(1) No loan shall be granted under this Act, where the amount of the loan exceeds rupees two hundred, without obtaining,-
(a) security of immovable property owned by the applicant or two sureties therefor or of the plant and machinery of the industry or of the immovable property as well as the plant and machinery as aforesaid to the extent of the aid granted, seventy five per cent of the market value of the immovable property or the plant and machinery or the immovable property as well as the plant and machinery, as the case may be, being taken as the value thereof for the said purpose; or
(b) security by way of mortgage or floating charge upon the whole of the assets of the industry subject to any encumbrance existing at the time when the loan is granted and by such collateral security, if any, as may be required by the Government:
Provided that where it is not possible to give security of the immovable property as aforesaid the loan may be granted on the personal security of two sureties on production of their solvency certificate.
(2) The Government may, if considered necessary, bind the applicant to invest such portion of the loan as determined by them on permanent improvement to the industry.
(3) Notwithstanding anything in sub-section (1), the Government may, in the case of any industrial co-operative Security to be obtained for loan.
8 [Act No.53 of 1976] society, grant loan which may extend to an amount equivalent to ten times the paid-up share capital of such Industrial Co-operative Society subject to such condition as may be prescribed.