MINISTRY OF SHIPPING AND TRANSPORT

(Transport Wing)

NOTIFICATION

New Delhi, ihe 3rd February, 1981

G.S.R. 44(E).—In exercise of the powers conferred

section 19 of the Merchant Shipping Act, 1958 (44 of 1958)

lead with section 21 of the General Clauses Act, 1897 (10

of 1897), the Central Government makes the following rules,

nasnely :—

1. Short title, application and commencement.—(1) These

rules mjy be called the Shipping Development Fund (Loans

and Oiler Financial Assistance) Rules, 1981.

(2) I hey shall apply to loans and financial assistance to

fishing companies for the acquisition and maintenance of

tiawlers.

(3) They shall come into force on the date of their publi-

cation in the Official Gazette.

2. Definitions.—In these rules, unless the context otherwise

leq"!!^ —

(a) "Act" means the Merchant Shipping Act, 1958 (44

of 1958) ;

(b) 'Application" means an

application made

under

jule 3 ;

Ui) " ( Qirrpitiee" means the Shipping Development Fund

Committee ;

fe) 'fishing company"' means a company formed and

registered under the Companies Act, 1956 (1 of 1956)

and having sea fishing as its main object ;

(f) "Fund"' means the Shipping Development Fund ;

(g) "Nominee Directoi" means the director nominated

by the Committee on the Board of Director of

fishing company in the private sector ;

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(i)]

(h) "Secretary" means the Sccictary to the CommiUce

and includes any Additional,

Joint, Deputy

and

Assistant Secretary ;

(i) "trawler"' means a fishing vessel and includes a purse-

seiner, long

liner and

a combination vessel for

multipurpose fishing, having, in each case, an overall

length of not less than twenty metres'.

3. Application foi loan or other

financial assistance-—•

(1) A fishing company desirous o[ ia:sing a loan or obtaining

other financial assistance from the Fund for the acquisition

uud maintenance of trawlers shall apply to such officer as

the Cential Government in the Dcpaitment of Agriculture

may, by notification in the Official Gazette, authorise in this

behalf (hereinaflcr referred to as the Authorised Officer).

(2) Ifverv application referred to in sub-iule (i) shall be

made in such form as is specified

Part 'A' of the form

of application set out in Ihc Appendix to these rules, and

every such applicalion shall be accompanied by an attested

copy of the i evolution of the fishinu company authorising

the raising of the lonn or obtaining other financial assistance.

4. Scrutiny of application.—-The Authorised Officer shall

scrutinise every application leceived by him and after such

scrutiny, the Central

Government in the

Department of

Agriculture shall, after making necessary entries in Part B

of the form of application, forward it to the Secretary.

5. Consideration by the Committee.—The Secretary

shall

then place the application before the Committee for consi-

deration at its next meeting, or in case of urgency, at a meet-

ing specially convened for the purpose with the approval of

the Chairman.

fi. Decision of the Committee to bz recorded.—The decision

of the Committee on each application, shall be recorded in

wriling in the form of minutes, duly approved by the Chair-

man.

7. Loan exceeding Rs. 100 lakhs to be made with

the

prior npptovnl of Cential Government.—The Committee shall

not gr;mt any loan or other financial assistance exceeding

Rs. 100 lone hundred) lakhs in value except with the prior

approval of the Central Government in the Ministiy of Shipp-

ing and Transport.

8. Terms of loan or other financial assistance,—(1) Every

loan or other financial assistance granted under these rules

shall be on Ihe terms and ronditions specified from time to

time by Ihe Central Government in pursuance of sub-section

(2) of section 16 of the Act.

(2) No loan or other financial assistance shall be granted

to a fishing company unless such

company has furnished

secuiity to the satisfaction of the Committee.

9. Communication of decision.—The Secretary shall com-

municate to the fishing company and to the Central Govern-

ment in the Department of Agriculture tho decision on the

application and the terms and. conditions under which the

loan or other financial assistance has been granted to lie

fishing company.

10. Acceptance loan oi other financial assistance and execu-

tion of loan documents—(11 If the terms and conditions of

the lo n or other financial assistance are acceptable to the

fishing company, it shall arrange to have a resolution, passed

at a meeting of the Board of dircctois, or.wfcre necessary,

the re olution of the company in general meeting, authorising

the raising of Ihe loan or obtaining other financial assistance

on the teims and conditions, specified by the Central Govern-

ment, and also authorise an officer of the fishing company

to execute, on behalf of the fishing company, the documents

specified in sub-rule (5), and to affix the common seal of

the company on such documents,

(2) The resolution referred to in sub-rule (1) shall specify

the assets, which are proposed to be offered as security for

the loan or other financial assistance, as the case may be,

or the other securities which are proposed to be offered for

the purpose aforesaid, and that the terms and conditions

.specified by the Central Government arc acceptable to the

Company.

(3) It shall be the duly of the Secretary to get the docu-

ments, specified in sub-rule (5), executed by or on behalf

of the fishing company.

(4) No loan or other fimuicial assistance shall be released

to a fishing company unless a deed moitgaging the trawlers/

vessel has been duly executed by or on behalf pi the fishing

company, or such other security as is acceptable to the Com-

iniUee has been duly furnished, to the satisfaction of

the

Committee and the fishing company has —

(a) rcgistcied such mortgage with the Registrar of the

Companies us required by the Companies Act, 1956

(1 of 1956) and in the case of mortgage of any

ether assets offered as secuiity by the company it

has been registered by other authorities where re-

quired by law so to do, and thereafter also registered

with the Registiai of Companies as aforesaid ;

(b) taken out piopcr insmancc policies in respect of

the trawlers or any other assets of the company

offocd as secuiity to the Committee and duly assig-

ned such in nuance policies to the Committee ;

the Registrar of Ships.

5. The documents referred to in sub-rule (2) are —

(a) the loan agreement,

(b) mortgage deed in respect of the trawlers mortgaged

as secuiity,

mortgage

deed,

(d) in the case of bank guaiantce or any other form of

secuiity approved by the Committee, the relevant

documents to be executed in that connection,

(e) tripartite agreement to be executed between shipyard,

fishing company and SDFC.

(f) any other documents which in the opinion of the

Committee is considered necessary and essential to

safeguard the interests of the Committee.

11. Payment of [ oan Amount.— \fter all foimalities referred

to in rule 10 have been complied with by the borrowing fish-

ing company, the secretary shall draw a cheque in favour

of the company for the amount of loan, or, where the Com-

mittee intends to give a guarantee for the due payment of

the duei of the fishing comnany in relation to the acquisi-

tion and maintenance of. trawlers, the Secretary shall draw up

the deed, or letter of guarantee and get it executed by or on

'.'duK of the Committee, and where the amount is to be

paid in instalments, the Secretary shall draw the cheques in

favoui of fishing company on the due

dates and

for the

appropriate amount of such instalments.

12. Payment of Loan.—(1) The borrowing fishing company

shall repay the amount of the loan and the interest thereon

in accordance with the terms and conditions of the loan,

under intimation to the Department of. Agriculture ;

(2) The Depattment of Agriculture and, where the borrow-

ing fMiini; company is a company which is not owned or

controlled" by Government, also the Nominee Director shall

keep a watch,—

(a) on the repayment of the loan and shall bring any

default b\' (he horroiving fishing company to

the

notice of the Secretary who sh;ill immediately make

a report to the Committee for such action as

tho

Committee may consider necessary ;

fh) generally on the affairs of the borrowing fishing com-

p.ny and shall immediately bi ing to the notice of

the Secretary any happenings or development which

may affect the creditworthiness of the borrowing

fishing company or the sca-woithincss of (he traw-

lers mortgaged to the Committee.

[F. No. SW/MSD(70)/79-MD]

A. PADMANABAN, Jt. Secy.

APPENDIX

(See rule 3, 4, and 6j

FORM OF APPLICATION

PART A

APPLICATION FOR LOAN OR OTHER FIANANCIAL

ASSISTANCE

1. Name and address of the applicant with date of

incorpoi ation :

2. Authorised Capital of the fishing Company :

3. Debt Equity Ratio :

4. Tv>ued, subscribed and paid-up capital as certified

by the company auditor or as per last balance

sheet ;

5. Does the applicant satisfy the requirements of

section 21 of the Merchant Shipping Act, 1958

(Give details to elucidate the answer) In case

of company, names of Directors and their tech-

nical qualifications :

6. Number and total

G.R.T. of

vesseKs)

owned bv

the applicant and its/their insured value and

also ils/their market value :

7. In the case of companies in existence for three

years or more copies ol balance sheet and pro-

fits and loss accounts for the last three years

(indicating working results assets liabilities and

dividends if any, declared) may be furnished.

In the case of others necessary information to

(he extent available may be furnished

8. Surplus fundi available as on

(a) Last Balance Sheet date.

(i) Current assets.

(ii) Loans and advances.

(iii) Investments.

(iv) Unfinished

Voyages/anticipa'tcd

earnings/

still to be recovered,

(v) Other current Assets, if any, (details may

please be furnished)

Total (I)

Less investment and other current assets, if any, tied up

us security or otherwise not mobilizable (Details may be

furnished).

(b) :

(i) Current Liabilities,

(ii) Provisions,

(iii) Unfinished

voyages /advance earnings.

(iv) Other current

liabilities,

any, (furnish

details).

Total (II)

(e) Net total

(l-ln-III

(d) Add : Generation of resources during the current

financial year.

(i) Depreciation on existing fleet,

(ii) Net sutplus on existing fleet (after provid-

ing for interest charges), including Non-

Operating earnings'.

year, separately for each.

(ii) Operating surplus on above separately for

each trawler if indicate details of

calcula-

tions of fi) and fii) above).

(f) Loans guarantee assistance earlier taken from

Shipping Development

Fund

Committce/Go-

vernmcnt/Other institutions (Give details).

{g) Other Capital Receipts; if any (give details).

Total IV

(h) Total III and IV-(V)

(1) Deduct out RO :

(i) Gross payment to Shipyard/Financing

Institu-

tions on existing fleet.

(ii) Gioss payment us above on trawlers delive-

red during the year (give details).

(iii) Repayment of principal to Shbping Deve-

lopment

Fund

Committee/Government/

other financing institutions on :

(a) Loans already sanctioned.

(b) Loans /guarantee applied for (iiive details),

details).

(M Payment of interest to :

(a) Shipping

Development

Fund

Committee/

Goveinment/other financing institutions.

(b) To Shipyard or trawler delivered

during

the

ycir (un'css the interest charges have already

been taken into account in arriving at New

Surplus).

(v) Dividend.

(vi) Other Capital out-go, if any, like Taz etc.

ToU <VT)

(b) To Shipyard or trawler delivered during the

(kl (Deduct) working capital requirement (Basis of

assessment may be given).

Total VIII

Note : In future years, only the increase on this account

If any, is to be provided for.

Reasons for pro-

posing the increase should be explained.

(1) Net Surplus Resources available us on (the end of

the cur:cr.t financial ycai) (i.e. VII-V1II)

Note ; Similar statement should be prepared for the next

four years.

(j) Net Surplus available (i.e. V-VI)-VII

ties upon the end of the assessment year pre-

ceding the date of application of loan.

(ii) Provision made to meet such liabilities and

particulars thereof.

(iii) The actual annual assessment for income-

tax and other taxes as against details given in

(i) above.

(iv) Whether any pioceedings were taken or are

pending against the applicant for recovciy of

taxes ? If so, furnish full details.

10. Particulars of loan(s) if any, already granted to

the applicant by Government of India/Shipping

Development Fund Committee.

(i) Amount/s of loan/s, date of grant and rate

of interest.

(ii) Trawlers against which the loan/s was/ were

granted.

(iii) Repaynicnt(s)

commended or to

commence

fiom which date and to be made in how

many instalments.

(iv) Whether there has heen in the past any de-

fault in the payment of instalment of other

principal or interest and, if so, on how many

occasions and for what reasons.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(i)]

(v) What action, ii" any, was taken by the lending

authority in connection with the default refer-

red to above,

fvl) Outstanding balance of Government/Shipping

Development Hind

Committee loan(s) and

also other loan(') if any,

11. (i) Whether there has been any default in the

compliance of any o[ the terms of the loan

agreements and other loan documents in res-

pect of loans mentioned in item 10 rind, if

so. on how many occasions and for

what

leasons.

(ii) Whether the applicant has been subject to puni-

tive action by other

Ministries/Dcpaitments

of Government and, if so, the particulars

thereof and ihc itiiOns

(htM-foi.

Full de-

l.iils should be furnishsd.

12. d) Trailers now proposed to be

acquired or

built.

(iil Area in which the trawlers to be acquired or

built will be operated.

(iii) Cost ol tiLwleia.

(iv) Amount of loan or other financial assistance

now jequired from the fund.

13. What security, in addition to the morlgage of

the loan trawler, is the company prepared to

officer, if so, required by the Shipping Develop-

ment Fund Committee and pending the build-

ing of the loan trawler, what ir.lerim security

is proposed to be furnished ?

14. If the trawler(s) in the existing conditions, and

is/are proposed to be purchased second-hand,

if the applicant is satisllcd that the trawler(s)

is/are (a) in good condition (b) the price is rea-

sonable (c) suitable for the trade for which in-

tended ? Copies of any reports etc. received

by the Company regarding (a) may be furnished.

15. What dorinrent.ily proof the applicant furnishes

in support of the actual cost of acquisition or

building of the trawlers.

16. Whether the applicant is aware of the terms on

whioh the loans aic

usually granted by the

Shipping Dcvolop-ncnt Fund Committee and, jf

so, whether the company is prepared to accept

them in entity : or, if not. in what respect the

company dcires :no lification of these terms and

for what reasoas ?

17. (i) Anticipated working results in future, and

(ii) Whether such results fulJy establish the possi-

bility of the applicant lepaying the loan with-

in the period of amortisation with any diffi-

culty.

To be signed by the applicant or his

authorised representative.

PART B

CIo b- fllied by the Department of Agiiculturc in the Ministry

i't VijiiLukurc and Inigution, Government of India).

1. Is thj Department of Agriculture satisfied that the

particular furnished abo\e by the applicant arc

i-orre;t to (he extent that they can be verified 7

2. In particular, docs the apnli.ant satisfy the require-

ments of • ection 21 of the Merchant Shipping Act,

1958 (44 of 195K) 7

3. Is the Department pf Agriculture generally satisfied

after mating such consultation as they deem neces-

sary from iheir Technical Officers and Director of

Fisheiies of the State concerned, that the fishing

ve M"I(S) proposed to be purchased ot built is/are

good for the pi ice proposed tq be paid and is/arc

suitable for the trade(s) in which it is intended to

be put ?

4. Docs the Department of Agriculture recommend the

jirunt of loan app'icd for by the fishing company ?

Are they satisfied that there is a reasonable pros-

pect of the applicant being able to repay the loan

within the period of amortisation and ihe security

o.'.cred by the company incI.Hng the interim

secu-

lily is good and sufficient ?

5. (i) Whether the Department of

Agriculture, while

i ecommending the grant of loan, has taken into

consideration the liquid cash resources of the

applicant

available

with

and reserves

built by it 7 If so, do they still recommend the

full loan applied for and, if so, for what reasons 7

(ii) Whether the applicant has committed any default

in the compliance of the terms of the loan docu-

ments in respect of loans already granted cither

by Government of Inuia or the committee, and, if

so, on how many occasions and for what reasons

and with what results ?

(iii) Has the Department of Agriculture come across

nny adveise icmnrks from other departments of

the Government or other sources in the activities

of the applicant, and if so, details thereof may

be given. In (he light of these adverse remarks,

do thev 'till recommend the loan applied for and

.f to on what precise grounds ?

6 In ense the applicant de\ires any modifications of the

usual terms to what extent docs the Department of

Agriculture recommend them and on what precise

giounds ?

7, Has the Department of Agricultuie any special com-

ments to olfor on the proposal 7

Department of Agriculture

Ministry of Afiiiculturc and Irrigation,

PRINTTD BY THE MANAGER, GOVT. OF INDIA PRESS, RINtj ROAD, NEW DELHI-110064

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELIII-110054, 1981