The Public Debt Act has been established on 22nd November 1944. This is an Act framed to consolidate and amend the laws in relation to Government Securities and in relation to the maintenance of Government public debt by the Reserve Bank of India.
Several Transactions of the Government obligations has been done in promissory note initially which contained high level difficulties and later Stock Certificates that are not Negotiable Instrument. This Law of Government Securities gave some solution for the rigidity of transfer of Government Securities.
The Transfer of Government Securities should be done in a manner prescribed. No Securities that is issued after 30th April 1946 by the Central Government or any Securities issued by the Part A, State Government after 31st March 1949 or The Securities issued by the Part B State after 14th October 1956, etc, as prescribed in the Act. This does not transfer full ownership of the Securities. Just because a person has been transferred shall not pay any amount.
In case if the Government Securities has been transferred to its holder of public Office, it will be notified in the Official Gazette and it will be in the name of the Office. In that case it is transferred without any further endorsement to any other holder in its public office. In case if any holder transferred the Government Securities other than his successor then he has to sign and name his office as prescribed with the conditions mentioned in this Act. This is also applicable to a joint holder to transfer to a single holder.
There shall be no notice of trust shall be received by the Central Government in pursuance to Government Securities and the Central Government shall be bound by such notice. The Government shall not be a trustee in pursuance to the Government Securities. In case if the holder of Securities directs to be a trustee for paying interest or such amount, transfer or any other matter in pursuance to it, without injustice or liability to the Bank, the Central Government shall act as a trustee if it deems fit.
In case of the sole holder’s demise, the Executor or administrator must be the same person who is a successive holder of the Government Securities as recognized by the Bank. There should not be any bar in recognitions by Bank by any laws in force. In case if one of the Joint holders dies, then the Government Securities shall be in hold of the survival holder or holders. As a summary procedure the Government Securities of the holder who is died, shall be given possession with the help of Executor or administrator by providing the successive Certificate from the bank to the person who deems fit to hold the General Securities. In case if the successor to hold Securities being the minor or insane, etc, in such case Bank shall make such Order as it deems fit and solve the issue of holding the Government Securities.
In case if the Original Securities have been lost or theft, etc, then the Bank after proper scrutiny with the proof submitted shall grant the issue of duplicate Securities. In a similar way it can renew the Securities or provide new Securities in case if there is any changes in the Securities as it deems fit.
In case of any dispute in the title of the Government Securities bank should give a written notice to each claimant for determining his title within six months, if there arise no response or there find any issue then Bank shall provide any such Order to solve the issue upon title in pursuance to this Act. Before passing such Order Bank shall ask the claimant to furnish securities and bonds that worth twice as that of the subject matter in dispute.
In case of passing Order Bank can seek the assistance of a Magistrate to take evidence and scrutinize the issue or else any other person who deems fit is asked to take evidence through an affidavit to resolve the issue through an Order. No court shall question the Banks Order if it is in pursuance to this Act. The notices that are to be given by the Bank or by any Government shall be notified in the Official Gazette making it as though it is delivered to all. This vesting Order shall give entire title to the person accruing interest on Securities for full title.
In case of any Stay of proceedings from the Court Order, the Bank shall hold the payment with interest due; if necessary transfer the payment to the Official Trustees appointed by the State as per the Order of Court. The Bank shall cancel any proceedings in pursuance to the Securities if it deems necessary to make a fresh Order.
In case of discharge of Interest on Government Securities, no person shall claim for the period elapsed. Even in case of discharge of bearers bonds, shall be discharged as prescribed in this Act. In case of limitation on liability in paying Interest, the Central Government in case of non fixation of Limits, it get expired immediately after six years from the date on which the Interest become payable.
The Bank being a deemed public officer shall proceed its legal proceedings as that of Civil procedure Code, 1908. In case of any offence against the provision of the Act, they shall be punished with imprisonment with or without fine. The Court shall take cognizance only on Complaint of a Bank.
The Central Government has enormous power to make any number of rules and regulations in pursuance to this Act in good faith. Nobody can take any legal action against such rules and regulations made in good faith.
This Act transparently declares the method of transfer of Government Securities for Government public Debt and the enormous powers of Central Government and Bank to take steps in pursuance to this Act.
by C.Srivenkatesh Prabhu.