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REGISTERED No. D (D.N.)-72

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 21] NEW DELHI, THURSDAY, FEBRUARY 16, 1984/MAGHA 27. 1905 Separate Paging is given to this Part in order that it may be filed as a separate compilation

1432 GI/83

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MINISTRY OF FOOD AND CIVIL SUPPLIES

(Department of Civil Supplies)

NOTIFICATION

New Delhi, the 13th February, 1984

No. O-1701l|5|82-GOP.—The Govern- ment of India notified in their notification No. O-170tl|3|78-GOP dated 26th March, 1979, the

continuance of the scheme of Central Government Guarantee as the fourth phase for a period from 1-4-1979 to 31-3-1984, to enable the Consumer Cooperatives and other cooperative institutions specified therein, to secure working capital loans from banking agencies on reduced margins. It has now been decided by the Government of India to continue the operation of the scheme for a further period of one year from 1-4-198*. to 31-3-1985 to be co-terminus with Sixth Plan period on the same terms and conditions.

II. In the case of guarantee during the extend- ed period i.e. from 1-4-1984 to 31-3-1985 a fresh deed of guarantee has to be entered into in the form given in the Annexure.

All the eligible banks may avail themselves of the facility provided by the Central Government.

S. V. M. TRIPATHI, Jt Secy.

ANNEXURE

DEED OF GUARANTEE

This deed of Guarantee entered into on the--

between the President of India (hereinafter called "the Surety") of the one part and the - —— -a bank constituted and functioning under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970|State Bank of India constituted under the State Bank of India Act, 1955— — - . . . . (Name of the Bank), a subsidiary Bank as defin- ed in the State Bank of India (Subsidiary Banks) Act, 1959|a Cooperative Society registered under— — •—and having its - .. - — — -Office at—

(hereinafter called "chj Bank") of the other part witnessth as follows :—

In consideration of the Bank, making loans and

advances to- — <• — — (hereinafter called the Society) at the latter's re- quest, after relaxing margins which the Bank but for this guarantee might have normally kept, the Surety hereby guarantees to the Bank to the ex- tent hereinafter provided the repayment of Joans and advances by the society to the Bank subject to their terms and conditions hereinafter mention- ed .:—

J. The Surety's guarantee will be available only in, respect of any secured loan or advance granted for specific period,; to the society with the prior approval in writing of the Surety by the Bank before the 1st April, 1985 against ' the pledge or hypothecation of goods, which would include book debts, securities, investments and other movable properly. The Bank agrees to keep a margin of only 10 per cent against such loans and advances.

2. The Surety's liability in respect Of any' lean or advance granted as above to the said society shall not at any time exceed ;—

(i) twenty-five per cent of the amount' of the guaranteed loans and advances actuall} outstandiag on the books of the Bank against the society on the date on which the notice of demand on the Surety is issued by the Bank in accordance with the provisions of the clause (3) here- of :—

OR

(ij) Rs. . —lakhs only which-

ever amount is less.

3. The Bank may invoke the Surety's guarantee at any time before the 1st of April, 1985 in the

manner hereinafter specified, namely :—

(i) The Bank shall, first issue a notice of demand on the society to pay the amount due to it on account of the loans and advances granted to it by the Bank and guaranteed by the Surety, within thirty days of the date on which the notice asking for such repayment is served by the Bank. A copy of such notice should be endorsed to the Surety simultaneously.

(ii) if on the sxpiry of the period of 30 days, as aforesaid, the society does not make payment of the loans and advances grant- ed to it by the Bank and guaranteed by the Surety, the Bank shall issue a notice of demand or the Surety.

(iii) The Bank shall while invoking Surety's

guarantee, furnish to the Surety :—-

(i) details of the goods, against which loan or advance in respect of which the guarantee is invoked has been grant- ed.

' (ii) the market value of the said goods, and

(iii) the amounts outstanding against the

society as at :—

(a) the date on which the notice asking for repayment was issued to the Society by the Bank; and

(b) the expiry of thirty days of the date of notice asking for repayment; and

(iv) The Surety shall reimburse to the bank the amount due to it to the extent pro- vided in this guarantee within a period of 90 days from the date of reoeipt by the Surety of the Bank's notice iavokinc the guarantee and claiming payment.

4. The guarantee herein contained shall be en- forceable against the Surety notwithstanding that any securities that the Bank may obtain from the Society shall be outstanding or unrealised.

5. The society shall enter into an agreement with the President of India in the form annexed in the First Schedule to the deed of Guarantee, undertaking :—

(a) to pay the dues of the Bank regularly and promptly in accordance with the condi- tions laid down by the Bank while sanc- tioning the loan, advance or cash credit;

(b) to carry on the business of the society deligently with a view to making profit;

(c) guaranteeing to the Central Government repayment of all monies that may be re- covered by the Bank from the Central Government on account of any default on the part of the society to make pay- ment to the Bank, on demand without demur;

(d) to implement a system of regular veri- fication of stocks, followed by prompt assessment of shortages, fixation of res- ponsibility therefor and recovery of their value from those responsible;

(e) to exercise strict caution in the extension of credit facilities to societies, institu- tions and individuals, combined with measures for systematic and prompt re- covery ;

(f) to ensure preparation of quarterly trading and orofit & loss accounts and balance sheet as on the last day of each quarter, together with preparation of a quarterly manaeement report on the Society's working and submit a copy of it to the Surety every quarter;

(g) to keep the properties and assets of the society free from encumbrances and attachments except those in favour of the Bank and in respect of which the Government has given guarantee to the Bank or those in favour of StatelCentral Governments; and

[

fh) to provide all facilities to the Surety on any person or persons nominated by it in this behalf to examine its accounts and its working;

The Bank shall not make any payment to the Society unless the agreement in the proforma in the Rrst Schedule and the later of Consent as m the Second Schedule to the Deed of Guarantee are furnished to it duly executed by the parties. 1432 GI/83—2

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6. The bank shall agree, in consideration of the guarantee which is available to it from the Surety:—

(a) to pay or credit to the account of the Surety any amount which will be realis- ed from the society after the date on which the Surety has reimbursed the amount guaranteed, after it has realised in full the loans and advances guaranteed by the Surety;

(b) to retain all the promissory notes or un- realised securities which may be avail- able to the Bank in respect of the loan granted by it to the Society even after realisation by it in full of the outstand- ings due to it, till the amount reimbursed by the Surety is' realised ;

(c) to obtain from the Society and to furnish to the Surety, a letter of consent in the from provided in the Second Schedule hereto;

(d) if so required by the Surety, to transfer all such promissory notes or securities to the Surety, and)or his nominee, after the Bank has realised in full the outstanding due to it, but if the Surety has not been reimbursed the amount paid by it; and

(e) to obtain from the Society and furnish to the Surety an agreement in the form provided in the First Schedule to the Deed of Guarantee annexed hereto, as provided in the Clause 5 hereto.

7. The Surety's guarantee will not extend to the interest on the loans and advances sanctioned to the society.

8. The obligations of the Bank in pursuance of the provisions of clause (6) shall continue until such time as the amount reimbursed by the Surety has been paid or credited to the Surety, or until the Surety has agreed to adjust the said amount against any other amount due to be paid by it to the Bank or to the Society or to waive the recovery of the amount.

9. The Surety's guarantee shall not be invoke on more than one occasion by the Bank in respect of the society and if or after the Surety's guarantee has been invoked, any loan or advance is granted to the society on whose behalf any amount has been paid to the Bank by the Surety, any such loan or advance shall be at the Bank's own risk and the Surety will have no liability on account of such further loan or advance.

10. No loan or advance granted for the first time on or after the 1st April, 1985, and no increase in the amount outstanding in respect of any loan or advance subsisting on the 31st March, 1985 will be guaranteed by the Surety. The Surety's

liability shall become determined at the close of business on the 31st March, 1985.

11. The Surety shall be entitled to obain from the Bank such information and returns relating to the loans and advances, in respect of which this guarantee is available to the Bank and the Bank shall furnish such information or return at such intervals and in such manner as may be specified

or required by the Surety.

12. If there is any difference or dispute between the parties hereto, arising ouUof or in connection with this agreement or concerning the meaning or interpretation thereof or otherwise how- soever in relation to this agreement, the same shall be referred to the sole arbitration of the person holding for the time being the post of Addi- tional Legal Adviser (Arbitration) to the Govern- ment of India and decision of the said officer shall be final and binding on both the parties. It will be no objection that the arbitrator is a Government servant, that he had to deal with the matters to which this guarantee relates or that, in course of his duties as a Government servant, he has expres- sed views on all or any of the matters in dispute or difference. The provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof shall apply to such arbitration. The arbi- tration proceedings shall be held at such place as the Arbitrator may decide. The Arbitrator shall be entitled with the consent of the parties, to ex- tend from time to time, the time for making the award.

13. The Stamp duty, if any, payable on this Deed of Guarantee shall be borne by the President of India.

14. In witness whereof the Surety and the Bank have caused these presents to be duly executed the day and year above mentioned.

Signature of the Officer Incharge (Guarantee and,Operations) In the Government of India, in the Ministry dealing in Consumer Coop, acting in the premises for and on behalf of the President of India.

In the presence of :—

Witness (1) ( 2)

POINTED BY THE MANAGER, GOVT. OF IHMA PRESS, RING ROAD, NEW DELHI-110O64

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI-110054. 1984