(1) All assets acquired with the loan shall be deemed to be mortgaged or hypothecated, as the case may be, to the State Government for re-payment of the loan with interest due thereon and the amount of the loan and the interest thereon shall be the first charge on such assets.
(2) Subject to the provisions of Sub-section (1) the borrower may with the prior approval of and subject to such conditions and restrictions, if any, imposed by the Collector, mortgage, convey or otherwise transfer any of his interests in the whole or any part of assets acquired with the loan and any mortgage, 4 conveyance or other transfer without such approval or in contravention of such restrictions and conditions, if any, shall be void as against the State Government:
Provided that nothing in this section shall affect the borrower's; right to transfer such articles of his stock-in-trade as are meant for transfer to customers and others in the normal course of business.