AGRICULTURAL AND INDUSTRIAL CREDIT CORPORATION

(1) A corporation to be called the Agricultural and Industrial Credit Corporation of Ceylon is hereby established.

(2) The Agricultural and Industrial Credit Corporation of Ceylon shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name. It shall, subject to the provisions of this Ordinance, be capable of acquiring, holding and alienating property, movable and immovable, and of doing and performing all such acts and things as bodies corporate may do and perform.

(1) The head office of the corporation shall be at Colombo.

(2) Such branch offices of the corporation as the board may consider necessary may be established at places in Ceylon other than Colombo.

. (1) The persons for the time being lawfully discharging the functions of the Minister, the Minister of Agriculture and Food and the Minister of Industries and Fisheries shall ex officio be members of the board of directors of the corporation.

(2) The Minister[3] may nominate not more than five other persons (hereinafter referred to as ” the nominated directors “) to be members of the board, in addition to the ex officio members, and may at any time remove any nominated director from office.

(1) The chairman of the board shall be elected by , the members of the board from amongst their number.

(2) The members of the board may, if they think necessary, elect from amongst their number a deputy chairman.

(3) The chairman of the board shall preside at every meeting of the board at which he is present.

(4) In the absence of the chairman, the deputy chairman shall preside at meetings of the board ; and, in the absence of both the chairman and the deputy chairman, a director chosen by the majority of the directors present, shall preside at any meeting of the board.

(1) A meeting of the board shall be held as often as the chairman may deem necessary :

Provided that a meeting shall be held at least once in every month.

(2) The chairman shall upon a written requisition from any two directors call a special meeting. No such special meeting shall be held unless at least four days’ notice specifying the time of such meeting and the purpose for which it is to be held has been given by notice in writing to every director.

(1) The board shall cause minutes to be made, in books provided for the purpose, of the proceedings of every meeting of the board.

(2) The minutes of the proceedings of any meeting, if signed by the director presiding at that meeting or at the next succeeding meeting, shall be prima facie evidence of the proceedings of the meeting to which the minutes relate.

(1) A resolution signed by all the directors of the corporation for the time being shall be as valid and effectual as if it had been passed at a meeting of the board.

(2) Every such resolution shall be recorded in the minutes book containing the proceedings of the board as if it had been passed at a meeting of the board.

(a) he is a British subject and has been resident in Ceylon, whether continuously or otherwise, for a period or periods amounting in all to not less than five years out of the ten years immediately preceding the date of his nomination ;

(b) being a member of the House of Representatives1 he shall resign therefrom within one month of being nominated a director ;

(c) being a whole-time salaried officer of the Government, he shall resign from such post within one month of being nominated a director.

(a) accepts or holds any office or place of profit under the corporation ;

(b) becomes bankrupt or is adjudicated insolvent or compounds with his creditors ;

(c) becomes of unsound mind or is adjudged to be of unsound mind ;

(d) is convicted of an offence and sentenced to imprisonment ;

(e) is absent from meetings of the board for more than three consecutive months without the leave of the board ;

(1)[8] Subject as hereinafter provided, any officer of Government may, by name or by office, be authorized in writing by any Minister referred to in section 7 (1) either generally to attend all meetings of the board, or specially to attend any particular meeting of the board, on his behalf :

Provided that the same officer of Government shall not attend any such meeting on behalf of more than one such Minister.

(2) Any officer authorized under subsection (1) shall, at any meeting which he is authorized to attend on behalf of any Minister referred to in section 7 (1),[6] be entitled to exercise the same privileges and rights as that Minister.[6]

(1) If at any time a nominated director dies or vacates his office, the Minister[3] may nominate another person in place of the director so dying or vacating his office.

(2) The director so nominated shall hold office for the remainder of the period of office of the director in whose place he has been nominated and no longer, but shall be eligible for renomination.

(1) Sums not exceeding thirty million rupees in the aggregate may, at the request of the board and with the approval of the Minister of Finance,1 be advanced to the corporation out of the Consolidated Fund.1 In addition to the aforesaid sums, any sums voted for the purpose by Parliament may be advanced to the corporation out of the Consolidated Fund for carrying on and transacting the business specified in paragraph (n) of section 51 (1). All such sums shall be advanced on such terms and conditions as to the rate and payment of interest and the time and manner of repayment, as the Cabinet of Ministers may determine.

(2) The Deputy Secretary to the Treasury[1] is hereby authorized and empowered to pay or cause to be paid any sum required to be advanced under this section to the corporation out of the Consolidated Fund.[1]

(1) Such sums, not exceeding fifty thousand rupees in the aggregate, as may be required for the purpose of defraying the preliminary costs and expenses of the corporation may, at the request of the board, be granted to the corporation out of the Consolidated Fund.[1]

(2) The Deputy Secretary to the Treasury[1] is hereby authorized and empowered to pay or cause to be paid any sum required under this section to be granted to the corporation out of the Consolidated Fund.[1]

(1) Subject to the provisions of section 26, the board may from time to time raise by means of debentures such sums, not exceeding fifty million rupees in the aggregate, as may be required for the purpose of carrying on the business of the corporation.

(2) In addition to the sums authorized to be raised under subsection (1), the board may, for the purpose of carrying on the business of the corporation and subject to the provisions of section 26, raise by means of debentures such further sums as may from time to time be authorized by resolution passed by the House of Representatives,1 upon motion made in that behalf by the Minister.

(3) The principal of, and interest due upon, all sums raised under this section shall be charged upon all the property and assets of the corporation.

(1) The board may, pending any issue of debentures, raise from any person, for the purpose of carrying on the business of the corporation, a loan, repayable within a period not exceeding twelve months, of such sum or sums of money and on such terms and conditions relating to the rate and payment of interest, as the Minister of Finance[1] may approve.

(2) The principal of, and interest due upon, every loan raised under subsection (1) shall, as they fall due, be paid out of the funds of the corporation, and the payment thereof shall be guaranteed by the Government of Ceylon in writing under the signature of the Deputy Secretary to the Treasury.[1]

(1) The board shall, prior to each issue of debentures, with the approval of the Minister,[6] determine in respect of that issue of debentures-

(2) Every determination under subsection (1) in respect of an issue of debentures shall be published in the Gazette prior to the date on which such issue commences.

(1) Subject to the provisions of subsections (2) and (3), the interest on and principal of all debentures shall be paid as they fall due from the funds of the corporation.

(2) Where the funds of the corporation are insufficient to pay the whole or any part of the interest on or the principal of any debentures, such interest and principal shall be paid from the Consolidated Fund,1 upon which they are hereby constituted a charge.

(3) All sums paid out of the Consolidated Fund1 under subsection (2) shall be repaid by the corporation on such terms and conditions as to the rate and payment of interest, and the time and manner of repayment, as the Minister of Finance1 may determine.

(a) a certificate, signed by the chairman, to the effect that the principal of, and the interest due upon, the debenture are charged upon all the property and assets of the corporation ; and

(b) a certificate, authenticated by the signature or the facsimile of the signature of the Deputy Secretary to the Treasury,1 to the effect that the payment of the principal of, and the interest due upon, the debenture is guaranteed by the Government of Ceylon.

(1) Save as is otherwise provided in this section, no notice of any trust in respect of any debenture shall be receivable by the corporation.

(2) Any debenture holder or any person who is an applicant for any debenture or to whom any debenture is to be transferred may, by request made in writing to the board, require that he be described in the register of debentures as a trustee, whether under a specified instrument of trust or otherwise ; and on such request being made, the board shall make such entries, in the register of debentures and in any debenture issued to such person, as the board may consider necessary for the purpose of complying with the request.

Where any request is made under this section by a debenture holder or by a person to whom a debenture is to be transferred, the debenture shall be transmitted to the board at the time when such request is made.

(3) Where any instrument of transfer of a debenture or any power of attorney or other document purporting to be executed by a debenture holder, who is described in the register of debentures as a trustee, is produced to the board, the board shall not be concerned to inquire whether the debenture holder is entitled in law to execute such instrument or other document or to give any such power ; and the board may act upon such instrument or power of attorney or document in like manner as though the debenture holder had not been described in the register as a trustee, whether he is or is not so described in such instrument, power of attorney or document, and whether he does or does not purport to execute such instrument, power of attorney or document in his capacity as a trustee.

(4) Nothing in subsection (2) or subsection (3) shall, as between trustees or as between any trustee and any beneficiary, be deemed to authorize a trustee to act otherwise than in accordance with the rules of law applicable in the case of that trustee and the terms of any instrument appointing him a trustee ; and neither the Government nor the corporation nor any person holding or acquiring any interest in any debentures shall, by reason only of any entry in the register of debentures, or of anything in any debenture or in any document or instrument relating thereto, be affected with notice of any trust or the fiduciary character of any debenture holder or of any fiduciary obligation attaching to the holder of any debenture.

(5) In this section ” trustee ” includes the executor of the last will or the administrator of the estate of a deceased person, the curator of the property of a minor, the manager of the estate of a person of unsound mind and any person holding or intending to hold any debenture on behalf or for the benefit of any other person or body of persons.

(1) Subject as hereinafter provided, the board shall have power to appoint all such officers of the corporation (including the subordinate staff) as may from time to time be necessary for carrying on the business of the corporation :

Provided that the appointment of the general manager, assistant general manager, secretary and accountant of the corporation shall not be made without the previous approval in writing of the Minister.[3]

(2) For the purposes of subsection (I) and of sections 36 to 38, the expression ” subordinate staff ” includes only such officers of the corporation, as are by the board deemed to be members of the subordinate staff.

(1) No director or other officer of the corporation shall be liable for any damage or loss suffered by the corporation unless such damage or loss was caused by his misconduct or wilful default.

(2) Every director, auditor, manager, secretary or other officer of the corporation shall be indemnified by the corporation for all losses and expenses incurred by him in or about the discharge of his duties except such as the board may deem to have been occasioned by his misconduct or wilful default.

(a) when required so to do-

(b) in the performance of his duties ; and

(c) in order to comply with any of the provisions of this Ordinance or any other law.

(1) The board shall cause the accounts of the corporation to be kept in such form and in such manner as may be prescribed.

(2) The books of account of the corporation shall be kept at the head office of the corporation or at such other place or places as the board may determine.

(1) The board shall cause the books of the corporation to be balanced on the thirtieth day of September in each year, and shall, as soon as may be thereafter, cause to be prepared a profit and loss account and a balance sheet containing a summary of the assets and liabilities of the corporation made up to the date aforesaid.

(2) The profit and loss account and the balance sheet shall be signed by a majority of the directors for the time being and by the general manager and the accountant of the corporation.

(1) The profit and loss account shall show,
arranged under the most convenient heads, the amount of gross income, distinguishing the several sources from Which it has been derived, and the amount of gross expenditure distinguishing the expenses of establish-ment, remuneration of directors, salaries and other matters.

(2) Every item of expenditure fairly chargeable against the year’s income shall be brought to account, and, in cases where any item of expenditure which may fairly be distributed over several years has been incurred in any one year, the whole amount of such item shall be shown and, where only a portion of such amount is charged against the income of the year, the reasons for not charging the whole of such amount shall be stated.

(1) The auditor shall examine the accounts of the corporation and ascertain the correctness of the balance sheet and report-

(2) The report of the auditor shall be transmitted by him to the board.

(a) to enforce the attendance of any person and to examine any person on oath ;

(b) to enforce the production of any document ; and

(c) to issue commissions for the examination of any person on interrogatories or otherwise ;

(1) Subject to the provisions of this Ordinance, the corporation is authorized to carry on and transact the several kinds of business hereinafter specified, namely-

(2) Any object mentioned in any paragraph of subsection (1) shall not, except where the context expressly so requires or where any limitation or restriction has been prescribed, be in any way limited or restricted by reference to or inference from the terms of any other paragraph of that subsection or the objects therein specified, or otherwise.

(3) In this section, ” client of the corporation” means a person to whom the corporation has lent any money in accordance with the provisions of this Ordinance.

(a) by a primary mortgage of immovable property in Ceylon ; or

(b) by a primary mortgage of movable property in Ceylon ; or

(c) by a mortgage of the crops or farming stock of any agricultural land in Ceylon, in accordance with any written law now in force or hereafter to be enacted which is applicable to the corporation,

(a) have estimated the value of the property offered as security for the loan, due regard being had to the market value of each property, the income derived from it at the time the value is estimated and the income likely to be derived from it in the future, the possibility of its depreciation in value in the future, the risks incidental to a forced sale, and any other circumstances which in the opinion of the board may affect the value of such property ;

(b) have satisfied itself that the amount of the loan to be granted on the security of such property, together with such amount, if any, as may be outstanding in respect of any earlier loan on the security of the same property, does not exceed such proportion of the value of the property as so estimated as the board may from time to time prescribe ;

(c) have satisfied itself that the borrower has a valid title to the property offered as security ;

(d) have satisfied itself that the purpose for which the loan is required is one for which loans may be made under this Ordinance by the corporation ; and

(e) have satisfied itself that there is no other good or valid reason why the loan should not be granted.

(1) The board may at any time, in its discretion and without assigning any reason therefor, by written order direct-

(2) Where an order issued under subsection (1) is not complied with before the date fixed, by the board, default shall be deemed to be made in respect of the whole of the unpaid portion of the loan and the interest due thereon up to date and, where the loan was granted on the mortgage of any immovable property, the pro-visions of sections 68 to 84 shall apply accordingly.

(a) to whom a loan is granted by the corporation ;
or

(b) who has obtained probate of the will or letters of administration to the estate of a person to whom a loan has been granted by the corporation or who has, under the provisions of section 72, been appointed to represent the estate of a deceased borrower ; or

(c) to whom any right, title or interest whatsoever in any property, or in any part of any property, movable or immovable, mortgaged to the corporation as security for any loan has passed, whether by voluntary conveyance or by operation of law,

(1) Every mortgage of immovable property executed in favour of the corporation as security for any loan of money shall be substantially in the form A in the Schedule.

(2) Any such mortgage may include a covenant that a higher rate of interest than that on which the loan was granted shall be paid if the borrower fails or neglects to make any payment due on account of interest, principal or otherwise under the mortgage, in full and on the due date.

(1) Any person authorized by resolution of the board under section 69 in respect of any property shall be entitled generally to take action in terms of the resolution and in particular-

(2) Every person authorized by resolution of the board under section 69 in respect of any property shall-

(3) The board shall when all sums due to the corporation under the mortgage have been fully paid surrender possession of the mortgaged property to the mortgagor and return to him any balance remaining of the income from such property.

(1) Save as otherwise provided in subsection (2), the provisions of sections 69 and 71 shall apply in the case of any default notwithstanding that the borrower may have died or that any right, title or interest whatsoever in the property mortgaged as security for the loan may have passed by voluntary conveyance or by operation of law to any other person.

(2) Where the borrower is dead and probate of his will or letters of administration to his estate have not been issued, the District Court of Colombo or the District Court of the district in which that property is situate may, upon application made in that behalf by the board and after service of notice of the application on such persons, if any, as the court may order, and if satisfied that the grant of probate or the issue of letters of administration is likely to be unduly delayed, appoint a person to represent the estate of the borrower for the purposes of this section ; and the provisions of sections 69 and 71 shall not apply in the case of any default made by the borrower unless and until a representative of his estate is appointed under this section.

(a) served on the borrower, if he is alive, and on every person on whom notice of any resolution is required to be served under section 73 ;

(b) posted on or near the property which is to be sold ; and

(c) affixed to the walls of the kachcheri and the several District Courts and Magistrates’ Courts within the jurisdiction of which the property is situate.

(1) If the amount of the whole of the unpaid portion of the loan (together with all interest due thereon according to the terms of the mortgage), and of the moneys and costs, if any, recoverable by the board under section 78 is tendered to the board at any time before the date fixed for the sale, the property shall not be sold and no further steps shall be taken in pursuance of the resolution under section 71 for the sale of that property.

(2) If the amount of the instalment or other payment in respect of which default has been made, together with any interest due thereon according to the terms of the mortgage, and of the moneys and costs, if any, recoverable by the board under section 78, is tendered to the board at any time before the date fixed for the sale, the board may, in its discretion, direct that the property shall not be sold, and that no further steps shall be taken in pursuance of the resolution under section 71 for the sale of that property.

(a) all moneys expended by the corporation in accordance with the covenants contained in the mortgage bond executed by the person to whom the loan was made, in the payment of premiums and other charges in respect of any policy of insurance effected on the property mortgaged to the corporation, and in the payment of all other costs and charges authorized to be incurred by the corporation, under the covenants contained in such mortgage bond ; and

(b) the costs of advertising the sale and of selling the mortgaged property :

Provided that the costs incurred under this paragraph shall not exceed such percentage of the loan as may from time to time be fixed by resolution of the board.

(1) If the mortgaged property is sold, the board shall sign a certificate of sale and thereupon all the right, title and interest of the borrower to and in the property shall vest in the purchaser ; and thereafter it shall not be competent for any person claiming through or under any disposition whatsoever of the right, title or interest of the borrower to and in the property, made or registered after the date of the mortgage of the property to the corporation, in any court to move to invalidate the sale for any cause whatsoever or to maintain any right, title or interest to or in the property as against the purchaser.

(2) A certificate signed by the board under subsection (1) shall be conclusive proof, with respect to the sale of any property, that all the provisions of this Ordinance relating to the sale of that property have been complied with.

(3) If the purchaser is some person other than the corporation, the certificate shall be substantially in the form B in the Schedule and, if the purchaser is the corporation, the certificate shall be substantially in the form C in that Schedule.

(4) Every certificate of sale shall be liable to stamp duty and charges as if it were a conveyance of immovable property and to any registration and other charges authorized by law, all of which shall be payable by the purchaser.

(1) The purchaser of any immovable property sold in pursuance of the preceding provisions of this Ordinance shall, upon application made to the District Court of Colombo or the District Court having jurisdiction over the place where that property is situate, and upon production of the certificate of sale issued in respect of that property under section 80 be entitled to obtain an order for delivery of possession of that property.

(2) Every application under subsection (1) shall be made, and shall be disposed of, by way of summary Procedure in accordance with the provisions of Chapter XXIV of the Civil Procedure Code; and on all documents filed for the purpose of each such application and on all proceedings held thereupon, stamp duties and other charges shall be payable at the respective rates payable under any written law for the time being in force, on applications for, and proceed-ings connected with or incidental to, the execution of a decree of a District Court for the delivery of possession of any immovable property of the same value as the land to which such application relates,

(3) Where any immovable property sold in pursuance of the preceding provisions of this Ordinance is in the occupancy of the debtor or of some person on his behalf or of some person claiming under a title created by the debtor subsequently to the mortgage of the property to the corporation, the District Court shall order delivery to be made by putting the purchaser, or any person whom he may appoint to receive possession on his behalf, in possession of the property.

(4) Where any immovable property sold in pursuance of the preceding provisions of this Ordinance is in the occupancy of a tenant or other person entitled to occupy the same, the District Court shall order delivery to be made by affixing a notice that the sale has taken place, in English and in the Sinhalese and Tamil languages, in some conspicuous place on the property, and proclaiming to the occupant by beat of tom-tom, or in such other mode as may be customary, at some convenient place, that the interest of the debtor has been transferred to the purchaser. The cost of such proclamation shall be fixed by the court and shall in every case be prepaid by the purchaser.

(5) Every order under subsection (3) or subsection (4) shall be deemed, as the case may be, to be an order for delivery of possession made under section 287 or 288 of the Civil Procedure Code, and may be enforced in like manner as an order so made, the debtor and’ the purchaser being deemed, for the purpose of the application of any provision of that Code, to be the judgment-debtor and judgment-creditor, respectively.

(1) The board may make rules for or in respect
of all or any one or more of the following matters :-

(2) All rules made under subsection (1), (other than a rule made under paragraph (e) or paragraph (f) of that subsection), shall be submitted to the Minister[3] for ratification and, when ratified, shall be published in the Gazette together with a notification of such ratification.

(3) Every rule made under subsection (1), (other than a rule made under paragraph (e) or paragraph (f) of that subsection), shall, upon notification in the Gazette of the ratification of such rule by the Minister,3 be as valid and effectual as if it were herein enacted.

(4) Every rule made under paragraph (e) or paragraph (f) of subsection (1) shall be submitted to the Minister[3] for ratification and, when ratified, shall be as valid and effectual as if it were herein enacted.

(1) The corporation may, by writing under its common seal, empower any person either generally or in respect of any specific matter, as its attorney, to execute deeds on its behalf in any place not situate in Ceylon.

(2) A deed signed by such an attorney on behalf of the corporation and under his signature or seal shall bind the corporation and have the same effect as if it were under its common seal.

(1) The board shall from the funds of the corporation provide a common seal for the purposes of the corporation and may from time to time change such seal.

(2) The common seal shall be kept by such person and in such manner as the board may from time to time determine, and shall not be used except by the authority of the board and in the presence of at least two directors, who shall sign the document to which the seal is affixed.

(a) direct any person or persons to inquire into and report to him upon the working and financial condition of the corporation ;

(b) direct that the affairs of the corporation be wound up ;

(c) issue such incidental, consequential or supplemental directions as may appear to him to be necessary for the purpose of giving effect to any direction issued by him under paragraph (a) or paragraph (b).