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Securities Act, 1920

1ACT NO. X OF 1920

[11th March, 1920]

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:‑–

 

1For Statement of Objects and Reasons, see Gazette of India, Extraordinary, dated the 29th October, 1919, p. 529;for Report of Select committee , see Gazette of India, 1920, Pt. V, p. 39; and for Proceedings in council, see ibid., 1920, Pt. VI, p. 734.

                This Act does not apply to Government securities to which the Public Debt (Central Government) Act, 1944 (18 of 1944) applies, and to all matters for which provision is made by that Act, see s. 29 of the said Act.

                It has been extended to the Leased Areas of Balochistan, see the Leased Areas (Laws) Order, 1950 (G.G.O 3 of 1950); and also applied in the Federated Areas of Balochistan, see Gazette of India, 1937, Pt. I, p. 1499.

                It has been extended to:-

the Balochistan States Union by the Balochistan States Union (Federal Laws) (Extension) Order, 1953 (G.G.O 4 of 1953), as amended;

Khairpur State, by the Khairpur (Federal Laws) (Extension) Order, 1953 (G.G.O. 5 of 1953), as amended.

The Act has been and shall be deemed to have been brought into force in Gwadur (with effect from the 8th September, 1958), by the Gwadur (Application of Central Laws) Ordinance, 1960 (37 of 1960) s. 2.


1. Short title, extent and commencement.‑(1) This Act may be called the  1* Securities Act, 1920;

            2[(2) It extends to the whole of Pakistan]; and

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

            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 by the 3[Federal Government] or by any 4[Provincial Government] in respect of any loan contracted either be or after the passing of this Act, but does not include currency‑note; and

(b      “prescribed” means prescribed by rules made under this Act;

5[(c)     “the Government ”or “Government” in relation to any loan or security, means the Government raising the loan or issuing the security.]      

             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.

            (2) The Government shall not be deemed to have received notice of any trust by reason only of the fact that it has recog­nised an endorsement 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 appointment of such executor or administrator, it shall be entitled to treat him as the full owner of any Government security belonging to the estate of the person whom he represents

            4. Right of survivors of joint or several payees of Government securities.____(1) Notwithstanding anything in section 45 of the Con­tract Act, 1872 (IX of 1872),_____

(a)        when a Government security 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.

 

1The word “Indian” omitted by A.O., 1949.

2 Subs. by the Central Laws (Statue Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1955), for sub-section (2) as amended by A.O., 1949 and the Federal Laws (Revision and Declaration) Act, 1951 (26 of 1951), s. 8. 

3Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”, which was previously amended by A.O., 1937, for “G.G. in C.”.

4Subs. by A.O., 1937, for “L.G.”

5Clause (c) ins., ibid.

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

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

                1[(4) For the purposes of this section, a body incorporated under the Companies Act, 1913 (VII of 1913), or the Co‑operative Societies Act, 1912 (II of 1912), or any other enactment for the time being in force whether within or without  2[Pakistan], relating to the incorpora­tion of associations of individuals, shall be deemed to die when it is dissolved.]

            5. Indorsements to be made on security itself. Notwithstanding anything in section 15 of the Negotiable Instruments Act, 1881 (XXVI of 1881), no indorsement of a Government promis­sory note shall be valid unless made by the signature of the holder inscribed on the back of the security itself.

            6. Holding of Government securities by holders of public offices.‑(1) In the case of any public office to which the  3[Govern­ment] may, by 4notification in the  5[official Gazette], declare 6this 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 indorsed 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.

 

1Sub-section (4) ins. by the Indian Securities (Amdt.) Act, 1928 (2 of 1928), s. 

2 Subs. by the Central Laws (Statue Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1955), for “the Provinces and the Capital of the Federation” which had been subs. by A.O., 1949, for “British India”. 

3Subs. by A.O., 1937, for “G.G. in C.”.

4For such notification in respect of, –

(i) N.W.F.P., see N.W.F.P Government Gazette, 1952, Pt. I, pp. 300-302;

(ii) Sind, see Sind Government Gazette, 1954, Pt. I. pp. 66-68.

5Subs. by A.O., 1937, for “Gazette of India”.

6For offices to which this sub-sectionn has been applied, see Gen. R. & O.

                1[7.  Issue of securities to rulers of Acceding States or non Acceding States]-Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVll of 1981), s. 3 and Sch. II.

            8Indorser of Government security not liable for amount therof. Notwithstanding anything in the Negotiable Instruments Act, 1881 (XXVI 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.


           
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 as the 2Government] may direct, on the 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.

 ISSUE OF DUPLICATE, RENEWED, CONVERTED, CONSOLIDATED OR SUB‑DIVIDED SECURITIES.

            10. Issue of duplicate securities.‑(1) When a Government security is alleged to have been lost, 3[stolen] or destroyed either wholly or in part, and a person claims to be the person to whom but for the loss, 3[theft] or des­truction it would be payable, he may, on application to the pres­cribed  4[authority], and on producing proof to  5[its] satisfaction of the loss, 1[theft] or destruction and of the justice of the claim and on payment of the prescribed fee, if any, obtain from  6[it]

(a)        the payment of interest in respect of the security said to be lost, 3[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,  3[theft] or destruction.

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

                3[(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.]

 

1This section was previously amended by various enactments from time to time.

2Subs. by A.O., 1937, for “G.G. in C.”.

3Ins. by the Indian Securities (Amdt.) Act, 1927 (21 of 1927), s. 2.

4Subs. by the Indian Securities (Amdt.) Act, 1937 (28 of 1937), s. 2, for “officer”.

5Subs. ibid., for “his”.

6Subs. ibid., for “him”. 

            11. Renewal of bearer bonds. The holder of a bearer bond or other Government secu­rity payable to bearer may, on application to the prescribed  1[authority], on delivery of the bearer bond or other security and on payment of the prescribed fee, if any, obtain from such 1[authority] a renewed bearer bond or other security, as the case may be.

            12. Renewal of promissory notes.  Subject to the provisions of section 13, a person claiming to be entitled to a Government promissory note, may, on applying to the prescribed 1[authority], and on satisfying 2[it] of the justice of his claim and delivering the promissory note receipted in the prescribed manner, and paying the prescribed fee, if any, obtain from such 1[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 1[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.

                3*     *         *            *          *          *          *         

            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 1[authority] may‑

(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 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 4[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 5[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 purposes 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.


1Subs. by the Indian Securities (Amdt.) Act, 1937 (28 of 1937), ss. 3, 4 and 5, for “officer”.

2Subs. ibid., s.4, for “him”.

3 Explanation to s. 12 rep. by the Federal Laws (Revision and Declaration) Act, 1951 (26 of 1951), s. 3 and Sch. II.

4 Subs. ibid., s. 5, for “his”.

5Subs. ibid., for “he”.)

            (2) For the purpose of the inquiry referred to in sub‑section (1), the prescribed 1[authority] may  2[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 Magistrate, such Magistrate may himself record or may direct any Magistrate of the first‑class subordinate to him, or any Magistrate of the second‑class subordinate to him and em­powered by general or special order of the 3[Government] in this behalf, to record the evidence, and shall forward a copy thereof to the prescribed  1[authority].

            Explanation.‑ For the purposes of this sub‑section, the Dis­trict Magistrate means the District Magistrate having jurisdiction in the place where interest on the promissory note is payable 4*    *    *.

(3)  5[The officer of the prescribed authority] or any Magis­trate acting under this section may, if he thinks fit, record evidence on oath.

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.

            15. Issue of converted, etc., securities.____(1) The prescribed 1[authority] may, subject to such conditions as may be prescribed, on the application of a person claiming to be entitled to a Government security or securities, on being satisfied of the justice of the claim and on delivery of the security or securities receipted in the prescribed manner and on payment of the prescribed fee, if any, convert, consolidate or sub­divide the security or securities, and issue to the applicant a new security or securities accordingly.

2) The conversion, consolidation or sub‑division referred to in sub‑section (1) may be into a security or securities of the same or different classes or of the same or different loans.

            16. Liability in respect of promissory note renewed, etc.‑(1) When a renewed Government promissory note has been issued under section 12, or a new Government promissory note has been issued upon conversion, consolidation or sub­division under section 15, in favour of any person, the note so issued shall be deemed to constitute a new contract between the Government and such person and all persons deriving title there­after through him.

            (2) No such renewal, conversion, consolidation or sub‑division shall affect the rights as against the Government of any other person to the security or securities so renewed, converted, con­solidated or sub‑divided.

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