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CS Professional · Labour Laws and Practice · Social Security Legislations

A Social Security Organisation, other than the Corporation, wishes to raise a loan to construct an office. Which condition applies under section 120 of the Code?

A Social Security Organisation other than the Corporation may raise loans only with the previous sanction of the appropriate Government and on the terms prescribed by that Government. Its own committee resolution alone is not enough, and there is no small-loan exemption.

  1. ANo sanction is needed if the loan is below Rs 1 crore
  2. BIt needs the previous sanction of the appropriate Government and must follow the terms prescribed by that GovernmentCorrect
  3. CIt needs only a resolution of its own committee
  4. DIt is prohibited from raising any loans

Explanation

Section 120(3) lets such an organisation raise loans and take measures to discharge them with the previous sanction of the appropriate Government and on terms it prescribes. The text contains no monetary threshold exempting small loans.

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