal of the debentures shall never exceed the total sum loaned by the bank upon the security of mortgages and remaining unpaid nor shall such total indebtedness exceed twenty-five million rupees ;
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(b) Provided further that moneys repaid to the bank on account of the principal of loans and retained by the bank for the purpose of redeeming debentures shall for the purposes of this section be calculated for a Period not exceeding six months as a part of the total sum loaned by the bank upon the security of mortgages and remaining unpaid.
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Form of debentures, and exemption from stamp duty.
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36.
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(1) Debentures shall be in the form prescribed and be authenticated by the seal of the bank.
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(2) No stamp duty shall be payable in respect of
any debenture issued under this Ordinance or in respect of any instrument of transfer of any such debenture.
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Certificate of Secretary to the Treasury to be conclusive proof of regularity of issue of debenture.
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37. Every debenture shall be inscribed with a certificate bearing the signature or the facsimile of the signature of the Secretary to the Treasury[1] in the form set out in Schedule D. Such certificate shall for all purposes be conclusive evidence of the fact that the debenture has been duly issued in conformity with the provisions of this Ordinance and that the payment of the principal of the debenture and of the interest thereon is a charge upon the Consolidated Fund1 under section 40.
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Amount of each debenture, and rate of interest.
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38. Debentures shall be for a sum of fifty rupees each and shall bear interest at a rate to be fixed at the time of issue by the board with the approval of the Minister of Finance :
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Provided that where any applicant for debentures elects to have such debentures issued to him in a denomination higher than fifty rupees, the directors may, if they think fit, issue debentures to that applicant in that higher denomination.
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Issue of
debentures in the name of a minor.
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39.
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(1) The board may issue debentures in the name of a minor upon application in that behalf made by the minor, or by either of his parents or by the person to whom a certificate of curator ship to the estate of the minor has been granted.
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(2) Where any application is made under subsection (1) or where any debenture is issued upon such application, the provisions of this Chapter and of any rules made under section 93 (I) (d) shall, save as otherwise provided in this section or in section 42 but notwithstanding anything in any written or other law to the contrary, apply in like manner as if such application was made by or on behalf of, or such debenture was issued in the name of, a person who has attained the age of twenty-one years.
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Source for redemption of debentures.
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40. The interest on and principal of debentures shall be paid as they fall due from the funds of the bank in the manner hereinafter provided. Should such funds be insufficient to make any such payments, such interest and principal shall be paid from the Consolidated Fund[1] upon which they are hereby constituted a charge.
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41. The interest due on a debenture shall run from the day named in the debenture and shall be paid half-yearly on the thirty-first day of March and the thirtieth day of September.
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Payments in respect of debentures issued in the name of a minor.
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42.
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(1) The interest on and principal of any debenture issued in the name of a minor shall be paid-
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(a) if the debenture was issued upon the application of the minor, to the minor ;
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(b) if the debenture was issued upon the application of his parent or of a person to whom a certificate of curatorship to the estate of the minor has been granted, to the parent or to such person or to the successor of such person, as the case may be :
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Provided, however, that-
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(i) where a debenture is issued in the name of a minor upon application made by his parent, the interest on and principal of the debenture may, if the parent so requires, be paid to the minor; and
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minor; and
(ii) every payment made in respect of any debenture issued in the name of any person who is not, on the date of payment, a minor, shall be made to that person.
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(2) The receipt of any minor, parent or other person for any money paid to him in accordance with the pro-visions of subsection (1) shall, notwithstanding anything in any written or other law to the contrary, be a full and sufficient discharge therefor.
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Redemption of debentures.
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43. The board shall, prior to each issue of debentures, determine, with the approval of the Minister of Finance, the time or times at which and the manner in which debentures of that issue will be redeemed and the circumstances in which and the conditions and restrictions subject to which all or any of such debentures may be compulsorily redeemed.
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Cesser of interest after repayment is available.
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44. From and after the day appointed for the repayment of any debentures all interest on the principal moneys secured thereby shall cease and determine, whether payment of the principal is or is not
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45. A debenture holder may transfer all or any of his debentures in the manner prescribed by rules under this Ordinance.
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46. The bank shall keep a register in which all debentures shall be entered together with their dates of issue and the names of their holders.
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47. No transfer of a debenture shall be legally valid until such transfer has been entered in the register and endorsed upon the debenture by an officer of the bank thereto authorized in writing by the board.
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Transmission of debentures.
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48. The executors or administrators or heirs of a deceased debenture holder shall be the only persons recognized by the bank as having any title to the debentures of such deceased holder.
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The register evidence of title.
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49. The register shall be conclusive evidence that the persons entered therein as the holders of debentures are entitled to such debentures, of the dates of issue, redemption, cancellation, transfer, or transmission of debentures and of all other matters entered therein.
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Bank not to be affected with notice of trusts.
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50.
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(1) Save as is otherwise provided in this section, no notice of any trust in respect of any debenture shall be receivable by the bank.
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(2)
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(a) Any debenture holder or any person who is an applicant for any debenture or to whom any debenture is to be transferred may, by request made in writing to the board, require that he be described in the register of debentures as a trustee, whether under a specified instrument of trust or otherwise ; and on such request being made, the board shall make such entries, in the register of debentures and in any debenture issued to such person, as the board may consider necessary for the purpose of complying with the request.
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(b) Where any request is made under paragraph (a) by a debenture holder or by a person to whom a debenture is to be transferred, the debenture shall be forwarded to the board at the time when such request is made.
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(3) Where any instrument of transfer of a debenture or any power of attorney or other document purporting to be executed by a debenture holder, who is described in the register of debentures as a trustee, is produced to the board, the board shall not be concerned to inquire whether the debenture holder is entitled in law to execute such instrument or other document or to give any such power ; and the board may act upon such instrument or power of attorney or document in like manner as though the debenture holder had not been described in the register as a trustee, whether or not he is so described in such instrument, power, or document and whether or not he purports to execute such instrument, power of attorney or document in his capacity as a trustee.
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(4) Nothing in subsection (2) or subsection (3)
shall, as between any trustees or as between any trustee
and any beneficiary, be deemed to authorize a trustee
to act otherwise than in accordance with the rules of
law applicable in the case of that trustee and the terms
of the instrument if any appointing him a trustee ; and
neither the Government of Ceylon, nor the bank, nor
any person holding or acquiring any interest in any debenture shall, by reason only of any entry in the register of debentures, or of anything in any debenture or in any document or instrument relating thereto, be affected with notice of any trust or the fiduciary character of any debenture holder or of any fiduciary obligation attaching to the holding of any debenture.
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(5) In this section, ” trustee ” includes the executor of the last will or the administrator of the estate of a deceased person, the curator of the property of a minor, the manager of the estate of a person of unsound mind and any person holding or intending to hold any debenture on behalf or for the benefit of any other person or body of persons.
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Purpose for which loans may be granted.
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51. The bank may make loans for any of the following purposes and such purposes only :-
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(a) the purchase or lease of agricultural land, its development, and improvement and the incurring of capital expenditure necessary for the preparation of its produce for the market;
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(b) any purpose incidental, accessary, or ancillary to any of the above purposes ;
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(c) the liquidation of debts already incurred for any of the above purposes ;
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(d) any other purpose which may be prescribed by rule made under section 94 :
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Provided that in making such loans the bank shall give preference to any person who applies for a loan for any of the purposes authorized in paragraphs (a), (b) and (c).
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Conditions on which loans may be granted.
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52.
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(1) Every loan granted by the bank shall be subject to the following conditions and limitations, namely : –
[ 8, 24 of 1938.]
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[ [ 5, 24 of 1939.]
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(a) the total amount on loan from the bank to any person at any one time shall not exceed the amount fixed by rules under section 94, and no loan shall be less than the sum of two thousand rupees ;
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(b) no loan shall be granted for a period less than five years or exceeding twenty-five years ;
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(c) no loan shall be granted unless its repayment is secured by a primary mortgage of immovable property in Ceylon, not being-
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(i) an undivided share in any property, or
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(ii) an interest under any lease, other than a lease from the Crown which is not due to expire within a period of thirty years from the date on which the loan is granted ;
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(d) no loan shall be granted until the mortgage referred to in paragraph (c) is executed substantially in the form of Schedule A or in any other form prescribed under section 92 and is duly registered ;
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[ 8, 24 of 1938.]
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[ [ 2, 31 of 1956.]
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(e) the amount of any loan which may be granted by the bank at any time on the security of any property, together with such amount, if any, as may at that time be outstanding in respect of any earlier loan on the security of the same property, shall not exceed three-fourths of the amount at which that property is valued at that time in accordance with the provisions of this Ordinance ;
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(f) no loan shall be granted at a rate of interest less than the minimum rate fixed by rule under section 94.
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(2) 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 Ordinance relating to loans, grant an additional loan the repayment of which shall be secured by a further mortgage of that property ; and such further mortgage shall, for the purposes of subsection (1) and of section 3, be deemed to be a primary mortgage.
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Requisites to be satisfied before loan is granted.
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53. No loan shall be granted unless the board shall have first satisfied itself-
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(a) that the security offered is adequate, regard being had to the market value of the property, to the annual income derived or likely to be derived from it in the future, to the possibility of its depreciation in the future and to the risks incidental to a forced sale ;
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(b) that the borrower has valid title to the property offered as security ;
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(c) that the purpose for which the loan is required is one contemplated by section 51; and
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(d) that there is no other good and valid reason why the loan should not be granted.
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Board’s power to grant loan.
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54. No loan shall be granted except by a resolution of the board :
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Provided that the board may under section 19 empower the manager to grant loans up to any sum not exceeding ten thousand rupees ;
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Provided further that no loan exceeding ten thousand rupees shall be granted by a resolution passed by the favourable votes of less than three directors.
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Withdrawal of the grant of a loan.
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55. 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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Priority of charge created by loan.
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56. Where a loan is granted by the bank, the property mortgaged as security for it shall from and after the 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 an earlier duly registered mortgage debt due to a creditor who in good faith advanced the money before the loan was granted by the bank.
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Board’s power to
investigate application of loan.
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57.
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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 to the purpose for which it was granted, and the person so called upon may adduce evidence before any director, 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 to the said purpose.
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Payments by half-yearly instalments.
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58.
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(1) Repayment of loans shall be made half-yearly by instalments or equated payments.
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(2) An instalment shall, consist of a fixed portion of the principal together with the interest due up to the date of payment.
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(3) An equated payment shall consist partly of principal and partly of interest calculated in accordance with the prescribed tables which specify as to every one hundred rupees of the loan-
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(a) the number of the instalments ;
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(b) the portion of each instalment which constitutes interest and the portion which is appropriated on account of principal ;
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(c) the balance of principal still owing after each instalment has been paid.
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59.
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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 the property given as security has depreciated in value to such an extent as to endanger the safety of the loan; or
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(b) that the title of the borrower is such that it ought not to have been accepted as adequate ; or
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(c) that owing to material misstatements 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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(d) in any case where the loan has been secured by a mortgage of the interest of the borrower under a lease from the Crown, that the Crown intends to cancel or otherwise determine the lease,
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the board shall, unless additional security which is adequate, in the opinion of the board, is offered in respect of that loan, issue an order requiring the loan to be repaid either in full or in part by a date to be specified in the order.
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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 (IV) of this Chapter shall apply accordingly.
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Anticipation of payments.
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60. The board shall accept any payment in respect of a loan before the date on which such payment is due, if notice of three months is given to the board of the intention to make such payment.
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61. 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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Procedure on default of payment.
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62.
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(1) Whenever default is made in the payment of any sum due on a 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, by special resolution published in the Gazette, authorize any person in writing to sell the property mortgaged as security for such payment by public auction at any time not less than twenty-one days after the date on which such resolution is published, in order to recover the whole of the unpaid portion of the loan and the interest due thereon up to the date of sale and the moneys and costs recoverable under section 63.
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(2)
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(a) Save as otherwise provided in paragraph (b), the provisions of subsection (1) 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 voluntary conveyance or by operation of law to any other person.
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(b) 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 that 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 subsection (1) shall not apply in the case of any default made by such borrower unless and until a person is appointed under this paragraph to represent the estate of such borrower.
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(3)
|
(a) Notice of every resolution under subsection (1) 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 the provisions of paragraphs (b) and (c) of section 105 (1), and, if that property consists of the interest of a lessee under a lease from the Crown, to the Land Commissioner.
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(b) 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-
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(i) despatched to the borrower if he is alive, and to every person to whom notice of any resolution is required to be despatched under paragraph (a);
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(ii) posted on or near the property which is to be sold; and
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(iii) affixed to the walls of the kachcheri and the several District Courts and Magistrates’ Courts , within the jurisdiction of which the property is situate.
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(4)
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(a) If the amount of the whole of the unpaid portion of the loan together with interest, including any penal interest due thereon, and of the moneys and costs, if any, recoverable by the board under section 63, 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 subsection (1) for the sale of that property.
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(b) If the amount of the instalment or equated payment in respect of which default has been made, together with any penal interest due thereon, and of the moneys and costs, if any, recoverable by the board under section 63 is tendered to the board at any time before the date fixed for the sale, the board 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 subsection (1) for the sale of that property,
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(5) 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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(6) 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 provisions of this section 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 subsection (1) authorize the sale of the property for the recovery of the total amount due to the bank in respect of both or all the loans, as the case may be, and the provisions of this part of this Chapter shall apply accordingly.
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(7) Nothing in this section 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.
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63. Besides the amount due on the loan, the board may recover from the debtor or any person acting on his behalf-
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(a) all moneys expended by the bank, in accordance with the covenants contained in the mortgage bond executed by the debtor, in the payment of premiums and other charges in respect of the 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 the mortgage bond executed by the debtor ; and
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(b) the costs of advertising the sale and of selling the property:
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Provided that the costs incurred under this paragraph shall not exceed such percentage of the loan as may be prescribed ; and
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(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 Crown, and such property has been surrendered to the Crown in accordance with the provisions of section 69, all moneys paid to the Crown by the board on such surrender as moneys due to the Crown by the debtor under the said lease.
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Payment of excess.
[ 9, 10 of 1947.]
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[ [ 11, 24 of 1938.]
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64. If the property is sold, the board shall, after deducting from the sale proceeds the amount due on the mortgage and the moneys and costs recoverable under section 63, pay the overplus, if any, either to the debtor or any person legally entitled to accept the payments due to the debtor, or into the District Court having jurisdiction over the property sold in case the board is in doubt as to whom the money is to be paid.
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65.
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(1) If the property is sold the board shall 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, nor shall any person claiming through or under any disposition whatsoever of the debtor’s right, title, or interest to and in the property made or registered subsequently to the mortgage of the property to the bank be able in any court of law 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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Such certificate shall be conclusive proof with respect to the sale of any property that all provisions of this Ordinance have been observed.
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(2) If the purchaser is some person other than the bank the certificate shall be substantially in the form in Schedule B, and if the purchaser is the bank the certificate shall be substantially in the form in Schedule C.
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(3) Every certificate of sale shall be liable to the stamp duty and charges fixed for conveyance of immovable property, and to any registration or other charges authorized by law, all of which shall be payable by the purchaser.
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(4) Where the property sold consists of the interest of a lessee under a lease from the Crown, 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.
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(5) Whenever the Land Commissioner refuses, under subsection (4), to approve any purchaser of the interest of a lessee under a lease from the Crown-
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(a) all sums paid to the bank by the purchaser in respect of the sale shall be repaid to him by the board ;
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(b) the costs of advertising and holding such sale shall be deemed to be costs recoverable by the board under section 63 (b) ; and
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(c) the property shall be resold in accordance with the provisions of this Ordinance.
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Order for delivery of
possession.
[ 9, 24 of 1939.]
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[ [ 9, 10 of 1947.]
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66.
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(1) The purchaser of any property sold in pursuance of the provisions of section 62 shall, upon application made to the District Court of Colombo or the District Court having jurisdiction over the place where the property is situate, and upon production of the Certificate of sale issued in respect of the property under section 65, be entitled to obtain an order for Delivery of possession of the property.
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(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 purposes 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 applications for, and proceedings connected with or incidental to, the execution of a decree of a District Court for the delivery of possession of a property of the same value as the property to which such application relates.
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(3) Where the land sold in pursuance of the provisions of section 62 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.
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(4) Where the property sold in pursuance of the provisions of section 62 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 English and in the Sinhalese or Tamil language, in some conspicuous place on the property, and proclaiming to the occupant by beat of tom-tom, or in such other mode as may be customary, 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.
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(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 section 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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67. If the property sold has been purchased on behalf of the bank the board may, at any time before it resells the property, cancel the sale by an endorsement to that effect on a certified copy of the certificate of sale, if the debtor or anyone on his behalf pays 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 nine per centum per annum. Such an endorsement shall, upon registration in the office of the Registrar of Lands, revest the said property in the proprietor as though the sale under this Ordinance had never been made.
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Resale by bank.
[ 9, 10 of 1947.]
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[ [ 11, 10 of 1947.]
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68. If the property so sold has been purchased on behalf of the bank, and the sale is not cancelled under section 67, 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 65, all the right, title, and interest which would have been acquired by a purchaser at the original sale. The endorsement which shall be liable to the same stamp duty and charges as a certificate to a purchaser at the original sale, shall when it is registered in the office of the Registrar of Lands vest such right, title, and interest as aforesaid in the purchaser.
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Limit of retention of property by the bank.
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69. If at any sale under section 62 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 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 :
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Provided that where such property consists of the interest of a lessee under a lease from the Crown, the board may, instead of reselling such property, pay all sums of money due to the Crown by the lessee under the lease and surrender the lease to the Crown on such terms and conditions as may be agreed upon between the board, the Minister of Finance [1] and the Minister charged with the subject of Crown lands.[1]
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70. In this Chapter, unless the context otherwise requires, ” property”, in any case where a loan is secured by a mortgage of the interest of a lessee under a lease from the Crown, means the right, title and interest of the lessee under the lease.
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Capital account and revenue
account.
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71.
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(1) The board shall keep two accounts of the funds of the bank, namely, the capital account and the revenue account. These two accounts shall be kept entirely separate and distinct.
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(2) All sums received by the bank shall be deposited in such other bank or banks in Colombo as the Minister[1] shall approve, sums on capital account being deposited in a bank account separate and distinct from a bank account in which sums are deposited on revenue account.
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(3) Except as hereinafter provided, no sum shall be transferred from or to revenue account to or from capital account and neither the bank account of sums in the capital account nor the bank account of sums in the revenue account shall be overdrawn.
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Payments into and out of capital account.
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72. Into the capital account shall be paid-
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(a) the proceeds of the sale of all debentures ;
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(b) all recoveries of the capital of loans ; and
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(c) moneys credited to reserve fund as hereinafter provided ;
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and from the capital account shall be paid-
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(a) all moneys paid in the redemption of debentures ;
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(b) all moneys loaned on mortgages ; and
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(c) moneys specially authorized to be transferred therefrom under this Ordinance.
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Limit to which capital account may be overdrawn.
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73. The capital account shall not be overdrawn to
the extent of a greater sum than is authorized by the Minister with the concurrence of the Minister of Finance[1] and the repayment of which is guaranteed by the Ceylon Government under the signature of the Minister of Finance. [1]
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Payments into and out of revenue account.
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74. Into the revenue account shall be paid-
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(a) all moneys received on account of interest on loans ;
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(b) all moneys received on account of fees, fines, and penalties, or which may otherwise become due to the bank but are not included within the purview of section 72 ;
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and out of the revenue account shall be paid-
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(a) all moneys expended in the issue and sale of debentures;
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(b) all interest due on debentures ;
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(c) all moneys paid on account of the working expenses of the bank ; and
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(d) all moneys paid on any account other than such as are contained within the purview of section 72.
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Limit to which revenue account may be overdrawn.
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75. The revenue account shall not be overdrawn to the extent of a greater sum than is authorized by the Minister with the concurrence of the Minister of Finance[1] and the repayment of which is guaranteed by the Ceylon Government under the signature of the Minister of Finance. [1]
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Transfers to reserve fund.
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76. Each half-year the board shall decide what sum shall be carried forward in the revenue account as a Provision against any possible shortfall in receipts in that account during the ensuing period of six months. Any balance to the credit of the revenue account over and above such sum shall be credited in the books of the bank to the reserve fund and shall be transferred to the capital account.
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Transfers from capital to revenue
account.
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77. Should the balance at any time available in the revenue account, including the undrawn portion of such overdraft as may have been authorized under section 75, be insufficient to meet any payments which must be made the board may transfer funds from the capital account to the revenue account provided such funds transferred shall never exceed the balance to the credit of the reserve fund in the books of the bank.
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Report of shortage to the Minister.
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78. Should the board at any time anticipate that the funds provided under the provisions of section 77 are likely to be insufficient to meet the liabilities and working expenses of the bank it shall immediately report such anticipated shortage to the Minister.[1]
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79. Upon such report the Minister with the concurrence of the Minister of Finance[1] may authorize a further overdraft upon the revenue account and direct the Minister of Finance[1] to sign and issue the necessary guarantee or may take such other action as to him may appear advisable.
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Reserve fund Low dealt
with.
|
80. Each half-year the board shall decide what portion of the reserve fund shall be carried forward in the capital account as a provision against any possible shortfall in receipts in that account during the ensuing six months. Any balance to the credit of the reserve fund over and above such sum may be invested outside the bank in such readily realizable securities as are from time to time authorized by the Minister with the concurrence of the Minister of Finance : [1]
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Provided that the board shall be free at any time to realize all or any of such securities and retransfer the proceeds to the capital account should it anticipate that such funds will be necessary to meet payments to be made from that account.
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Restriction on investment of reserve fund in mortgage loans.
|
81. Until the total to the credit of the reserve fund equals one-tenth of the total of the outstanding debentures no portion of the reserve fund shall be invested in mortgage loans except for such short period as may be necessary to raise money upon debentures to cover such loans.
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Utilization of reserve for acquisition of land and buildings for the use of the bank.
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82.
|
(1) The board may, with the prior approval of the Minister of Finance, utilize any portion of the amount to the credit of the reserve fund for the purpose of the acquisition, purchase or erection of suitable premises in which to carry on the business of the bank :
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Provided, however, that if the total for the time being to the credit of the reserve fund exceeds one-tenth of the total of the debentures outstanding, the approval of the Minister shall not be necessary to authorize the utilization for any such purpose of the excess or any part thereof.
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(2) Any securities in which moneys lying to the credit of the reserve fund have been invested may be realized by the board if the board deems it expedient to do so in order to enable the board to utilize any portion of that fund for any purpose mentioned in subsection (1) of this section.
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(3) Any premises acquired and purchased or erected by the board under subsection (1) of this section may subsequently be sold by the board with the prior approval of the Minister of Finance.
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Report of
shortage in the capital account to the Minister.
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83. Should the board at any time anticipate that the balance in the capital account, including the whole of the balance to the credit of the reserve fund and the undrawn portion of such overdraft as may have been authorized under section 73 is likely to be insufficient to meet payments which will have to be made from the said account it shall immediately report such anticipated shortage to the Minister.[1]
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84. Upon such report the Minister with the concurrence of the Minister of Finance[1] may-
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(a) authorize a further overdraft in the capital account guaranteed under the hand of the Minister of Finance,[1] or
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(b) authorize the Deputy Secretary to the Treasury[1] to lend to the bank out of the Consolidated Fund[1] any sum that may be necessary upon such terms as may be determined by the Minister of Finance[1] as to the mode and time of repayment of the sum so lent, and the interest payable thereon, or
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(c) take such other action as to him may appear advisable.
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Power to authorize loan to the bank.
|
85.
|
(1) The Minister with the concurrence of the Minister of Finance[1] may from time to time at the request of the board authorize the Deputy Secretary to the Treasury[1] to lend to the bank, for periods not exceeding one year out of the Consolidated Fund,[1] such sums as the Minister with the concurrence of the Minister of Finance[1] may deem necessary, upon such terms as may be determined by the Minister of Finance[1] as to the mode and time of repayment of any sum so lent and of the interest payable thereon.
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(2) The provisions of subsection (1) shall be in addition to and not in substitution of the provisions of section 84, and no report under section 83 shall be necessary in order to enable the Minister1 to exercise the powers conferred by that subsection.
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Keeping of books and
registers and safekeeping of securities.
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86. The books of the bank shall be kept, the debentures and mortgages shall be registered, and measures taken for the safekeeping of mortgages and other securities in accordance with the prescribed rules.
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Half-yearly
statement of accounts.
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87. The board shall cause the books of the bank to be balanced on every thirty-first day of March and every thirtieth day of September, and thereafter a statement in the prescribed form of the accounts of the bank as upon that date to be prepared and audited. Such statement shall be signed by the manager, the accountant, a majority of the directors, and the auditor, and shall be sent to the Minister[1] and published in the Gazette within four months of the said date.
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88. The accounts of the bank shall be audited in the prescribed manner by the Auditor-General or other person specially appointed for the purpose by the Minister with the concurrence of the Minister of Finance.[1]
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Auditor’s rights and duties.
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89. Every auditor shall be supplied with a copy of the half-yearly statement of accounts, and he shall examine it with the accounts and the documents relating thereto. He shall at all reasonable times have access to all books, registers, and documents kept by the bank. And he may in relation to such accounts examine any director or any officer of the bank.
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Auditor’s statement, report, and
certificate.
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90. The auditor shall examine the books, registers, and documents of the bank and shall forward to the board a statement of the accounts in the prescribed form, together with a report thereon and a certificate signed by him, showing-
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(a) whether the accounts contained a full and true account of everything which ought to be contained therein ; and
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(b) whether the books which by any rules made under this Ordinance are directed to be kept by the bank have been duly and regularly kept; and
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(c) whether the funds have been invested and securities have been kept in the manner prescribed by the Ordinance and any rules made thereunder ; and
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(d) whether all loans granted by the bank have been granted in accordance with the requirements of the Ordinance and rules made thereunder ; and
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(e) whether the instalments on the loans have been paid when they fell due and, if not, the extent of overdue instalments ; and
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(f) whether, in his opinion, the statement of accounts is a full and fair statement containing the prescribed particulars and is properly drawn up so as to exhibit a true and correct view of the state of the bank’s affairs, and in case he has called for any explanation or information from the board, whether It has been given and whether it is satisfactory ; and
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(g) whether the accounts are deficient, and whether the board or the officers of the bank have failed to comply with this Ordinance or the rules made thereunder.
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Auditor’s power to summon witnesses and call for documents.
|
91.
|
(1) Every auditor shall have the powers of a civil court under the Civil Procedure Code-
|
(a) to summon any person whose presence he may think necessary to attend him from time to time ; and
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(b) to examine any person on oath to be by him administered ; and
|
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(c) to issue a commission for the examination on interrogatories or otherwise of any person ; and
|
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(d) to summon any person to produce any document or thing, the production of which appears to be necessary for the purposes of such audit or examination.
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(2) Any person who when summoned refuses or. without reasonable cause, neglects to attend, or to produce any document or thing, or attends and refuses to be sworn or to be examined, shall be deemed to have committed an offence within the meaning of sections 172 and 173 of the Penal Code.
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Rules made
by the board.
|
92.
|
(1) The board may make rules not inconsistent with the provisions of this Ordinance for the following purposes : –
|
(a) prescribing the subordinate staff to be employed by the bank, their salaries, allowances, conditions of service, duties, rights, and privileges and any other matters connected therewith ;
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(b) prescribing the fees to be paid by applicants for loans in respect of the valuation of property offered as security, the examination of their title thereto, the preparation, perfection, and registration of mortgage bonds and any other matters, in respect of which services are performed by any persons acting for or in the employ of the bank in connexion with the consideration or granting of loans to the said applicants ;
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(c) prescribing the forms upon which and the manner in which applications shall be made for loans and any other matters connected therewith ;
|
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(d) prescribing the principles upon which the valuation of property offered or accepted as security is to be carried out ;
|
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(e) prescribing any forms to be used for the purpose of this Ordinance ;
|
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(f) for all other matters connected with the business of the bank for which the board may properly prescribe or for the information and guidance of the public dealing with the bank or of its own officers, employees, or agents.
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(2) All rules made under this section shall be entered in a special book kept for the purpose in the office of the board.
|
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(3) Copies of all rules under paragraph (a) of subsection (1) and such rules under paragraph (f) of subsection (1) as the board shall decide shall be kept in some place on the bank premises where they may be inspected by any officer, employee, or agent of the bank whom they may concern.
|
|
(4) All rules under paragraphs (b), (c), and (e) of subsection (1) and such rules under paragraph (f) of subsection (1) as the board shall decide shall be published in the Gazette for general information.
|
|
|
Rules made by the board with the approval of the Minister.
|
93.
|
(1) The board may, subject to the approval of the Minister given with the concurrence of the Minister of Finance,[1] make rules not inconsistent with the provisions of this Ordinance for the following purposes : –
|
(a) prescribing the powers and duties of the manager and assistant manager of the bank, their salaries and allowances and conditions of service and any other matters connected therewith ;
|
|
(b) prescribing scales of remuneration for the various services performed by valuators, inspectors, legal advisers, and agents employed by the bank and the scales of travelling charges which may be paid to such persons ;
|
|
(c) prescribing the scale of travelling allowances to be paid to the manager and assistant manager ;
|
|
(d) prescribing the forms of debentures and the procedure to be followed in their issue, registration, transfer, redemption, and cancellation ; providing for the issue of certificates representing given numbers of debentures, for the cancellation of such certificates and the issue of fresh certificates representing different numbers of debentures and for the replacement of debentures lost, destroyed, worn out, or defaced ; prescribing the fees to be charged in respect of any of the aforesaid operations and consistently with the provisions of this Ordinance for regulating in all matters not specifically dealt with in this Ordinance the manner in which debentures may be dealt with in respect of anything to be done by the bank or the purchasers, sellers, or holders of debentures ;
|
|
(e) prescribing the rates of penal interest, the cir-
cumstances in which the same shall be charged, and other matters connected therewith ;
|
|
(f) prescribing the costs that may be recovered under
section 63 ;
|
|
(g) prescribing the books, registers, and records to
be kept and the manner and form in which they are to be kept;
|
|
(h) prescribing the form of declaration to be made
under section 34 ;
|
|
(i) for establishing branch boards and defining their powers and the areas in respect of which they may act;
|
|
(j) for establishing agencies and providing for their management;
|
|
(k) prescribing the manner in which the accounts are to be audited ;
|
|
(l) prescribing the remuneration payable to agents
of the bank ;
|
|
(m) for providing for every other matter not herein specially provided for but necessary for the conduct of the business of the bank, the regulation of its funds and generally for fully and efficiently carrying out and giving effect to its objects and purposes and guarding against violation of this Ordinance.
|
|
|
(2) All rules made under this section shall be entered in a special book kept for the purpose in the office of
the board.
|
|
(3) Copies of all rules made under paragraphs (a), (b), (c), (g), (j), (l) of subsection (1), and such, rules under paragraph (m) of subsection (1), as the board with the approval of the Minister1 shall decide, shall be kept in some place on the bank premises where they may be inspected by any officer, employee, or agent of the bank whom they may concern.
|
|
(4) All rules made under paragraphs (d), (e), (f), (h), (i), (k) of subsection (1) and such rules under paragraph (m) of subsection (1), as the board with the approval of the Minister1 shall decide, shall be published in the Gazette.
|
|
|
Rules
made by the Minister.
|
94.
|
(1) The Minister with the concurrence of the Minister of Finance[1] may, after consulting the board, make rules not inconsistent with the provisions of this Ordinance for the following purposes : –
|
(a) prescribing the fees payable to auditors and the fees and travelling allowances payable to the directors and members of branch boards ;
|
|
(b) for regulating the meetings, proceedings, and business, of the board ;
|
[ 2, 11 of 1944.]
|
[ [ 2, 50 of 1949.]
|
|
(c) for regulating the institution and management of pensions and provident funds for, and the payment of gratuities to, the officers and servants of the bank, and for the payment of gratuities to the nominees and heirs of such officers and servants who die while in the service of the bank ;
|
|
(d) prescribing-
|
(i) the sum which the amount on loan to any person at any time may not exceed,
|
|
(ii) the minimum rate of the interest to be charged on loans and the additional purposes for which loans may be made under section 51 ;
|
|
|
(e) prescribing the terms and conditions on which loans may be made to societies registered under the Co-operative Societies Ordinance ;
|
|
|
(f) prescribing the terms and conditions on which loans may be made on the security of the interest of a lessee under a lease from the Crown and prescribing special rates of interest to be charged on such loans.
|
|
|
|
(2) The power to make rules under paragraph (c) of subsection (1) shall be deemed to include power to make a rule for the payment of a gratuity to any officer or servant of the bank who has retired from the service of the bank before the date on which such rule is made.
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(3) All rules made under this section shall be entered in a special book kept for the purpose in the office of
the board.
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(4) Copies of all rules made under this section shall be kept in some place on the bank premises where they may be inspected by any officer, employee, or agent of the bank whom they may concern.
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(5) All rules made under this section shall be laid, as soon as conveniently may be, on, the table of the Senate and the House of Representatives[1] at two successive meetings of the Senate and the House of Representatives,[1] and shall be brought before the Senate and the House of Representatives [1] at the next subsequent meeting held thereafter by a motion that the said rules shall not be disapproved ; and if upon the introduction of any such motion, or upon any adjournment thereof, the said rules are disapproved by the Senate or the House of Representatives,[1] such rules shall be deemed to be rescinded as from the date of such disapproval but without prejudice to anything already done thereunder ; and such rules if not so disapproved, shall continue to be of full force and effect. Every such disapproval shall be published in the Gazette.
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Liability as public servants of directors, members of branch boards, and employees.
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95. Every director, every member of a branch board, and all officers and servants of the bank, including agents, valuators, and inspectors shall, when acting in any such capacity, be deemed to be public servants within the meaning of the Penal Code.
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Forgery of debentures and interest coupons.
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96. Sections 21, 22, and 23 of the Ceylon Paper Currency Ordinance, 1884, * shall apply to debentures as if there were substituted in this section-
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(a) the word ” debenture ” for the words ” currency note ” or ” note ” ; and
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(b) the word ” directors ” for the word ” Commissioners “.
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False evidence.
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97.
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(1) Whoever, during any examination authorized by this Ordinance, 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.
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(2) Whoever makes a declaration required by this Ordinance 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.
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Liability of directors, members of branch boards, and valuators for participating in the sanctioning of certain loans.
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98.
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(1) A director or a member of a branch board who participates in the discussion on, or who votes upon, any resolution for the granting of a loan-
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(a) to a person who is a debtor or creditor of his or is in partnership with him or is in his employ ; or
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(b) on the security of any property in which he has a pecuniary interest,
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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.
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(2) A person who acts as valuator in respect of the application for a loan-
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(a) by a person to whom he stands in any of the relationships set out in subsection (1) ; or
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(b) on security in which he has a pecuniary interest, shall be liable to a fine of five hundred rupees.
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GOVERNMENT CONTROL AND MISCELLANEOUS
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Investigation by Minister.
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99. Once in every period of five years, and oftener
if he thinks it necessary, the Minister1 shall appoint some person, other than the auditor appointed under section 88, to investigate and report on the policy, general management and affairs of the bank, and in respect of such investigation any person so appointed shall for compelling the attendance of witnesses, the production of documents and the administering of oaths to persons he examines be entitled to exercise the powers conferred on a commission appointed under the Commissions of Inquiry Act.
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Minister’s powers in case of mismanagement.
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100.
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(1) If at any time it appears to the Minister[1]-
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(a) that the board has failed to comply with any duty imposed on it either by this Ordinance or rules thereunder; or
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(b) that the board is conducting the business of the bank in a manner that is likely to endanger the solvency, safety, or credit of the bank,
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the Minister[1] may take any of the following steps :-
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(i) by an order addressed to the board issue directions for the proper management of the bank and require compliance therewith within a time to be specified in the order ;
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(ii) appoint new directors to carry on the business of the bank ;
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(iii) direct the manager or any other person whom he may appoint to carry on the business of the bank ;
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(iv) appoint an officer or officers to inquire and report upon the constitution, working, and financial condition of the bank ;
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(v) make an order for the winding up of the bank ; or
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(vi) take any other steps which to him may appear necessary.
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(2) An officer or officers appointed under section 99 shall for the purpose of the inquiry have the same powers to require attendance of persons and the production of accounts and other documents as a District Judge has in relation to matters within his jurisdiction.
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Cost of proceedings.
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101. The remuneration to be paid to any person appointed under this Chapter and the cost of carrying out the order shall be defrayed out of the funds of the bank.
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Custody and affixing of common seal.
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102. The common seal of the bank shall be in the custody of the manager, and shall not be affixed to any instrument, except in the presence of the manager (or in his absence, of the assistant manager) and two directors, who shall sign their names to such instrument in token of their presence.
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Penal interest in case of default.
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103. Any mortgage bond to secure a loan by the bank may provide that if the borrower fails or neglects to pay on the due date the instalment and interest or to make the equated payment, as the case may be, then due in respect of the loan, then interest shall be payable on the loan in respect of the half-year for which default has been made at such rate in excess of that at which the loan has been granted as may be prescribed by the rules under section 93 (1) (e).
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Power to inspect valuation rolls of local rating authorities.
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104. The board 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 supply to the board full particulars as to any valuation of rateable property in respect of which such local authority has power to levy rates.
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Registered address and notices.
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105.
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(1) Every debenture holder and every person-
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(a) to whom a loan is granted by the bank; or
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(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 paragraph (b) of section 62 (2), been appointed to represent the estate of a deceased borrower; or
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(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,
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shall register with the bank an address to which all notices to him may be addressed.
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(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 Ordinance to be served upon such debenture holder or person :
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Provided, however, that in the case of any such failure on the part of any person who is a debenture holder or a 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 Ordinance 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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Loans to co-operative societies.
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106. In accordance with such terms and conditions
as the Minister[1] may in consultation with the board from time to time prescribe, the bank may notwithstanding anything to the contrary in this Ordinance make loans to any society registered under the Cooperative Societies Ordinance, whose object is the granting of long-term loans for purposes substantially the same as those specified in section 51.
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Date of establishment of bank.
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107. The bank shall be deemed to be established as from the 6th day of December, 1931.
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Directors first appointed.
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108.
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(1) The five directors first appointed shall retire one annually in any order that they may agree to or in the order that they may determine by drawing lots.
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(2) The vacancy caused by each successive retirement shall be filled by a new appointment by the Governor, the retiring director remaining eligible for reappointment, unless otherwise disqualified.
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(3) The date for retirement shall be the thirty-first day of December in every year, provided that the first retirement shall not occur earlier than one year after appointment.
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Schedules
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| Chapter 398, Volume No. 12 Page No.45. |
