(a) "Existing State" means any of the existing Part C States of Ajmer, Bhopal, Coorg, Kutch and Vindhya Pradesh;
(b) "Union purposes" mean the purposes of Government relatable to any of the matters mentioned in the Union List.
Subject to the other provisions of this Part-
(a) Such of the assets of the Union within an existing State as are immediately before the appointed day held by the Union for purposes of the governance of that State shall, as from that day, pass to the successor State, unless the purposes for which the assets are so held are Union purposes; and
(b) All liabilities of the Union arising out of, or in relation to, the governance of an existing State shall, as from the appointed day, be liabilities of the successor State, unless the liabilities are relatable to a Union purpose.
The right to recover arrears of any tax (including land revenue) due in an existing State, being a tax enumerated in the State List, shall pass to the successor State.
The right to recover any loans or advances made before the appointed day to any local body, society, agriculturist or other person in an existing State shall belong to the successor State unless the loan or advance was made in connection with a Union purpose.
Any debt of an existing State attributable to any loan given by the Central Government on or after the 1st day of April, 1954, and outstanding immediately before the appointed day shall be a debt due by the successor State to the Central Government.
The liability of the Union in respect of the provident fund account of a Government servant serving immediately before the appointed day in an existing State under the administrative control of the Lieutenant-Governor or Chief Commissioner thereof shall, as from that day, be the liability of the successor State:
Provided that the Central Government shall transfer to the successor State funds equal to the liability of the Union as on the appointed day.
Where a Government servant under the administrative control of the Lieutenant-Governor or Chief Commissioner of an existing State has, before the appointed day, retired or proceeded on leave preparatory to retirement, any outstanding claim in respect of his pension shall be settled by the successor State; but the liability in respect of the pension sanctioned to any such Government servant, whether before or after the appointed day, shall be the liability of the Union.
(1) Any contract made before the appointed day by the Union in the exercise of its executive power for purposes of the governance of an existing State shall, as from that day, be deemed to have been made in the exercise of the executive power of the successor State, unless the purposes of the contract are Union purposes; and all rights and liabilities which have accrued or may accrue under any such contract shall, to the extent to which they would have been rights and liabilities of the Union if this Act had not been passed, be rights and liabilities of the successor State.
(2) The provisions of sub-sections (2) and (3) of section 87.shall apply in relation to any such contract as they apply in relation to a contract to which sub-section (1) of that section applies.
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