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) |
