Section 27 in The Government Securities Act, 2006
Title: Misuse of subsidiary general ledger account facility
Where a subsidiary general ledger account is opened by the Bank in favour of any holder of a Government security in terms of section 4 and,--
(a) it comes to the notice of the Bank that the said account is being operated contrary to the terms and conditions subject to which the account was opened; or
(b) the subsidiary general ledger account transfer form has bounced due to insufficiency of Government security or funds; or
(c) the Bank is of opinion that the account is being operated contrary to the banking practice or in a manner prejudicial to the interests of the holders of Government securities in general; or
(d) the subsidiary general ledger account is being misused in any manner,
the Bank may, by order in writing, after giving an opportunity of being heard, debar the holder of such account from trading with the subsidiary general ledger account facility temporarily or permanently as it deems fit.
Title: Pledge, hypothecation or lien
(1) Subject to such terms and conditions as may be prescribed, the holder of a Government security may create a pledge or hypothecation or lien in respect of such security.
(2) On receipt of notice of pledge or hypothecation or lien from the holder of the Government security, the Bank or any agent maintaining the account in respect of such security shall make necessary entry in its record and such entry shall be evidence of the pledge, hypothecation or lien thereof, as the case may be.
Title: Power to call for information, cause inspection and issue directions
(1) The Bank may at any time, for the purposes of this Act, call for such information as it deems necessary in relation to a Government security from any agent, or holder of subsidiary general ledger account including constituents subsidiary general ledger account and cause an inspection or scrutiny to be made by one or more of its officers or other persons, of any agent or holder of a subsidiary general ledger account including constituents subsidiary general ledger account.
(2) The Bank may, if it considers necessary so to do, issue such directions as it thinks fit, in relation to a Government security,--
(i) to the holders of the subsidiary general ledger accounts including constituents' subsidiary general ledger account;
(ii) to the agents maintaining bond ledger account; and
(iii) to any other person dealing with the Government securities,
for carrying out the purposes of this Act.
Title: Contravention and penalties
(1) If any person, for the purpose of obtaining for himself or for any other person any title to a Government security, makes to any authority in any application made under this Act or in the course of any inquiry undertaken in pursuance of this Act any statement which is false and which he either knows to be false or does not believe to be true, he shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both.
(2) No Court shall take cognizance of any offence under sub-section (1) except on the complaint of the Bank.
(3) Without prejudice to any other action which the Bank may deem fit to take, the Bank, after giving a reasonable opportunity of being heard, may impose on any person who contravenes any provision of this Act, or contravenes any regulation, notification or direction issued under this Act, or violates the terms and conditions for opening and maintenance of a subsidiary general ledger account, including constituents' subsidiary general ledger account, a penalty, not exceeding five lakh rupees and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after first day during which the contravention continues.
Title: Certain laws not to apply to Government securities
(1) The Public Debt Act, 1944 (18 of 1944) shall cease to apply to the Government securities to which this Act applies and to all matters for which provisions have been made by this Act.
(2) Notwithstanding such cessation anything done or any action taken in the exercise of any power conferred by or under that Act shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act was in force at all material times.
(3) Nothing contained in the Depositories Act, 1996 (22 of 1996) or the regulations made thereunder shall apply to Government securities covered by this Act unless an agreement is executed to the contrary by any depository under the Depositories Act, 1996 with the Government or the Bank, as the case may be.