KARNATAKA NON-AGRICULTURAL LOANS ACT, 1958
26 of 1958
December 25, 1958
An Act to provide for the grant of loans by Government for certain non-agricultural purposes and for the recovery of such loans. Whereas, it is expedient to provide for the grant of loans for certain non-agricultural purposes and for the recovery of such loans; Be it enacted by the Karnataka State Legislature in the Ninth Year of the Republic of India as follows.
Section 1 Short title and extent
(1) This Act may be called the Karnataka Non-agricultural Loans Act, 1958.
(2) It extends to the whole of the State of Karnataka.
Section 2 Purpose for which loans may be granted
Subject to such rules as may be made under Section 6, loans may be granted to any person under this Act, by such officers as may be prescribed, for erecting, rebuilding or repairing houses, for building or repairing boats or for the relief of distress: Provided that no loan for relief of distress shall be granted to any person to whom a loan for such purpose can be granted under 11. Substituted for the words "the Agriculturists Loans Act" by Act No. 17 of 1963. [the Karnataka Agriculturists Loans Act, 1963].
22. Explanation omitted by Act No. 17 of 1963 [Explanation : x x x x x]
Section 3 Period for repayment of loans
The loans granted under this Act shall be made payable in such manner and at such time as the State Government may prescribe by rules made under this Act.
Section 4 Security for loans
In respect of every loan granted under this Act, the borrower shall furnish such security as may be prescribed by rules.
Section 5 Recovery of loans
The loans granted under this Act, together with interest payable thereon, and costs, if any, incurred in making or recovering the same shall be recoverable at the discretion of the Deputy Commissioner in any one or more of the following modes, namely.
(a) from the borrower, as if they were arrears of land revenue due by him;
(b) from his surety, if any, as if they were arrears of land revenue due by him;
(c) out of the assets left by a deceased borrower or surety; or out of the property comprised in the collateral security, if any, according to the procedure for the realisation of land revenue by the sale of a defaulter's moveable or immoveable property other than the land on which that revenue is due;
(d) if the loan is for erecting, rebuilding or repairing a house, out of such house, as if it were arrears of land revenue due in respect of the land on which the house stands.
Section 6 Power to make rules
(1) The State Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for.
(a) the manner of making applications for loans;
(b) the officers by whom loans may be granted;
(c) the nature of the security, if any, to be taken for the due application and repayment of the money;
(d) the rate of interest at which and the conditions under which the loans may be granted and the manner and term of granting loans; and
(e) the instalments by which and the mode in which loans shall be repaid.
Section 7 Repeal and savings
The Bombay Non-Agriculturists Loans Act, 1928 (Bombay Act No. III of 1928), as in force in the Bombay Area is hereby repealed:
Provided that the provisions of S.6 of the Karnataka General Clauses Act, 1899, shall be applicable in respect of the repeal of the said enactment and Section 24 of the said Act shall be applicable as if the said enactment had been repealed and re-enacted.
RULE:
KARNATAKA NON-AGRICULTURAL LOANS RULES, 1963
In exercise of the powers conferred by Section 6 of the Karnataka Non-Agricultural Loans Act, 1958 (Karnataka Act 26 of 1958), the Government of Karnataka hereby makes the following rules, namely:
Rule 1 Title
These rules may be called the Karnataka Non-Agricultural Loans Rules, 1963.
Rule 2 Definitions
In these rules, unless the context otherwise requires.
(a) "Act" means the Karnataka Non-Agricultural Loans Act, 1958;
(b) "Form" means a form appended to these rules.
Rule 3 Purposes for which loans may be granted
Loans may be granted under these rules for non-agricultural purposes only, and in particular.
(1) for erecting, rebuilding or repairing houses of persons whose houses have been destroyed or damaged by 11. Substituted for the words "floods or other like calamities" by GSR 233, dated 5-8-1964 [flood, fire or other like calamities];
(2) for building or repairing boats;
(3) for construction of houses, to persons owning houses on lands which have been, or proposed to be acquired under the Land Acquisition Act, 1894, where possession of the land on which the houses are built is delivered to the State Government by the owners of the land whether before or after the award is made under the said Act;
(4) for the relief of distress to persons to whom a loan for relief of distress cannot be granted under the Agriculturists Loans Act.
Rule 4 Prohibition of utilisation of loan for purposes other than that for which it is granted
No loan granted under these rules shall be utilised for a purpose other than that for which it is granted.
Rule 5 Manner of making applications for loans
(1) Every application for a loan under these rules shall be presented to any Revenue Officer not below the rank of a Tahsildar.
(2) The application may be made in Form 1. When the security offered is land, extracts from the record of rights relating to such land shall be enclosed to the application.
(3) The officer granting the loan shall make such enquiries as he deems fit in order to verify the correctness of the facts stated in the application.
Rule6 Officers by whom loans may be granted
22. Sub-rule (1) substituted by GSR 31, dated 23-1-1964 (1) The officers mentioned in column (1) of the following Table may grant loans not exceeding the amounts specified in the corresponding entry of column (2) thereof, namely.
(1)Divisional Commissioner Ten thousand rupees in all cases other than those falling under clause (3) of Rule 3. Deputy Commissioner, Additional Deputy Commissioner (Harbour and Railways), South Kanara. Ten thousand rupees in cases falling under clause (3) of Rule 3 and two thousand rupees in all other cases. Assistant Commissioner, Special Land Acquisition Officer (Port), South Kanara. Five hundred rupees. Additional Special Land Acquisition Officer (Port), South Kanara. Tahsildar Two hundred rupees. Sheristedar specially authorised by the Government. Two hundred rupees.]
(2) Loans exceeding ten thousand rupees may be granted with the previous sanction of the State Government.
Rule7 Manner and time for repayment of loan, etc.
(1) All loans granted under these rules shall be repayable in not more than ten annual installments. The minimum amount of an annual instalment shall be Rs. 10.
(2) Penal interest shall be charged on the amount of any installment remaining unpaid after the date fixed for its payment.
Rule8 Security to be furnished by the borrower, etc.
(1) Save as otherwise directed by the State Government, no loan shall be granted unless the officer granting the loan is satisfied as to the sufficiency of the security, after allowing for a margin of safety. If a loan is to be granted to a tenant, who is not the owner of the land on which the house is erected the tenant's house upon which the money will be spent should be his security and the owner of the land should guarantee the repayment of the loan. If a loan is to be advanced for a non-agriculturist, the borrower should execute a deed of mortgage in Form 2 mortgaging his house as security for the repayment of the loan with two solvent sureties, guaranteeing the repayment of the loan.
(2) Notwithstanding anything contained in sub-rule (1) of Rule 7 in the case of a loan for the purpose specified in clause (3) of Rule 3 and in which possession of the land on which the house is built is delivered to the State Government by the owner of the land before the award is made under the Land Acquisition Act, a loan not exceeding seventy-five per cent of the probable amount of compensation to be awarded under the Land Acquisition Act in respect of the land, may be paid to the owner of such land:-
Provided that no such loan shall be granted except where the owner of such land has executed a bond in Form 3 agreeing to repay to the State Government the loan with interest due thereon, out of the amount payable to him as compensation under the award and has furnished a letter of authorisation and addressed to the Land Acquisition Officer competent to make the award agreeing for the deduction out of the sum payable to him as compensation under the award such sum due to the Government towards the repayment of such loan together with interest due on such loan as may be intimated to the Land Acquisition Officer at the time of the payment of the compensation by the officer granting the loan together with such other collateral security as the person is required to offer.
Rule9 Security and forms thereof
(1) Movable property shall not be accepted as security except under the special orders of the State Government. Personal security may be accepted only when the officer granting the loan is satisfied that the person to whom the loan is granted is solvent to the extent that the loan to be granted to him as loan will be recovered from him.
(2) At the time of or before the issue of the loan or the first installment of it, a deed of mortgage in Form 2 shall be executed by the applicant and sureties if any in token that they have understood and agreed to the conditions contained therein.
(3) In the case of a Hindu Joint Family, the bond shall be signed by the Manager of the joint family on behalf of the family and by all other major members of the family and also by the guardians of the minor members.
(4) In the case of a joint application by several persons for an advance to be taken jointly and severally under a bond, a bond in Form 4 shall be executed by such persons at the time of or before the issue of the loan or the first installment thereof.
(5) Notwithstanding anything contained in sub-rules (2), (3) and (4), in cases where in the opinion of the Deputy Commissioner it is not possible for the applicant or his sureties to execute a bond for the repayment of the loan under this rule at the time of or before the issue of tike loan or any installment thereof, the loan or such installment may be paid to the applicant on his agreeing, whenever required by the Deputy Commissioner, to execute a bond in Form 2 or Form 4 as the case may be, or in such other form as the Government may, by general or special order direct.
Rule10 Rate of interest and recovery thereof
11. Substituted for the words "floods or other like calamities" by GSR 233, dated 5-8-1964
(1) Interest at eight and half per cent per annum shall be charged on loans granted under the Act;
(2) Penal interest at ten per cent per annum shall be charged upon all overdue instalments of interest or principal and interest;
(3) Notwithstanding anything contained in sub-rules (1) and (2), the amount recovered as interest at any one time shall not exceed the principal.]
Rule11 Procedure on failure of the borrower
The officer granting the loan, if at any time satisfied that a borrower has failed to comply with any of the conditions of the loan.
(a) shall, if the failure appears to be due to misapplication of the loan; and
(b) may, if the failure is due to any other cause, after recording in writing the grounds of his decision forthwith proceed to recover under the provisions of S.5 of the Karnataka Non-Agricultural Loans Act, 1958 any sum still remaining unpaid by such persons.
Rule12 Form of accounts
The accounts of all loans granted under these rules shall be kept in Forms 5 and 6.
APPENDIX 1 FORM
FORM 1
[See Rule 5]
Form of Applications
I.
Applicant's name and residence.
II.
Amount and object of loan.
III.
Applicant's rights in the land on which his house stands.
IV.
Nature of security whether personal or otherwise.
Date
Applicant's signature.
APPENDIX 2 FORM
FORM 2
[See Rule 8]
Mortgage Bond
This indenture made
the...day of...one thousand nine hundred And....between...of...(hereinafter
referred to as "the mortgagor" Which expression shall where the context
so admits be deemed to include his heirs, executors, administrators and
assigns) of the one part, and the Governor of Karnataka (hereinafter referred
to as "the mortgage" which expression shall where the context so
admits be deemed to include his successors in office and assigns) of the other
part;
Whereas, the mortgagor is
possessed of and entitled free from encumbrances
To the property hereinafter mentioned;
And whereas, the mortgagor has in pursuance of the
provisions of the Karnataka Non-Agriculturists' Loans Act, 1958, and the rules
made thereunder requested the mortgage to grant him a loan of
Rupees................... (Rs....);
And whereas, the mortgage
has agreed to grant the said loan to the mortgagor on condition that the
mortgagor shall execute a mortgage of the following property that is to
say...............(here give particulars of the property
to be mortgaged) free from encumbrances as security
for the said loan of Rupees..........(Rs......) and on the terms and conditions
hereinafter mentioned;
Now this indenture
witnessed, that in pursuance of the said agreement and in consideration of the
said loan of Rupees........(Rs.....) (hereinafter referred to as "the said loan") paid by the mortgage to
the mortgagor (the receipt whereof the mortgagor
hereby acknowledges) the mortgagor Government with the mortgage as follows.
(1) That the mortgagor
shall apply the said loan only the purpose for which it is granted;
(2) That the work/object
for the purpose of which the said loan is granted shall be completed/carried
out by the mortgagor before the day of........or the subsequent date to which
an extension of time may be granted by the;
(the officer should be specified)
(3) That the mortgagor
shall repay to the mortgage the said loan of Rupees.......(Rs......) within the
period of ten years from the date of the execution of these presents by equal
monthly installments of Rupees (Rs.....) the minimum installment payable being ten rupees (Rs. 10/-) in a year each
on the......day of each month beginning with the day of......next month with Interest
at the rate of...per cent per annum commencing from the........And if the said
loan or any part thereof shall Remain unpaid after the said period of ten years
the mortgagor will thereafter pay to the mortgagee interest for the same or so
much thereof as shall for the time being remain unpaid at the rate of;
(4) That the mortgagor
hereby conveys and transfers unto the mortgage ......... (Here state full
particulars of the property being mortgaged, with its area, dimensions, survey
or municipal number and boundaries) (Hereinafter referred to as "the said
premises") together with all
rights, easements and appurtenances belonging to the same TO HOLD the said
premises unto the mortgagee as security for the due repayment of the said loan
together with interest at the rate hereinbefore mentioned and, so far as may
be, for the due performance of all the covenants and conditions of this
mortgage subject to the proviso for redemption hereinafter contained:
Provided always that if
the mortgagor shall repay to the mortgagee all the moneys payable under this
mortgage in the manner herein provided the mortgagee shall at the request and
cost of the mortgagor execute and do all such deeds and acts as may be
necessary for reconveying the said premises to the mortgagor or as he may
require;
(5) That the mortgagor
shall pay interest at the rate of......on the said loan on the.......day of
each month in every year;
(6) That the mortgagor hereby
covenants with the mortgagee that the mortgagor now has good right to convey
and transfer the said premises hereby conveyed and transferred unto the
mortgagee subject to the following encumbrances, namely................
(7) That the mortgagor at
the request at any time hereafter of.the mortgagee will at his own cost execute
all such assurances as may be necessary or proper for more effectually evicting
the said premises in the mortgage in manner aforesaid;
(8) That the mortgagor
shall take all reasonable care of the said premises and shall not permit the
same to be destroyed or injured or to deteriorate in a greater degree than they
would deteriorate by reasonable wear and tear thereof and shall whenever the
said premises are injured or deteriorated, forthwith repair and make good the
same;
(9) that if there shall
be any breach by the mortgagor of the covenants or conditions on his part herein contained, or if he shall die at
any time before all sums payable to the mortgage on the security of this deed
including interest at the rate specified shall have been fully paid off, then
the whole of the amounts for the time being outstanding against the mortgagor
shall be immediately recoverable
notwithstanding that the period fixed for repayment has not elapsed
and it shall
be lawful for
the mortgage to enter upon and take possession of the said premises and to sell and assign the same or any part
thereof or to let the same for any term or period and to do all such acts for
effecting any such sale or letting as the mortgage shall think fit; and the
receipt of the mortgage for the purchase money of the said premises or any part
thereof shall effectively discharge the purchaser or purchasers there from; and
any deficiency in price qr loss which may result from such sale and all
expenses attending the same, and all interest charges due under this agreement
to the date of such sale shall be made good by the mortgagor and shall be
recoverable as if they were arrears of Land Revenue due by them to the mortgage;
(10) That the mortgagor
shall bear and discharge all local and municipal Rates, taxes, assessments,
duties and other charges and any Judi and any land revenue levied under the
Land Revenue Code, which may at any time during the continuance of this
mortgage be or become due or payable in respect of the same premises and in
case any such rate, tax, assessment, duty, charge, Judi or land revenue is
required to be paid by the mortgage. The amount so paid by him shall be added
to the balance of the said loan then remaining unpaid and shall be a charge on
the said premises;
(11) That the mortgagor
shall permit the mortgage, his agents and servants at all reasonable times to
enter upon and inspect the said premises;
(12) That the mortgagor
shall not remove any of the fixtures in or upon the said premises except for
the purpose of substituting others of a like nature without obtaining the
previous consent of the mortgage;
(13) That no charge
created or transfer made by the mortgagor of the said premises or any part
thereof during the continuance of this security shall have effect unless the
mortgage shall consent thereto in writing; and
(14) That all the costs
and expenses incidental to the preparation, execution and registration of this
deed except the stamp duty livable in respect of this deed for the payment of
which the mortgage hereby undertakes the liability shall be borne by the
mortgagor.
In witness whereof, the
parties hereto have here unto set their hands and seal the day and the year
first above written.
Signed by the said
Mortgagor
in the presence of
First witness:
Address:
Occupation:
Second Witness:
Address:
Occupation:
Signed, sealed and
delivered on behalf of and under the direction of the Governor of Karnataka in
the presence of (person authorised under Article 299 of the Constitution of
India should sign)].
1.
2.
Sureties.
We .................. and
....................... of.................hereby declare ourselves sureties
for the above said.................that he shall do all that he has above
undertaken to do and in case of his making any default therein we bind
ourselves, our heirs, executors, administrators and assigns, jointly and
severally to forfeit to the Governor of
Karnataka the sum of Rupees............. (Rs...........................)
Including interest at the rate stipulated in which the abovesaid has bound
himself or such smaller sum as shall be deemed sufficient by the Governor of
Karnataka to recover any loss or damage which the Government may sustain by
reason of such default and that such sum shall be recoverable as an arrear of
land revenue due from us to the Governor of Karnataka. And in consideration of
the said loan of Rupees (Rs................) advanced to the above
mentioned.................and as security for the due repayment of the same
we...............and.............of...............hereby mortgage to the
Governor of Karnataka the lands specified in the margin to which we are absolutely
entitled (free from encumbrances) and agree that in the event of the said
default in repaying the said loan in the manner aforesaid the Governor of
Karnataka shall be at liberty to cause the said lands to be sold and the
proceeds to be applied in payment of the amount recoverable from us hereunder.
Signed and delivered by and in the presence of
(1)
(2)
APPENDIX 3 FORM
FORM 3
[See Rule 8(2)]
This
bond is executed on ........................ day of ................. by
.............. (Hereinafter called the borrower) in favor of the Governor of
Karnataka (hereinafter called the Governor) and the borrower holds and firmly
binds himself unto the Governor in the sum of Rupees....................with
interest thereon at..................per cent per annum to be paid to the
Government of Karnataka (hereinafter called the Government), their successors or
assigns or their certain attorney or attorneys for which payment well and truly
to be made the borrower binds himself, his heirs, executors, administrators and
legal representatives jointly and severally, under the terms and conditions hereinafter mentioned:
1. That the said borrower has borrowed a sum
of Rs. . . .from the Government today promising to repay the sum with interest
at . . . . Percent per annum under the Karnataka Non-Agricultural Loans Rules,
1963 (hereinafter referred to as the said rules) to the Government.
2. That in consideration of the said advance
made by the Government to the said
borrower, the said borrower hereby guarantees the repayment of the aforesaid
loan or any part thereof remaining
Unpaid and for such purpose, the said Borrower hypothecates the
properties mentioned in the Schedule annexed to this Bond and also authorizes
the Government to deduct in full the loan amount of Rs................... with
interest accrued unto the date of such deduction, from the amount of
compensation payable to the borrower under the Land Acquisition Act, 1894
(Central Act I of 1894)
Being
the amount of the award for the acquisition of the land belonging to the said
borrower and binds himself, his heirs,
executors, administrators, legal
representatives and assigns, to repay the said loan out of the said
properties and also out of the said amount of compensation and in case of any
balance still remaining unpaid to the Government, the said Borrower shall be personally responsible for
satisfying the dues of the Government.
Witnesses Borrower (1) (2)
APPENDIX 4 FORM
FORM 4
[See Rule 9(4)]
1.Whereas,
the persons mentioned in column (2) of Form 5 hereto as in the taluka of and
district of. . . .Have applied for a loan under the Karnataka
Non-Agriculturists' Loans Act, 1958. (Order granting a joint loan under the Karnataka
Non-Agriculturists' Loans Act.)
2. And whereas, the
Borrowers (or some, or one of the Borrowers) has/have previously been granted a
loan/loan under the said Act and the amount now outstanding on account of the
said Loan(s) is as detailed in column (3) of Form 5.
3. And the Borrowers have
agreed to be jointly and severally liable for the said previous and present loans.
the repayment of
with interest at the the loan
now granted them rate of... .in fixed installments of............
4. This order witnesses,
that a loan of the total amount of Rupees...........
(Rs.........................................) is hereby granted to the
Borrowers (b) (with the consent of the persons mentioned in column (8) of the
said form as to the property specified in the corresponding entry in column (7)
of the said form each of the said persons having signed his name in column (8)
of the said form in token of his consent) (b) at simple interest of...per cent,
per annum For the purposes respectively specified in column (6) of the said
Form (Appendix).
5. Repayable, with
interest as herein stipulated and the costs of granting the present loan (a)
together with the principal, interest and costs outstanding on the said
previous loan(s) (a) in fixed installments of the amounts and on the dates
mentioned in the margin, such installments to be credited to interest and
principal in such proportion and amount as shall from time to time be fixed by
the Revenue authorities subject to the control of Government until the whole of
the dues outstanding shall have been repaid (Provided
That any further interest, simple or penal which
may be chargeable for delay in payment in accordance with the rules under the
said Act shall be recoverable in addition to the said fixed installments).
Details of installments SI. No. Date Amount Remarks
(a) - (a) Cancel where there are none.
(b) -(b) Cancel where all the borrowers have the
right to make the improvement.
6. This loan shall be
paid to the Borrowers on production of a Certified copy of this Order at the
Treasury at...............in the amounts specified in respect of each Borrower
and on the dates and in the installments mentioned in column (10) of the said Form.
7. This loan is granted
subject to the provisions of the said Act and the rules for the time being in
force hereunder and to the following conditions, namely.
(1) As to the repayment of the aggregate principal
amount of the loan now granted, each of the Borrowers is as among the Borrowers
Themselves liable for and bound to contribute the
amount specified in column (4) of the said form.
(2) As to the payment of the aggregate installments
hereinafter mentioned,
Which are inclusive of principal, interest and
costs of the loan now granted (and previous loans outstanding) each of the
Borrowers is as among the Borrowers themselves liable for and bound to
contribute (subject to condition 7) the amount specified in Column (5) of the
said form in respect of each borrower and such amounts shall (subject to
condition (6) be payable on the dates hereinbefore mentioned for the payment of
each aggregate.
(3) All the Borrowers are nevertheless jointly and
severally liable for and bound to repay to Government the total amount of the
loan now granted with interest and costs (together with total amount
outstanding on the previous loans hereinbefore referred to with interest and
cost), and the total amount so payable shall (subject to conditions 6 and 7) be
payable in the aggregate in the installments and on the dates hereinbefore
specified.
8. In default of the due
of service by any of the Borrowers of any of the foregoing conditions, or if
any installment is not fully paid within one month of the date fixed for its
payment, the whole of the amounts outstanding against the Borrowers may be
recovered immediately from the Borrowers
jointly and severally notwithstanding that the period fixed
for repayment has not elapsed.
We, the persons who have signed our names in column
(11) of the said Form 5 hereby agree to all the terms and conditions of the
above written order and to the particulars specified in the said Form 5 and
accept the same as correct and our signature hereunder made witness this our agreement
and acceptance.
And we, further agree that when
any disbursement has been made to any of us, the signature or thumb impression
of the recipient if made or recorded in Form 6 hereunder written shall be
evidence of his having duly received such disbursement to the amount therein
specified.
APPENDIX 5 FORM
FORM 5
[See Rule 12]
Serial No. Name and Account No. of borrowers Detailed Balances of previous loans still recovered Portion present loan for Repayment of which the Borrowers are respectively Liable as between themselves Constituted installments (including principal, interest and costs of previous and present loans) for which the borrowers are respectively liable as between themselves Date Amount Rate of Interest Principal Interest No. Amount of each. (1) (2) (3) (4) (5)
Purpose for which The present loans Granted Details of property for the benefit of which the loan is granted Signature of persons having the right to execute the work or carry out the object whose consent is hereby given to the loaner Details land in occupation of Borrowers be @ S.No. Area Assessment Remarks S.No. Area Assessment (6) (7) (8) (9)
Instalments in which the loan is to be disbursed 1st 2nd 3rd Signature or thumb impression of borrower Remark Amount Date Amount Date Amount Date (10) (11) (12) |
