Securities Act, 1920

The Securities Act, 1920 consolidates the law relating to Government securities in Pakistan — things like promissory notes (including treasury bills), stock certificates and bearer bonds issued by the Federal or a Provincial Government against a loan (Section 2). Section 3 says the Government does not have to recognise notice of any trust over a Government security except as the Act specifically allows, and it can treat a properly appointed executor or administrator as the full owner of a deceased holder's security without inquiring into the terms of a will.

Section 4 deals with what happens when a Government security is held jointly or severally by two or more people and one dies: the security passes to the survivor(s), overriding the normal rule in Section 45 of the Contract Act, 1872, though this does not stop the deceased's representatives from separately claiming against the survivor. Section 5 requires that any endorsement of a Government promissory note be made by signature on the back of the security itself, and Section 6 allows Government securities to be issued to holders of certain public offices "by the name of the office," so the security automatically transfers to whoever next holds that office. Sections 8 and 9 cover an endorser's limited liability and the mechanics of impressing an authorised signature on securities (which can be printed, engraved or mechanically applied).

Sections 10-16 (listed in the contents but not detailed in this excerpt) deal with issuing duplicate, renewed, converted, consolidated or sub-divided securities when originals are lost or need reissuing. Sections 17-21 (also only listed) cover discharge of securities, a summary procedure on the death of a holder, and special rules for securities held by minors and people of unsound mind, plus an indemnity provision. Section 24 gives the Government broad rule-making power covering matters like payments to minors or the insane, indemnities against third-party claims, execution of documents by people unable to write, and the registration of trustees holding Government stock — with a proviso that no rule can force a trustee to act against the actual terms of the trust.

Section 26 clarifies that questions about Pakistani Government securities are to be decided under Pakistani law. This is a 1920 law carried over from British India with many footnoted amendments over the decades (references to A.O. 1937, A.O. 1949, and the Central Laws (Statute Reform) Ordinance, 1960), and it explicitly does not apply to securities covered separately by the Public Debt Act, 1944 — so anyone dealing with a specific Government security should check which Act actually governs it.