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INDIAN SECURITIES ACT, 1920

Ministry of Law and Justice

Act nº 10 of 1920


  • Act nº 10 of 1920

Preamble

THE INDIAN SECURITIES ACT, 1920

[Act, No.10 of 1920]

[AS ON 1957]

[11th March, 1920]

PREAMBLE

An Act to consolidate and amend the law relating to Government securities.

WHEREAS it is expedient to consolidate and amend the law relating to Government securities; It is hereby enacted as follows:-

Section 1. Short title extent and commencement

(1) This Act may be called the Indian Securities Act, 1920;

(2) It extends.[This Act ceased to apply with effect from the 1st May, 1946, to certain Government securities and other matters, see the Public Dept.Act, 1944 (18 of 1944), section 29] to the whole of India except [The words " including British Baluchistan" Omitted by the A.O.1948]; and [Substituted by the Adaptation of Laws (No.3) Order, 1956, for" Part BStates".] [the territories which, immediately before the 1st November, 1956, where comprised in Part BStates]

(3) It shall come into force on the first day of April, 1920.

Section 2. Definitions

In this Act, unless there is anything repugnant in the subject or context,-

(a) " Government security" means promissory notes(including treasury bills), stock-certificates, bearer bonds and all other securities issued [Substituted by by the Adaptation of Laws (No.3) Order, 1956, for "by the Central Government or by the Government of any Part A State"] [by the Central Government at any time or by the Government of any part A State before the 1st November, 1956, or by a State Government on or after that date] in respect of any loan contracted either before or after the passing of this Act, but does not include a currency- note ; and

(b) "Prescribed" means prescribed by rules made under this Act;

[Inserted by the A.O.1937 ][(c)"the Government " or "Government "in relation to any loan or security, means the Government raising the loan or issuing the security.]

Section 3. Notice of trust not receivable save as provided

(1) Save as otherwise provided in or under this Act, no notice of any trust in respect of any Government security shall be receivable by the Government.Notice of trust not receivable save as provided.

(2) The Government shall not be deemed to have received notice any trust by reason only of the fact that it has recognized an indorsement on a Government security by an executor or administrator as such, nor shall it inquire into the terms of any will by which such executor or administrator may be bound, but on being satisfied of the due appointed of such executor or administrator it shall be entitled to treat his as the full owner of any Government security belonging to the estate of the person whom he represents.Right of survivors of joint or several payees of Government securities.

Section 4. Right of survivors of joint or several payees of Government securities

(1) Notwithstanding anything in section 45 of the Indian Contract Act, 1872, (9 of 1872)--

(a) when a Government security is payable is payable to two or more persons jointly and either or any of them dies, the security shall be payable to the survivor or survivors of those persons, and

(b) when a Government security is payable to two or more persons severally and either or any of them dies, the security shall be payable to the survivor or survivors of those persons or to the representative of the deceased, or to any of them.

(2) This section shall apply whether such death occurred or occurs before or after this Act come into force.

(3) Nothing herein contained shall affect any claim which any representative of a deceased person may have against the survivor or survivors under or in respect of any security to which sub-section (1) applies.

[Inserted By Act 2 of 1928, section 2 ][(4) For the purpose of this section, a body incorporated under the Indian Companies Act, 1913, [See now the Companies Act, 1956 (1 0f 1956).] (7 of 1913.) or the Co-operative Societies Act, 1912, (2 of 1912.) or any other enactment for the time being in force whether within or without[ Subs.By the A.O.1950, for "the Provinces".] [India], relating to the incorporation of associations of individuals, shall be deemed to die when it is dissolved.]

Section 5. Indorsements to be made on security itself

Notwithstanding anything in section 15 of the Negotiable Instruments Act, 1881, (26 of 1881.) no indorsement of a Government promissory not shall be valid unless made by the signature of the holder inscribed on the back of the security itself.

Section 6. Holding of Government securities by holders of public offices

(1) In the case of any public office to which the [Substituted By the A.O.1937, for "G.G.in C.".][Government] may.by notification in the Official Gazette, declare this sub-section to apply, a Government security may be made or indorsed payable to or to the order of the holder of the office by the name of the office.

(2) When a Government security is made or indorsed as aforesaid, it shall be deemed to be transferred without any or further indorsement from each holder of the office to the succeeding holder of the office on and from the date on which the latter takes charge of the office.

(3) When the holder of the office indorses to a third party a Government security made or indorses as aforesaid, he shall subscribe the indorsement with his name and the name of the office.

(4) A writing on a Government security now or heretofore standing in the name of the holder of a public office, whereby the security has been or was made or indorsed payable to or to the order of the holder of the office by the name of the office, shall not be deemed to be or to have been invalid by reason only of the security having been so made or indorsed.

(5) This section applies as well to an office of which there are two or more joint holders as to an office of which there is a single holder.

Section 7. Issue of securities to ruler of States in India

Notwithstanding anything in the Negotiable Instruments Act, 1881, (26 of 1881.) the [Substituted by the A.O.1937 for " G.G.in C."] [Government] may in respect of any loan, issue to the rulers of any [Substituted by the A.O.1948 for ' State in India".] [[The words "Acceding State other" omitted by the A.O.1950] Indian State] Government securities in such form and subject to such conditions as to negotiability, succession and other matters as may be prescribed.

Section 8. Indorser of Government security not liable for amount thereof

Notwithstanding anything in the Negotiable Instruments Act, 1881, (26 of 1881.) a person shall not, by reason only of his having indorsed a Government security, be liable to pay any money due, either as principal or as interest, thereunder.

Section 9. Impression of signature on Government securities

(1) The signature of the person authorised to sign Government securities on behalf of the Government may be printed, engraved or lithographed, or impressed by such other mechanical process a the [Substituted by the A.O.1937 for " G.G.in C."] [Government] may direct on the securities.Impression of signature on Government securities.

(2) A signature so printed, engraved, lithographed or otherwise impressed shall be as valid as if it had been inscribed in the proper handwriting of the person so authorised.

Section 10. Issue of duplicate securities

(1) When a Government security is alleged to have been lost, [Inserted By Act 21 of 1927, section 2] [Stolen] or destroyed either wholly or in part, and a person claims to be the person to whom but for the loss, [Inserted By Act 21 of 1927, section 2] [theft] or destruction it would be payable, he may, on application to the prescribed [Substituted By Act 28 of 1937, section 2, for "officer".] [authority], and on producing proof to [Substituted By section 2 ibid., for "his".][its] satisfaction of the loss, [Inserted By Act 21 of 1927, section 2] [theft] or destruction and of the justice of the claim and on payment of the prescribed fee, if any, obtain from [Substituted By section 2, ibid., for " him ".][it] an order for

(a) the payment of interest in respect of the security said to be lost, 1434 [stolen] or destroyed pending the issue of a duplicate security; and

(b) the issue of a duplicate security payable to the applicant.

(2) An order shall not be passed under sub-section (1) until after the issue of the prescribed notification of the loss, [Inserted By Act 21 of 1927, section 2]] [theft] or destruction

(3) A list of the securities in respect of which an order is passed under after sub-section (1) shall be published in the prescribed manner.

[Inserted By Act 21 of 1927, section 2] [(4) If at any time before the Government becomes discharged under the provisions of this Act from liability in respect of any security the whole of which is alleged to have been lost, stolen or destroyed, such security is found, any order passed in respect thereof under this section shall be cancelled.]

Section 11. Renewal of bearer bonds

The holder of a bearer bond or other Government security payable to bearer, May on to the prescribed [Substituted By Act 28 of 1937, section 3, for " officer ".] [authority], on delivery of the bearer bond or other security, and on payment of the prescribed fee, if any, obtain from such [Substituted By Act 28 of 1937, section 3, for " officer ".] [authority] a renewed bearer bond or other security, as the case may be.

Section 12. Renewal of promissory notes

Subject to the provisions of section 13, a person claiming to be entitled to a Government promissory not, may, on applying to the prescribed{Substituted By section 4 By Act 28 of 1937, for "officer ".] [authority] and on satisfying Substituted By section 4 Act 28 of 1937 for " him ".][it] of the justice of his claim and delivering the promissory note receipted in the prescribed manner, and paying the prescribe fee.if any, obtain, from such [Substituted By Act 28 of 1937, section 4 for " officer".] [authority] a renewed promissory note payable to him:

Provided that, when application is made for the renewal of a Government promissory note which appears to the prescribed [Substituted By Act 28 of 1937, section 4 for " officer".] [authority] to stand in the name of a deceased member of a Hindu undivided family governed by the Mitakshara law, a renewed promissory note shall not be issued to the applicant unless he furnishes a certificate signed by such authority and after such inquiry as may be prescribed to the effect that the deceased belonged to a Hindu undivided family governed by the Mitakshara law, that the promissory note formed part of the joint property of the family, and that the applicant is the managing or sole surviving male member of the family.

Explanation.-- The expression " Hindu undivided family governed by the Mitakshara law" Shall, for the purpose of this section, be deemed to include a Malabar taruad.

Section 13. Renewal of promissory notes in case of dispute as to title

(1) Where there is a dispute as to the title to a Government promissory note in respect of which an application for renewal has been made, the prescribed {Substituted By section 5, Act 28 of 1937, for " officer ".}[authority] may.-Renewal of promissory notes in case of dispute as to titles.

(a) where any party to the dispute has obtained a final decision from a Court of competent jurisdiction declaring him to be entitled to such note, issue a renewed note in note in favour of such party, or

(b) refuse to renew the note until such a decision has been obtained, or

(c) after such inquiry as is hereinafter provided and consideration of the result thereof declare by order in writing which of the parties is in [Substituted By section 5, Act 28 of 1937, for "his ".][its] opinion entitled to such note and may, after the expiration of three months from the date of such declaration, issue a renewed note in favour of such party in accordance with the provisions of section 12, unless within that period [Substituted By section 5, Act 28 of 1937, for "he".] [it] has received notice that proceedings have been instituted by any person in a Court of competent jurisdiction for the purpose of establishing a title to such note.

Explanation.- For the purpose of this sub-section the expression "final decision" means a decision which is not appealable or a decision which is appealable but against which no appeal has been filed within the period of limitation allowed by law.

(2) For purpose of the inquiry referred to in sub-section (1), the prescribed [Substituted by Act 28 of 1937, section 5, for "officer"] may [Subs.by section 5, Act 28 of 1937, for "himself"].[direct one of its officers to] record, or may request the District Magistrate to record or to have recorded, the whole or any part of such evidence as the parties may produce, when such request has been made to the District any Magistrate of, such Magistrate may himself record or may direct any Magistrate of the second-class subordinate to and empowered by general or special order of the [Substituted by the A.O.1937, for "L.G."] [Government ] in this behalf, to this behalf, to record the evidence, and shall forward a copy thereof to the prescribed[Substituted by Act 28 of 1937, section 5, for "officer"] [authority].

Explanation.-For the purposes of this sub-section, the District Magistrate means the District Magistrate having jurisdiction in the place were interest on the promissory note is payable and where interest is payable at a president-town, the Chief Presidency Magistrate [The words " or at a place in a Part BState, the Political Agent" omitted by the adaptation of Laws (No.3.) Order, 1956]

(3) [Substituted by Act 28 of 1937, 5, for " The prescribed Officer"] [The officer of the prescribed authority] or any Magistrate acting under this section may, if he thinks fit, record evidence on oath.

Section 14. Renewal of other securities

Government securities other than those mentioned in sections 11 and 12 may be renewed in such circumstances and in such manner as may be prescribed.