(1) Where, before the appointed day, the State of Andhra Pradesh or Madras has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power,—
(a) if such purposes are, as from that day, purposes relatable exclusively to the transferred territories, of the State to which the territories are transferred; and
(b) in any other case, of the State which made the contract;
and all rights and liabilities which have accrued, or may accrue, under any such contract shall, to the extent to which they are rights or liabilities of the State which made the contract, be rights or liabilities of the State specified in clause (a) or clause (b) above.
(2) For the purposes of this section, there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract—
(a) any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and
(b) any liability in respect of expenses incurred in or in connection with any such proceedings.
(3) This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligations; and bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.
(a) if such purposes are, as from that day, purposes relatable exclusively to the transferred territories, of the State to which the territories are transferred; and
(b) in any other case, of the State which made the contract;
and all rights and liabilities which have accrued, or may accrue, under any such contract shall, to the extent to which they are rights or liabilities of the State which made the contract, be rights or liabilities of the State specified in clause (a) or clause (b) above.
(2) For the purposes of this section, there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract—
(a) any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and
(b) any liability in respect of expenses incurred in or in connection with any such proceedings.
(3) This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligations; and bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.
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More sections of this act
Section 1 · Short title and commencement.Section 2 · Definitions.Section 3 · Transfer of territories.Section 4 · Changes of territorial divisions in Andhra Pradesh.Section 5 · Changes of territorial divisions in Madras.Section 6 · Amendment of First Schedule to the Constitution.Section 7 · Saving powers of State Government.Section 8 · Amendment of Fourth Schedule to the Constitution.India Code, Government of India. Text fetched 14 Oct 2026. Check the linked official text and subsequent notifications when applying a provision.