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THE STATES RE-ORGANIZATION ACT, 1956

Title : THE STATES RE-ORGANIZATION ACT, 1956

Year : 1956



(1) As FROM the appointed day, the Financial Corporations established under the State Financial Corporations Act, 1951 (63 of 1951.), for the existing States of Madhya Bharat, Punjab, Rajasthan and Travancore-Cochin shall be deemed to be the Financial Corporations established under the said Act for the new States of Madhya Pradesh, Punjab, Rajasthan and Kerala, respectively.

(2) The States of Kerala, Madhya Pradesh and Rajasthan shall be liable to pay to the States of Madras, Rajasthan and Madhya Pradesh, respectively, on account of the share of each of the last named States in the paid-up capital of the Financial Corporations for the existing States of Travancore-Cochin, Madhya Bharat and Rajasthan, respectively, such amount as the Central Government may by ORDER determine.

(3) As FROM the appointed day, the Financial Corporations established under the State Financial Corporations Act, 1951, for the existing States of Andhra and Hyderabad shall stand amalgamated and shall be deemed to be the Financial Corporation established under the said Act for the State of Andhra Pradesh.

(4) After consulting the Governments of the existing States of Andhra and Hyderabad, the Central Government may, before the appointed day, by notified order, provide for the constitution of the Board of Directors of the Financial Corporation for the State of Andhra Pradesh and for such consequential, incidental and supplemental matters as may, in the opinion of the Central Government, be necessary to give effect to the provisions of sub-section (3).

(5) The State of Andhra Pradesh shall be liable to pay to each of the new States of Mysore and Bombay on account of its share of the paid-up capital of the Financial Corporation for the existing State of Hyderabad such amount as the Central Government may, by order, determine.

(6) As FROM the appointed day, the Financial Corporations established under the State Financial Corporations Act, 1951, for the existing States of Bombay and Saurashtra shall stand amalgamated and shall be deemed to be the Financial Corporation established under the said Act for the new State of Bombay.

(7) After consulting the Governments of the existing States of Bombay and Saurashtra, the Central Government may, before the appointed day, by notified order, provide for the constitution of the Board of Directors of the Financial Corporation for the new State of Bombay and for such consequential, incidental and supplemental matters as may, in the opinion of the Central Government, be necessary to give effect to the provisions of sub-section (6).

(8) The new State of Bombay shall be liable to pay to each of the new States of Mysore and Rajasthan on account of its share of the paid-up capital of the Financial Corporation for the existing State of Bombay such amount as the Central Government may, by order, determine.



(1) As FROM the appointed day, the Madras Industrial Investment Corporation constituted for the existing State of Madras shall be deemed to have been constituted for that State with its area as altered by the provisions of Part II.

(2) The State of Madras shall be liable to pay to each of the new States of Kerala and Mysore on account of its share of the paid-up capital of the said Corporation such amount as the Central Government may by ORDER determine.



With effect FROM the appointed day, the following amendments shall be made in the Reserve Bank of India Act, 1934 (2 of 1934.), namely:-

(1) In section 2, in the proviso to clause (f), for the words "any Central co-operative society in that State to be a State co-operative bank", the words "any one or more co-operative societies carrying on business in that State to be a State co-operative bank or banks"
shall be substituted.

(2) In section 20,-

(a) The words and letter "and the Governments of Part A States" shall be omitted;

(b) For the words "their accounts respectively", the words "its account" shall be substituted;

(c) For the words "their exchange", the words "its exchange" shall be substituted;

(d) After the words "public debt", the words "of the Union" shall be inserted;

(3) In section 21,-

(a) In sub-section (1),-

(i) The words "and the State Governments" wherever they occur, shall be omitted;

(ii) For the word "their", at both places where it occurs, the word "its" shall be substituted;

(iii) In the proviso, the words "or any State Government" shall be omitted, and for the word "they" the word "it" shall be substituted;

(b) In sub-section (2), the words "and each State Government" shall be omitted;

(c) For sub-section (4), the following sub- section shall be substituted, namely:-

(4) Any agreement made under this section shall be laid, as soon as may be after it is made, before Parliament"; and

(d) Sub-section (5) shall be omitted;

(4) In sub-section (1) of section 21-A, the word and letter "Part B" shall be omitted;

(5) After section 21-A, the following section shall be inserted, namely:-

Effect of agreements made between the Bank and certain States before the Ist November, 1956."21-B.

(1) Any agreement made under section 21 or section 21-A between the Bank and the Government of a State specified in the Explanation below and in force immediately before the Ist day of November, 1956, shall, as FROM that day have effect as if it were an agreement made on that day under section 21-A between the Bank and the Government of the corresponding State subject to such modifications, if any, being of a character not affecting the general operation of the agreement, as may be agreed upon between the Bank and the Government of the corresponding State, or in default of such agreement, as may be made therein by ORDER of the Central Government.

Explanation.-In this sub-section "corresponding State" means,-

(a) In relation to the agreement between the Bank and the State of Andhra, the State of Andhra Pradesh;

(b) In relation to the agreement between the Bank and any other Part A State as it existed before the Ist day of November, 1956, the State with the same name; and

(c) In relation to the agreement between the Bank and the Part B State of Mysore or Travancore-Cochin as it existed before the Ist day of November, 1956, the State of Mysore or Kerala respectively.

(2) Any agreement made under section 21-A between the Bank and the Government of the Part B State of Hyderabad, Madhya Bharat or Saurashtra shall be deemed to have terminated on the 31st day of October, 1956".



In the Multi-Unit Co-operative Societies Act, 1942 (6 of 1942), after section 5, the following sections shall be inserted, namely:-

Transitional provisions regarding certain co-operative societies affected by reorganisation of States.

"5A. (1) Where by virtue of the provisions of Part II of the States Reorganisation Act, 1956, any co-operative society which, immediately before the Ist day of November, 1956, had its objects confined to one State becomes, as from that day, a multi-unit co-operative society, it shall be deemed to be a co-operative society to which this Act applies and shall be deemed to be actually registered in the State in which the principal place of business of the co-operative society is situated.

(2) If it appears to the Central Registrar of Co-operative Societies necessary or expedient that any such society should be reconstituted or reorganised in any manner or that it should be dissolved, the Central Registrar may, with the approval of the Central Government, place before a meeting of the general body of the society held in such manner as may be prescribed by rules made under this Act, a scheme for the reconstitution, reorganisation or dissolution of the society, including proposals regarding the formation of new co-operative societies and the transfer thereto of the assets and liabilities of that society.

(3) If the scheme is sanctioned by a resolution passed by a majority of the members present at the said meeting, either without modifications or with modifications to which the Central Registrar agrees, he shall certify the scheme and upon such certification, the scheme shall, notwithstanding anything to the contrary contained in any law, regulation or bye-law for the time being in force, be binding on all the societies affected by the scheme, as well as the shareholders and creditors of all such societies.

(4) If the scheme is not sanctioned under sub-section (3), the Central Registrar may refer the scheme to such Judge of the appropriate High Court as may be nominated in this behalf by the Chief Justice thereof, and the decision of that Judge in regard to the scheme shall be final and shall be binding on all the societies affected by the scheme as well as the shareholders and creditors of all such societies.

Explanation.--In this sub-section "appropriate High Court" means the High Court within whose jurisdiction the principal place of business of the multi-unit co-operative society is situated.

5B. The Central Government may, by notification in the Official Gazette, direct that any power or authority exercisable by the Central Registrar of Co-operative Societies under this Act shall, in relation to such matters and subject to such conditions as may be specified in the direction, be exercisable also by such Registrar of Co-operative Societies of a State or by such officer subordinate to the Central Government or to a State Government as may be specified in the notification.



(1) The State Electricity Board constituted under the Electricity (Supply) Act, 1948 (54 of 1948), for any of the existing States of Bombay, Madhya Pradesh and Saurashtra shall as FROM the appointed day continue to function in those areas in respect of which it was functioning immediately before that day, subject to the provisions of this section and to such directions as may FROM time to time be issued by the Central Government.

(2) Any directions issued by the Central Government under sub-section (1) in respect of any such Board shall include a direction that the said Act shall in its application to that Board have effect subject to such exceptions and modifications as the Central Government thinks fit.

(3) A State Electricity Board continued under sub-section (1)shall cease to function as from, and shall be deemed to be dissolved on, the Ist day of November, 1957, or such earlier date as the Central Government may be ORDER appoint; and upon such dissolution, its assets and liabilities shall,-

(a) In the case of the Board for Saurashtra, pass to the State of Bombay, and

(b) In the case of the Board for the existing State of Bombay or Madhya Pradesh, be apportioned between the successor States in such manner as may be agreed upon between them within one year of the dissolution of the Board or if no agreement is reached, in such manner as the Central Government may by ORDER determine.

(4) Nothing in the preceding provisions of this section shall be construed as preventing the Government of any of the successor States to the existing States of Bombay, Madhya Pradesh and Saurashtra FROM constituting at any time after the appointed day a State Electricity Board for that successor State under the provisions of the said Act; and if such a Board is so constituted before the dissolution of a Board continued under sub-section (1) and functioning in any part of that successor State,-

(a) Provision may be made by ORDER of the Central Government enabling the new Board to take over FROM the existing Board all or any of its undertakings, assets and liabilities in that State, and

(b) Upon the dissolution of the existing Board, any assets and liabilities which would otherwise have passed to the successor State by or under the provisions of sub-section (3) shall pass to the new Board instead of to the successor State.



If it appears to the Central Government that the arrangement in regard to the generation or supply of electric power or the supply of water for any area or in regard to the development of any project for such generation or supply has been or is likely to be modified to the disadvantage of that area by reason of the fact that it has been transferred by the provisions of Part II FROM the State in which the power stations and other installations for the generation and supply of such power, or the catchment area reservoirs and other works for the supply of water, as the case may be, are located, the Central Government may give such directions as it deems proper to the State Government or other authority concerned for the maintenance, so far as practicable, of the previous arrangement.



(1) Any agreement or arrangement entered INTO between the Central Government and one or more existing States or between two or more existing States relating to-

(a) The administration, maintenance and operation of any project executed before the appointed day, or

(b) The distribution of benefits, such as, the right to receive and utilise water or electric power, to be derived as a result of the execution of such project, which was subsisting immediately before the appointed day shall continue in force, subject to such adaptations and modifications, if any (being of a character not affecting the general operation of the agreement or arrangement) as may be agreed upon between the Central Government and the successor State concerned or between the successor States concerned, as the case may be, by the Ist day of November, 1957, or, if no agreement is reached by the said date, as may be made therein by ORDER of the Central Government.

(2) Where a project concerning one or more of the existing States affected by the provisions of Part II has been taken in hand, but not completed, or has been accepted by the Government of India for inclusion in the Second Five Year Plan before the appointed day, neither the scope of the project nor the provisions relating to its administration, maintenance or operation or to the distribution of benefits to be derived FROM it shall be varied,-

(a) In the case where a single successor State is concerned with the project after the appointed day, except with the previous approval of the Central Government, and

(b) In the case where two or more successor States are concerned with the project after that day, except by agreement between those successor States, or if no agreement is reached, except in such manner as the Central Government may by ORDER direct, and the Central Government may FROM time to time give such directions as may appear to it to be necessary for the due completion of the project and for its administration, maintenance and operation thereafter.

(3) In this section, the expression "project" means a project for the promotion of irrigation, water supply or drainage or for the development of electric power or for the regulation or development of any inter-State river or river valley.



(1) Save as otherwise expressly provided by the foregoing provisions of this Part, where any body corporate has been constituted under a Central Act, State Act or Provincial Act for an existing State the whole or any part of which is by virtue of the provisions of Part II transferred to any other existing State or to a new State, then, notwithstanding such transfer, the body corporate shall, as FROM the appointed day, continue to function and operate in those areas in respect of which it was functioning and operating immediately before that day, subject to such directions as may FROM time to time be issued by the Central Government, until other provision is made by law in respect of the said body corporate.

(2) Any directions issued by the Central Government under sub-section (1) in respect of any such body corporate shall include a direction that any law by which the said body corporate is governed shall in its application to that body corporate have effect subject to such exceptions and modifications as may be specified in the direction.



(1) Notwithstanding anything contained in section 63 of the Motor Vehicles Act, 1939 (4 of 1939) a permit granted by the State or a Regional Transport Authority in an existing State, the whole or any part of the territories of which is transferred to another existing State or to a new State shall, if such permit was, immediately before the appointed day, valid and effective in any area in the territories so transferred, be deemed to continue to be valid and effective in that area after that day subject to the provisions of that Act as for the time being in force in that area; and it shall not be necessary for any such permit to be countersigned by any other State or Regional Transport Authority for the purpose of validating it for use in such transferred territories:

Provided
that the Central Government may, after consultation with the State Government or Governments concerned, add to, amend or vary the conditions attached to the permit by the Authority by which the permit was granted.

(2) No tolls, entrance fees or other charges of a like nature shall be levied after the appointed day in respect of any transport vehicle for its operations in any transferred territory under any such permit, if such vehicle was, immediately before that day, exempt FROM the payment of any such toll, entrance fees or other charges for its operations beyond the boundaries of the State in which such permit was granted:

Provided that the Central Government may, after consultation with the State Government or Governments concerned, authorize the levy of any such toll, entrance fees or other charges, as the case may be.



Where on account of the reorganisation of the States under this Act, any body corporate constituted under a Central Act, State Act or Provincial Act, any co-operative society registered under any law relating to co-operative societies or any commercial or industrial undertaking of an existing State, is reconstituted or reorganised in any manner whatsoever or is amalgamated with any other body corporate or undertaking, or is dissolved, and in consequence of such reconstitution, reorganisation, amalgamation or dissolution, any workman employed by such body corporate or in any such undertaking is transferred to, or re-employed by, any other body corporate or undertaking, then, notwithstanding anything contained in section 25F of the Industrial Disputes Act, 1947 (14 of 1947) such transfer or re-employment shall not entitle him to any compensation under that section:

Provided that-

(a) The terms and conditions of service applicable to the workman after such transfer or re-employment are not less favourable to the workman than those applicable to him immediately before the transfer or re-employment; and

(b) The employer in relation to the body corporate or the undertaking where the workman is transferred or re-employed, is by agreement or otherwise legally liable to pay to the workman, in the event of his retrenchment, compensation under section 25F of the Industrial Disputes Act, 1947 (14 of 1947), on the basis that his service has been continuous and has not been interrupted by the transfer or re-employment.



(1) As FROM the appointed day, there shall be established in the State of Madras a Devaswom Fund for the management of Hindu temples and shrines in the territories transferred to that State FROM the State of Travancore-Cochin.

(2) The assets as on the appointed day of the Devaswom Surplus
Fund constituted by section 26 of the Travancore-Cochin Hindu Religious Institutions Act, 1950, shall be divided INTO two parts in the ratio of 37.5 to 13.5 in such manner as the Central Government may, by order, direct, and the smaller part shall, as FROM the appointed day, be transferred to the Fund mentioned in sub-section (1).



The Central Government may, in respect of the institutions of the categories specified in the Sixth Schedule located in a new State or in the State of Andhra Pradesh or Madras, direct that such facilities as may be specified in the direction shall be provided to the Government and the people of one or more adjoining States for such period as may be so specified; and thereupon those facilities shall be provided for the said period upon such terms and conditions as may be agreed upon between the State Governments concerned before the 31st day of March, 1957, or, if no agreement is reached by the said date, as may be fixed by ORDER of the Central Government.
Last updated on September, 2016

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