SIKKIM GOVT. RULES FOR ADVANCE OF LOANS FOR THE IMPLEMENTATION OF HOTEL PROJECT FOR PROMOTION, ENCOURAGEMENT AND DEVELOPMENT OF TOURISM IN SIKKIM

PREAMBLE

"The Sikkim Government Rules for advance of loans for implementation of Hotel project for promotion, encouragement and development of Tourism in Sikkim" are hereby published for general information:--

SIKKIM Government Rules for Advance of Loans for Implementation of Hotel Project.

Rule - 1.

These rules may be called The Sikkim Govt. Rules for advance of loans for the implementation of hotel project for promotion, encouragement and development of Tourism in Sikkim.

Rule - 2.

The rules shall come into force from the 1st May 1976.

Rule - 3.

(a)      Loans may be advanced to Co-operative Societies, Individuals or registered and unregistered bodies for starting construction, renovation and expansion of hotels or motels on the approved list of the Department of Tourism with a view to providing additional capacity for occupancy by tourists, both foreign and domestic, and improving upon their existing facilities. The loan shall be upto the limit of Rs. 2.00 lakhs in the case of individuals and unregistered bodies, and Rs. 5.00 lakhs in the case of registered bodies.

(b)      Loans to Co-operative Societies may be advanced subject to their maximum borrowing capacity as per any law, or rules for the time being in force and applicable to them, provided that no loan shall be advanced to Co-operative Societies without the special sanction of the Registrar of Co-operative Societies, Sikkim.

(c)      Loan shall be advance primarily to permanent residents of Sikkim only but this provision may be relaxed by the Government in special cases.

(d)      Loans under these rules shall be advanced to those applicants who have not been granted or have not obtained loans for other purposes for Govt. or Semi-Govt. Institutions.

Rule - 4.

(a)      The Secretary, Department of Tourism shall be the drawing and disbursing officer under these rules.

(b)      The discretion to grant loans shall rest with the Sikkim Government.

Rule - 5.

All loans advanced under these rules shall bear interest at the @ 91/2 per annum the date on which the loans shall start bearing interest shall be 2(two) years from the date on which the full amount of loan was paid to the loanee.

Rule - 6.

(a)      A loan may be advanced either in lump sum or in two instalments and subject to such conditions as may be specified by the sanctioning authority, provided that when the debtor fails without assigning sufficient reasons therefore to accept any instalment of loan amount in due time, the sanctioning authority may, at any time, declare the loan to be closed require repayment of the loan amount already advanced to be made in such a manner and instalment as may be fixed by him under rule 7.

(b)      Loan for new constructions shall be advanced upto a maximum of 75% value of the fixed assets of the hotel project namely land, building and other assets. Purchase and commission of a building into hotel will be treated as new construction for granting loans, provided the applicant satisfies the Govt. by differing the buildings covered by the application and/or the application's other assets as securities.

(c)      Loans for the expansion/renovation shall be upto the maximum of 50% of the cost to be incurred as examined, assessed and approved by the Govt.

(d)      Loans in case of new construction shall be repayable in 24 half yearly instalments over a period of twelve years, the first instalment being due after 2 (two) years from the date on which the balance amount of loan is made available

(e)      The loan in case of expansion/renovation of hotels and motels shall be repayable in 18 (eighteen) half yearly instalments over a period of nine years, the first instalment to be paid after one year from the date on which the first loan is made available.

(f)       Repayments of the loans or fixed instalment there of with interest shall become due 24 months after the date on which the amount was paid as loan to the loanee provided that at the loanee's death at any time the loan or interest thereon shall become immediately due from his estate or assets.

(g)      It will be open to the applicant to commence repayment of the loan during the period of moratorium mentioned or to repay the entire loan with interest at any time before the period of loan prescribed above.

(h)     The Secretary, Tourism shall have power to extend time for repayment of loan by one year. Any further extension can be granted by the Govt. on the recommendation of the Secretary, Department of Tourism in exceptional cases.

Rule - 7.

Loans shall be repaid in instalments fixed in the order sanctioning the grant of the same. Amount of instalments for recovery of the loan shall be worked out after taking into consideration the expedited productive and profit earning capacity of the hotel/motel to be started, expanded/renovated with the loan.

Rule - 8.

An application for the grants of loan shall be made to the Secretary Department of Tourism, Government of Sikkim, in prescribed from.

Rule - 9.

Every application for loan under rule 8 shall be accompanied by full description of the security which the applicant is willing to offer for the loan applied for and no loan shall be advanced under these rules unless the security offered by the petition is considered by the sanctioning authority, in its discretion to be sufficient guarantee for the loans advanced under these rules. Loans advanced must be secured in the following manners:--

(a)      Loans may be advanced to persons possessing sufficient immovable properties in Sikkim, and proper legal and registered document to secure repayment of the loan and interest thereon is executed in favour of Govt.

(b)      In case of security of immovable property, certificate from the District Officer of the District in which the immovable property is located to the effect that it is not in any way encumbered shall accompany the application.

Rule - 10.

If any default is committed by the applicant either in the payment of the interest or repayment of the loan instalments or in complying with any of the terms and conditions of loan, then the Govt. may, at its discretion and depending on the merits of the cases, deal with the matter either in any one or more of the following ways:--

(a)      The Department of Tourism shall have the right to order the applicant to deposit the entire amount of the loan sanctioned with interest thereon to the Government within four months from the date of default.

(b)      In the event of successive defaults or making default in payment inspite of notice as stated in clause (a) above the Govt. may enforce the security to realise the loan with interest due thereon at a time.

Rule - 11.

Accounts of the loans shall be maintained by the Tourist Department which shall also watch their resources and the fulfilment of terms and conditions of the loan.

Rule - 12.

A rebate of 21/2 will be allowed on punctual payments of the instalments of the loan amount.

Rule - 13.

Before the loan is advanced to the applicant necessary legal, proper and registered document securing the repayment of the loan and interest will have to be executed in favour of the Govt. by the applicant at his own expenses.

Rule - 14.

Before a loan is advanced under these rules, the applicant shall sign agreement in favour of the Govt. to abide by the following terms:--

(a)      That the amount of loan shall be utilised for the purpose for which it is given and for no other purpose.

(b)      That the loan together with interest shall be repaid in such instalments as prescribed under clauses 6(d) & (e).

(c)      That the loan together with interest shall be repaid in such instalments as may be fixed under clauses 5 and 7 above.

(d)      That the loanee shall furnish a monthly statement of full accounts to the Depart" ment of Tourism showing how the loan is spent.

(e)      The loanee shall allow the Secretary, Department of Tourism or any officer deputed by him for the purpose to inspect the account and to see whether the value of the security given has in any way undergone depreciation or not.

(f)       That in case the loanee dies, the Government of Sikkim shall have power to realize the same from his/her legal heirs, inheritors or successors.

(g)      That the applicant shall pay stamp duty payable on the agreement under any law for the time being in force.

Rule - 15.

Notwithstanding all that is contained in rules 6(h) the Secretary, Department of Tourism shall also have power to inflict a penal rate of interest of 8% per annum on each instalment not paid, with interest accrued therein, on the date for payment of such install-

The applicant may at any time be called upon by the Secretary Tourism to submit returns or statements of the number and/or names of foreign Tourists lodged in his/her hotel/motel during any specified period and the rent etc. charged from them and shall forthwith furnish such detailed information whenever asked for by the Department of Tourism. It shall also like-wise be obligatory on the part of the applicant to honour the requisition of the Secretary, Department of Tourism or any person authorised by him for accommodating tourists in the applicant's hotel/motel at any time.