(1) Where, before the appointed day, the existing State of Andhra Pradesh has made any contract in the exercise of its executive power for any purposes of the State, that contract shall,––
(a) if the purposes of the contract are, on and from the appointed day, exclusive purposes of either of the successor States of Andhra Pradesh and Telangana, then it shall be deemed to have been made in exercise of the executive power of that State and the liability shall be discharged by that State; and
(b) in any other case, all rights and liabilities which have accrued or may accrue under any such contract shall be apportioned between the successor States on the basis of population ratio or in any other manner as may be agreed to by the successor States.
(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 the bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.
(a) if the purposes of the contract are, on and from the appointed day, exclusive purposes of either of the successor States of Andhra Pradesh and Telangana, then it shall be deemed to have been made in exercise of the executive power of that State and the liability shall be discharged by that State; and
(b) in any other case, all rights and liabilities which have accrued or may accrue under any such contract shall be apportioned between the successor States on the basis of population ratio or in any other manner as may be agreed to by the successor States.
(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 the 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.Section 2 · Definitions.Section 3 · Formation of Telangana State.Section 4 · State of Andhra Pradesh and territorial divisions thereof.Section 5 · Hyderabad to be common capital for States of Telangana and Andhra Pradesh.Section 6 · Expert Committee for setting up of a capital for Andhra Pradesh.Section 7 · Governor of existing State of Andhra Pradesh to be common Governor.Section 8 · Responsibility of Governor to protect residents of common capital of Hyderabad.India Code, Government of India. Text fetched 14 Oct 2026. Source metadata reports last modification: 2019-11-29. Check the linked official text and subsequent notifications when applying a provision.