(1) (a) On the acceptance of an application for a loan, the applicant shall execute a deed in the prescribedform, undertaking to apply the loan to the purpose for which, and to fulfil the conditions on which, the loan was granted, rendering himself and such property as may have been specified in the deed as security, including machinery or any building constructed, with aid of the loan and in the event of such property being found insufficient, rendering the hole of his property liable for the repayment of the loan with interest and costs, if any, incurred by the State Government in making or recovering the loan.
(b) No transfer, assignment or charge made or created after the execution of the deed, in relation to the property specified therein or machinery purchased or building constructed with the aid of a loan, shall be valid against the State Government unless it has been made or created with the previous consent in writing of the authority sanctioning the loan.
(2) When the application has been made by a firm or company, the deed shall be executed by a duly authorised representative thereof, and the deed shall thereupon be deemed binding on the said firm or company and the property of the said firm or company shall be liable for the repayment of the loan in the same manner as if the loan had been granted to an individual.