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CS Professional · Labour Laws and Practice · Social Security Legislations

A State Board, which is a Social Security Organisation other than the Corporation, wants to raise a loan to build an office. Which statement is correct under the Code?

It may raise the loan only with the previous sanction of the appropriate Government and on terms that Government prescribes. Section 120(3) grants this power to Social Security Organisations other than the Corporation, so neither free borrowing nor a ban applies.

  1. AIt may do so with the previous sanction of the appropriate Government and on terms prescribed by that GovernmentCorrect
  2. BIt may do so freely, as raising loans needs no approval
  3. CIt needs sanction of the Central Government in every case, whatever the appropriate Government is
  4. DIt cannot borrow, since only the Corporation may raise loans

Explanation

Section 120(3) lets each Social Security Organisation except the Corporation raise loans with the previous sanction of the appropriate Government and on terms prescribed by it. The sanction is that of the appropriate Government, not always the Central Government, and the power is not limited to the Corporation; the Corporation is in fact excluded.

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