Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

UNDERSTANDING STATE REORGANISATION LEGISLATIONS IN THE CONTEXT OF STATEHOOD FOR TELANGANA

ARCHITECTURE, PRINCIPLES & PRECEDENTS

A BRIEFING PAPER

ADITHYA KRISHNA CHINTAPANTI

B.A.B.L.(Hons) (NALSAR) L.L.M (Law in Development) U.K. Ph. D. Student (Law), University of Warwick, U.K. adithya_k@yahoo.com

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Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

Sl.No. Title 1. Introduction 2. State Formation and Constitutional Mandate a. What is the role of the State Legislature in State Reorganisation? b. In the event of a imposition of Presidents Rule owing to failure of constitutional machinery in the State, is it true that a reorganisation cannot be introduced in the Parliament as the Legislature does not exist in for the President to refer the Bill ? 3. Certain Broad Features & Principles of State Reorganization Acts 3. I. Reorganization of the existing state and the description of the successor states. II. Representation of the successor states in the Legislatures i.e. Parliament and their respective Legislative Assembly and Council. a. The Parliament b.Legislative Assembly & Council 3. III. III. Provisions pertaining to the High Courts of the Successor States. 3. IV. IV. Authorization of Expenditure and the Distribution of Revenues. a. Authorization of Expenditure b. Distribution of Revenues 3.V. Apportionment of Assets and Liabilities a. Land and Goods b. Treasury and Bank Balances c. Arrears of Taxes d. Right to recover loans and advances e. Investments and credits in certain funds f. Assets and Liabilities of State Undertakings g. Public Debt h. Floating Debt/Loan i. Refund of taxes collected in excess j. Deposits k. Provident Fund l. Pensions m. Contracts n. Liability in respect of actionable wrong o. Liability as guarantor p. Items in suspense q. Residuary provision r. Apportionment of assets or liabilities by agreement s. Power of Central Government to order allocation or adjustment in certain cases t. Certain expenditure to be charged on the Consolidated Fund 2|Page

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3. VI.

VI. Provisions pertaining to State Corporations and certain State Institutions. a. Provisions as to State Electricity Board, State Warehousing Corporation and State Road Transport Corporation b. Continuance of arrangements in regard to generation and supply of electric power and supply of water c. Provisions as to State Financial Corporation d. General provisions as to statutory corporations e. Provisions as to certain companies f. Temporary provisions as to continuance of certain existing road transport permits g. Special provisions as to income- tax h. Continuance of facilities in certain State institutions 3.VII VII. Provisions as to Central and State Services a. Provisions relating to All- India Services b. Provisions relating to services in the Successor States and Other Services c. Provisions as to continuance of officers in same post d. Advisory Committees e. Power of Central Government to give directions f. Provisions as to State Public Service Commission g. Jurisdiction of the Commissions, Authorities and Tribunals 3.VIII VIII. Legal and Miscellaneous Provisions. a. Territorial extent of laws b. Power to adapt laws c. Power to construe laws d. Power to name authorities, etc., for exercising statutory functions e. Legal proceedings f. Transfer of pending proceedings g. Right of pleaders to practise in certain cases h. Effect of provisions of the Act inconsistent with other laws i. Power to remove difficulties

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Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

1. Introduction

The reorganization of the internal boundaries of the Indian Union has been a routine exercise undertaken by the Parliament as and when the need arose. Even post the major reorganization through the States Reorganization Act, 1956 , new states continued to be carved out of existing administrative entities so as to accommodate social, economic and political demands of citizens of the region aspiring for statehood. The creation of Nagaland (1962), Haryana Gujarat (1960), Meghalaya (1961),

(1966) , Mizoram (1971), Goa (1987), Chattisgarh (2000),

Jharkhand (2000) and Uttarakhand (2000) are examples of the same. The enactments whose format has been more or less standard set the precedent as to the expectation from any legislation carving a state from a pre-existing administrative entity. It is opined that a legislative review of select enactments would help keep expectations from the state formation process more realistic.

In course of this paper it is proposed to summarize certain common features from the reorganization legislations creating Haryana, Gujarat, Chattisgarh and Jharkhand. The reason for choosing these set of states is the diversity they present in terms of geography, timing of formation and certain solutions arrived at to resolve issues pertaining to sharing of power and water resources. Gujarat and Haryana were formed in the 60s and there is a good 35-40 year gap between their formation and the formation of Chattisgarh and Jharkhand. The unaltered nature of certain provisions over a period of time also crystallizes certain equitable principles followed in course of State formation. This exercise is aimed at giving the reader an insight into the legislations reorganizing states, it deals with the broad principles governing state reorganization. For a more detailed reading the said legislations and insight onto the variations between the legislations the reader is advised to consult the Annexure to this paper, wherein all the four state reorganization legislations have been reproduced.

This paper also discusses the relevant constitutional provisions and the role of the Union Parliament and the State Legislature in the state reorganization process. Through this chapter the author aims to set to rest the debates surrounding the role and powers of the two institutions. Also a clear understanding of the constitutional intent and subsequent judicial interpretations 4|Page

Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

would help the reader better understand the legislative intent behind the provisions of the state reorganization legislations.

This exercise is more in the nature of a Briefing Paper aimed at negotiators participating in the reorganization exercise be it politicians, legislators, bureaucrats , constituencies like the employee associations and the public at large. It benchmarks standard legislative principles and procedures involved in the state reorganization process. It is opined that the same would help keep expectations from the reorganization process more realistic and facilitate a smooth reorganization of the State of Andhra Pradesh in to Telangana and the residuary entity more popularly being referred to as Seemandhra.

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Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

2. State Formation and Constitutional Mandate The Constitution of India (hereinafter the Constitution) proclaims India to be a Union of States1. Whereas the territorial integrity of the Union is inviolable, the Constitution makers through Article 3 have vested the power on the Union Parliament to form a state by separation of territory from any other state.2 The power vested in the Parliament is absolute and the Parliament alone has the power to alter and amend the internal territorial boundaries of the Country. The following procedure has to be followed prior to introducing the State Reorganisation Bill in the Parliament3

a. That the Bill should be referred by the President to the Legislature of the State for expressing its views thereon within such period as may be specified in such a reference and such other period as the President may extend. b. Post Presidential reference to the State Assembly the Bill can be introduced in either house of the Parliament upon the recommendation of the President.

a. What is the role of the State Legislature in State Reorganisation? The Constitutional consultative process has incorporated the procedure of referring the proposed reorganisation Bill to the concerned State Legislature so as to elicit opinions. Given the same there seems to be much debate on the role of the State Legislature when the Bill is referred by the President and the meaning of the words expressing its views thereon. Courts have time and again held that the Parliament is not obliged to accept or implement the views of the State Legislature4. In other words though the Bill is required to be mandatorily referred to the State Assembly , the recommendations of the State Assembly are not binding on the Parliament5. Similarly a fresh reference is not required to be made if post reference and introduction of the

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Article 1 of the Constitution of India. Article 3(a) of the Constitution of India . 3 Proviso to Article 3 of the Constitution of India. 4 Babulal Parate V. State of Bombay AIR 1960 SC 51 5 Pradeep Chaudhary V. Union of India 2009 (12) SCC 248.

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Bill in the Parliament, the Parliament deems fit to amend the Bill which was originally referred by the President to the State Assembly6.

Given the same, the contention that

a resolution for bifurcation in the Legislative Assembly

would be defeated by majority and that such a decision would be binding on the Parliament has no legal basis. It is only the views that are elicited as per the Constitutional process. The absence of a vote is to negate any move by the majority to thwart the right of the minority constituents to form a separate administrative unit as per the procedure established by the Constitution. When faced with questions relating to the interpretation of the provisions of the Constitution, we must look to the Constituent Assembly Debates (CAD) which preceded the formulation of the provisions of the Constitution so as to ascertain the Constitutional intent behind the phraseology of the provisions adopted7. When the Constituent Assembly was deliberating in November 1948 on the scope and content of Article 3, there was a proposal by Prof. KT Shah that the legislation constituting a new State from any region of a State should originate from the legislature of the State concerned. Had this procedure been approved, the power to decide the statehood of a region seeking separation would have been vested with the State legislature dominated by the elite of developed regions. Opposing the same and using the then demand for an Andhra Province as an example, Shri K Santhanam stated as under: I wonder whether Professor Shah fully realises the implications of his amendment. If his amendment is adopted, it would mean that no minority in any State can ask for separation of territory, either for forming a new province or for joining an adjacent State unless it can get a majority in that State legislature. I cannot understand what he means by Originating. Take the case of Madras Province for instance. The Andhras want separation. They bring up a resolution in the Madras Legislature. It is defeated by a majority. There ends the matter. The way of the

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Babulal Parate V. State of Bombay AIR 1960 SC 51. Adithya Krishna Chintapanti , 8th March 2010, Constitutional Intent and Political Smoke Screen, The Indian Express , can be accessed at http://newindianexpress.com/states/andhra_pradesh/article255864.ece?service=print

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Andhras is blocked altogether. They cannot take any further step to constitute an Andhra province...8. Thus Article 3 emerged in its current form. It is the Constitutional intent that the will of the people of a region to form a separate State be the sole criterion for the Centre to initiate the process of State formation. This is the Constitutional benchmark for creating a new State for a region, as amply demonstrated in the deliberations of the Constituent Assembly and as reflected in the current phraseology of Article 3 of the Constitution of India. In fact owing to this provision that the Andhra State was created, however paradoxically the Seemandhra leadership seems to be relying on a rather incorrect interpretation of the said provision. Such an interpretation would only create a perception of injustice in the minds of constituents of Seemandhra Region and it is this perception of injustice which is dangerous and is bound to cause irreparable damage to the relations between the bifurcated entities.

b. In the event of a imposition of Presidents Rule owing to failure of constitutional machinery in the State, is it true that a reorganisation cannot be introduced in the Parliament as the Legislature does not exist in for the President to refer the Bill ? History is witness to one such situation wherein the area and boundaries of the existing State of Punjab were altered when it was under Presidents Rule. On 5th July 1966, the President made a Proclamation under Article 356 of the Constitution. In pursuance of the same, the President declared that the powers of the Legislature of the said State shall be exercisable by or under the authority of Parliament as provided for under Article 356 (1)(b) (2) . Article 356(1) (c) also vests with the President the power to suspend either wholly or partially any provision of the Constitution with regard to any body or authority of the State. In pursuance of the same, the President suspended amongst other provisions the Proviso to Article 3 and the Article 174 (1), the latter which empowers the Governor to summon the House or Houses of the State Legislature. Subsequent thereto, the Punjab Reorganisation Act of 1966 was passed by the Parliament , bifurcating the State into Punjab and Haryana States.

Pg.440, Vol. No. VII, CAD.

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In the case of Manohar Lal v. Union of India9, Mr. Manohar Lal challenged the said bifurcation on the ground that in the absence of a Legislature led to its not expressing its views under the Proviso to Article 3 , and, therefore, the President could not have referred the said Bill to the Parliament and the Parliament in turn could not have legislated and bifurcated the State in the absence of the views of the Legislature. In this context the Court observed as follows It will thus be seen that the power to summon the Legislature, of the Governor having been suspended no occasion could thereafter arise, during the period when such suspension was in operation, for the Legislature to meet for the purpose of expressing its views on the Bill to be introduced in Parliament affecting the area, boundaries or name of the concerned State However, in order to make the matter clearer, the operation of so much of the proviso to Article 3 had also been suspended by the President. In view of the clear power conferred by Art. 356(1) (a) & (b) to declare that the powers of the Legislature of the State shall be exercisable by or under the authority of the Parliament, it enacted Act 31 of 1966 by which all the powers of the Legislature of the concerned State (State of Punjab) to make laws were conferred on the President. (Para 9) Court observed that the application of Proviso to Article 3 was suspended and that the powers of the Legislature of the State were exercisable by or under the authority of the Parliament, whereby all powers of the legislature of the State of Punjab to make laws were conferred on the President. Given the same, the Court was of the view that the Petitioners contention i.e. what was transferred by means of Article 356 (1)(b) of the Constitution was only the legislative power of the State Legislature but not the power to meet and express its views as contemplated by the Proviso to Article 3 of the Constitution, was not tenable. The Counterfactual Article 370 of the Constitution of India is titled Temporary provisions with respect to the State of Jammu and Kashmir. Article 370 (1)(b)(ii) limits the power of the Parliament to legislate for the State of Jammu and Kashmir and requires the concurrence of the Government of the State of Jammu and Kashmir on such matters which the President may by order specify. In pursuance of the same, The Constitution (Application to Jammu and Kashmir) Order of 1954 was promulgated by the President. The said Order notifies the exceptions and modifications to the provisions of the Constitution, as they would apply to the State of Jammu and Kashmir.
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AIR 1970 Delhi 178

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Understanding State Reorganisation Legislations in the Context of Statehood for Telangana Adithya Krishna Chintapanti

The Presidential Order inserts a new Proviso to Article 3 and the same reads as follows Provided further that no Bill providing for increasing or diminishing the area of the State of Jammu and Kashmir or altering the name of boundary of that state shall be introduced in Parliament without the consent of the Legislature of that State. Hence the Proviso to Section 3 has been modified to the extent of its application to the State of Jammu & Kashmir , making prior consent of the legislature of that State, mandatory for the introduction of a Bill increasing or diminishing the area of the State of Jammu and Kashmir. This provision which requires prior Consent is certainly worded entirely differently from the way the Proviso as applicable to the rest of the country has been worded i.e. requiring the State Legislature to express its views. There is therefore a clear distinction made in the Constitution between the State Legislature of Jammu and Kashmir, which has to consent to changes in its area and boundary, and the other States of the Union where only the views of the legislature of the affected State(s) is required to be ascertained Hence it can be concluded beyond any reasonable doubt that all that is required under Proviso to Article 3 is a referral to the legislature of the State concerned for expression of its views. It can also be concluded from the case law discussed, that the views of the State Legislature are not binding on Parliament. Further, in a case wherein the Proviso to Article 3 has been suspended under Article 356 (1) (c) owing to imposition of Presidents Rule under Article 356, such consultation process can be done away with, given the fact that the legislative power of the State Legislature are vested with the Parliament in this situation. (Manohar Lal v. Union of India & Ors (AIR 1970 Delhi 178)) All that the Proviso requires is a referral by the President of the proposal contained in the Bill. The proviso does not require a fresh reference if the said Bill was amended and the said amendment was properly moved and accepted in the Parliament subsequent to the State Legislature expressing its views. (Babulal Parate v. The State of Bombay and Anr ( AIR 1960 SC 51))The only State Legislature whose consent as opposed to expression of views is required is the State of Jammu and Kashmir as has been discussed above. It is this phraseology of the Presidential Order of 1954 which further strengthens the view point that the Proviso to Article 3 is a procedural mechanism to elicit the views of the Legislature of the State. (The Constitution (Application to Jammu & Kashmir) Order, 1954)

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3. Certain Broad Features & Principles of State Reorganization Acts

Reorganization Acts Areas Covered. The reorganization acts reviewed cover the following broad areas . This is to the exclusion of inter-state river water sharing , in the context of the Bachawat Award and contested right scenario it is opined that it would not be appropriate or prudent to make sweeping statements in this respect. I. Reorganization of the existing state and the description of the successor states. II. Representation of the successor states in the Parliament and their respective Legislative Assembly and Council. III. Provisions pertaining to the High Courts of the successor states. IV. Authorization of Expenditure and the Distribution of Revenues. V. Apportionment of Assets and Liabilities . VI. Provisions pertaining to State Corporations and certain State Institutions. VII. Provisions as to Central and State Services. VIII. Legal and Miscellaneous Provisions.

I. Reorganization of the existing state and the description of the successor states. The sections dealing with this comprising its territory
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firstly describe the newly created State and the districts

. Thereafter they describes the territories of the re-organised state

post creation of the new State 11 and amends the 1st Schedule to the Constitution of India which lists the States in the Indian Union. 12

II. Representation of the successor states in the Legislatures i.e. Parliament and their respective Legislative Assembly and Council. a. The Parliament This requires the amendment of 4th Schedule of the Constitution of India , which delineates the number of seats allocated to the states in the Council of States or the Rajya Sabha13 and the division of the seats allotted to the successor states proportionately, term of
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Sec. 3 MPRA, 2000, Sec.3 PRA, 1966, Sec.3 BRA, 2000 and Sec.3 BRA, 1960 Sec. 4 MPRA, 2000, Sec.6 PRA, 1966 and Sec.4BRA 2000. 12 Sec. 5 MPRA, 2000, Sec.7 PRA, 1966, Sec.5 BRA, 2000 and Sec.4 BRA, 1960. 13 Sec. 7 MPRA, 2000, Sec.9 PRA, 1966, Sec.7 BRA, 2000 and Sec.6 BRA, 1960.
1111

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the current members however remains unaltered. The Acts ensure that the term of the elected members of the Lok Sabha remain unaltered14. This chapter delimits the Parliamentary and Assembly constituencies15 and specifies the number of seats allotted to the successor states in the Lok Sabha amending the Representation of People Act, 1950 to the said effect16

b. Legislative Assembly & Council It defines the number of seats available in the legislative assemblies of the successor states amending the Schedule to the Representation of People Act, 1950 to the said effect 17 and allots the existing members between the Assemblies of the Successor States18. The successor

Legislative Assemblies are then permitted complete the duration of 5 years for which the members were originally chosen. It lays down the procedure for the election of the election of the Speaker and the Deputy Speaker in the successor states19. As and where there exists a State Legislative Council, this chapter provides for its continuation in the residuary state and the revised membership20. There is no division of the Legislative Council, nor creation of a new Legislative Council for the newly created state. In fact certain members from the territories of the newly created state cease to be members of the Legislative Council of the residuary state 21.

III. Provisions pertaining to the High Courts of the Successor States. The MPRA 2000 , BRA 2000 and
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BRA 1960 establish the High Courts of Chattisgarh,

Jharkhand and Gujarat respectively . The President would then determine as to which of the Judges from the existing Court would become judges in the High Court of the newly formed state23. It also declares that the parent High Court ceases to have jurisdiction on the transferred territory from the appointed date24 and confers jurisdiction on the territory of the newly formed

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Sec. 11 MPRA, 2000, Sec.12 PRA, 1966, Sec.11 BRA, 2000 and Sec.12 BRA, 1960. Sec. 10 MPRA, 2000, Sec.14PRA, 1966, Sec.10 BRA, 2000 and Sec.14 BRA, 1960. 16 Sec. 9 MPRA, 2000, Sec.23 PRA, 1966, Sec.9 BRA, 2000 and Sec.10 BRA, 1960. 17 Sec. 12 MPRA, 2000, Sec.13 PRA, 1966, Sec.12 BRA, 2000 and Sec.13 BRA, 1960. 18 Sec. 13 MPRA, 2000, Sec.15PRA, 1966, Sec.13 BRA, 2000 and Sec.15BRA, 1960. 19 Sec. 15 MPRA, 2000, Sec.18PRA, 1966, Sec.15 BRA, 2000 and Sec.17 BRA, 1960. 20 Sec.20 PRA, 1966, Sec.17 BRA, 2000 and Sec.21 BRA, 1960. 21 Sec.21&22 PRA, 1966, Sec.18&19 BRA, 2000 and Sec.22&23 BRA, 1960. 22 Sec.21 MPRA 2000, Sec.25 of the BRA, 2000 and Sec.28 of the BRA 1960. 23 Sec.22 MPRA 2000, Sec.26.BRA 2000 and Sec.29 BRA 1960. 24 Sec.30 MPRA 2000, Sec.34.BRA 2000 and Sec.37 BRA 1960.

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state on the High Court of the newly formed State25. The PRA, 1966 however establishes a common High Court for Punjab, Haryana and Chandigarh, amongst which Chandigarh is a Union Territory26.

The Acts also provide for the transfer of pending proceedings pertaining to the jurisdiction of the newly formed High Courts from the High Court of the residuary state. The Acts protect the right of the advocate of the residuary state to appear before the High Court of the Successor State with reference to the transferred proceedings27. With reference to the membership in the Bar Council the recently enacted BRA 200 and MPRA 2000 give an option for the existing members of the erstwhile Bar Council of the undivided State to exercise the option of opting for the membership of the Bar Council of the successor state within one year of the formation of the new state28. Since the PRA 1966 proposes a common High Court and Common Capital it has a deeming provision which makes all advocates who were members of the Bar Council of Punjab to be the members of the Bar Council of Punjab and Haryana29.

IV. Authorization of Expenditure and the Distribution of Revenues. a. Authorization of Expenditure30. This chapter begins with a transitionary provision whereby the Governor of the undivided State is empowered to authorize such expenditure from the Consolidated Fund of the newly formed state prior to the appointed date, pending such expenditure being sanctioned by the Legislative Assembly of the newly formed state . However the period of authorization of such sanction cannot exceed six months form the appointed date. It also vests a similar power on the Governor of the newly formed State post the appointed date to sanction any further expenditure, restricting the period of sanction to six months from the appointed date. b. Distribution of Revenues31:

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Sec.23 MPRA 2000, Sec. 27.BRA 2000 and Sec.30 BRA 1960. Sec. 20 PRA, 1966. 27 Sec.31 MPRA 2000, Sec. 35.BRA 2000 and Sec.38 BRA 1960 28 Sec.24 MPRA 2000 and Sec. 28 of the BRA 2000. 29 Sec. 31 PRA,1966. 30 Sec. 34 MPRA, 2000, Sec.42 PRA, 1966, Sec.38 BRA, 2000 and Sec.42 BRA, 1960. 31 Sec. 36 MPRA, 2000, Sec.46 PRA, 1966, Sec.40BRA, 2000 and Sec.45 BRA, 1960.

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The BRA 1960 and PRA 1966 specify the necessary statutory amendments as referred to in the corresponding schedule to the enactment so as to effect distribution of revenues. The recent MPRA 2000 and the BRA 2000 however state that the President of India shall by order determine the shares of the respective states in respect of total amount payable to the parent state as per the recommendation of a Finance Commission constituted under Article 280 of the Constitution of India.

V. Apportionment of Assets and Liabilities This Chapter refers to the apportionment of Assets and Liabilities of the undivided state prior to the appointed date32, these have been further categorized as land and goods , treasury and bank balances, arrears of taxes, right to recover loans and advances, investments and credits in certain funds, assets and liabilities of state undertakings, public debt, floating debt/loans, refund of taxes collected in excess, deposits etc , provident fund , pensions, contracts, liability in respect of actionable wrong, liability as guarantor, items in suspense etc a. Land and Goods33 The primary principle in terms of distribution of land and goods remains their territorial situation on the appointed date. Land in these enactments has been defined to include immovable property of every kind and any rights over such property. In all four instances the principle of territoriality has been adopted for the apportionment of land. The land within the territory of the newly formed state remains with the newly formed state. When it comes to goods as per the PRA 1966, BRA 200 and BRA 1960 the Central Government can step in to distribute them otherwise, however it is mandated to undertake the same as per the principles of equitable distribution.

It is only in the case of the MPRA 2000 that a proviso culling an exception to the general rule of principle of territoriality for land has been included. It states that land, stores, articles or other goods may be distributed otherwise (other than on principle of territoriality) between the successor states through mutual agreement between them. The provisio further states that failing such agreement the Central Government upon a request from the governments of successor states
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Sec. 37 MPRA, 2000, Sec.47 PRA, 1966, Sec.41 BRA, 2000 and Sec.46 BRA, 1960. Sec. 38 MPRA, 2000, Sec.48 PRA, 1966, Sec.42 BRA, 2000 and Sec.47 BRA, 1960.

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and upon consulting the governments of successor states can issue directions for the distribution of such land and goods. It is opined that since a provisio cannot negate the intent of the original clause , this would only be applicable to individual parcels of land for the sake of administrative convenience in course of transition. By no logic can the language of the provisio be interpreted to mean entire tracts of land or claim to Hyderabad or areas therein.

Stores held for specific purposes , such as use or utilization in particular institutions, workshops or undertakings or on particular works under construction shall pass to the state in whose territories such institutions , workshops , undertakings or works are located. Similarly the legislations provide for the methodology for the division of stores relating to the Secretariat and offices of Heads of Departments having jurisdiction over the entire undivided state. They also deal with unissued stores and one of the methodologies adopted is that of division as per the population ratio. Principles: Territoriality, Equitable Distribution and Proportionality i.e. as per population ratio. b. Treasury and Bank Balances34 The total cash balances in all the treasuries of the undivided State and the credit balances with the Reserve Bank of India , the State Bank of India or any other bank immediately prior to the appointed date shall be divided between the successor states as per their population ratio. Principle : Proportionality. c. Arrears of Taxes35 The right to recover arrears of any tax or duty on property, including arrears of land revenue, shall belong to the successor State in which the property is situated, and the right to recover arrears of any other tax or duty shall belong to the successor State in whose territories the place of assessment of that tax or duty is included on the appointed day. Principle: Territoriality. d. Right to recover loans and advances36

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Sec. 39 MPRA, 2000, Sec.49 PRA, 1966, Sec.43 BRA, 2000 and Sec.48 BRA, 1960. Sec. 40 MPRA, 2000, Sec.50 PRA, 1966, Sec.44 BRA, 2000 and Sec.49 BRA, 1960.

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The right of the undivided state to recover any loans or advances made before the appointed day to any local body, society, agriculturist or other person in an area within the undivided state shall belong to the newly formed State in which that area is included on that day. The right of the existing undivided state to recover any loans or advances made before the appointed day to any person or institution outside that State shall belong to the residuary state . Provided that any sum recovered in respect of any such loan or advance shall be divided between the residuary state and the newly formed state as per their population ratio. Principles. Right of recovery Territoriality. Distribution of recovered sums, due prior to division Proportionality. e. Investments and credits in certain funds37 The section dealing with the same amongst others states that the securities held in respect of the investments made from Cash Balances Investment Account or from any Fund in the Public Account of the undivided state would be apportioned in the ratio of population of the successor States. The investments of the existing undivided State immediately before the appointed day in any special fund the objects of which are confined to a local area would belong to the successor State in which that area is included on the appointed day.The investments of the undivided state immediately before the appointed day in any private, commercial or industrial undertaking, in so far as such investments have not been made or are deemed not to have been made from the Cash Balance Investment Account, shall pass to the successor State in which the principal seat of business of the undertaking is located. In this context it would be interesting to note that in the context of BRA 1960 the Cash Balance Investment Account of the said undivided state was to debited to the extent of Rs.10,000 crores to the State of Gujarat by an order of the Central Government , and it is only thereafter that the balance amount was divided between the successor states as per the population ratio. This amount was earmarked for Gujarat to construct a capital for that State. It may however be noted that in the context of Telangana and the residuary state of Andhra Pradesh the capital remains in

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Sec. 41 MPRA, 2000, Sec.51 PRA, 1966, Sec.45 BRA, 2000 and Sec.50 BRA, 1960. Sec. 42 MPRA, 2000, Sec.52 PRA, 1966, Sec.46 BRA, 2000 and Sec.51 BRA, 1960.

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a territory which is bound to get lesser proportion of the divided amount owing to the principle of proportionality. Also the Central Government has given an in principle assurance to provide the necessary financial assistance for the construction of a new capital. In the light of this political settlement there is no demand from the constituents of the residuary state for a disproportionate share in the division process owing to the requirement of construction of a new capital. f. Assets and Liabilities of State Undertakings38 The assets and liabilities relating to any undertaking of the existing undivided state whether directly owned or through a body corporate if exclusively located in the newly formed state, shall pass to the newly formed State. Where a depreciation reserve is maintained by the existing undivided state for such undertaking, the securities held in respect of investment made from that fund shall also pass to the newly formed state. Where any such undertaking is located in more than one successor State, the assets and liabilities and the securities referred above shall be divided in such manner as may be agreed upon between the successor States .In case of failure to reach or absence of an agreement, the same shall be divided as per the directions of the Central Government.

Principles: Territoriality and Equitable Distribution with the Central Government as a an impartial arbiter of interests. g. Public Debt39 The principle of proportionality governs the distribution of public debt. All liabilities on account of Public Debt and Public Account of the existing undivided state outstanding immediately before the appointed day shall be apportioned in the ratio of population of the successor States. The MPRA 2000 and the BRA 2000 state that the individual items of liabilities to be allocated to the successor States and the amount of contribution required to be made by one successor State to another shall be such as may be ordered by the Central Government in consultation with the Comptroller and Auditor- General of India. However , till such orders are issued, the liabilities
38 39

Sec. 43 MPRA, 2000, Sec.53 PRA, 1966, Sec.47 BRA, 2000 and Sec.53 BRA, 1960 Sec. 44 MPRA, 2000, Sec.54 PRA, 1966, Sec.48 BRA, 2000 and Sec.54 BRA, 1960

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on account of Public Debt and Public Account of the existing undivided state shall continue to be the liabilities of the residuary successor state (residuary state of Andhra Pradesh) and not the newly formed successor state (Telangana) . Principle: Proportionality. h. Floating Debt/Loan40 Acts have taken a divergent position on the same. Whereas the BRA 2000 and the BRA 1960 have adopted the principle of territoriality, the MPRA 2000 has taken a stand of division based on mutual agreement failing which the Central Government would be the arbiter of interests.

Phraseology pertaining to Territoriality The liability of the existing undivided state in respect of any floating loan to provide short- term finance to any commercial undertaking shall be the liability of the successor state in whose territories the undertaking is located.

Phraseology pertaining to mutual agreement or central arbitrage All liabilities of the existing undivided state of any floating loan to provide short term finance to any local body, body corporate or other institution shall be determined by mutual agreement between the successor States, failing which the Central Government shall determine such liability between the successor States in consultation with such States. i. Refund of taxes collected in excess41 The liability of the existing undivided State to refund any tax or duty on property, including land revenue, collected in excess shall be the liability of the successor State in whose territories the property is situated. The liability of the existing undivided state to refund any other tax or duty collected in excess shall be the liability of the successor State in whose territories the place of assessment of that tax or duty is included. Principle: Territoriality.

40 41

Sec. 45 MPRA, 2000, Sec.49 BRA, 2000 and Sec.55 BRA, 1960. Sec. 46 MPRA, 2000, Sec.55 PRA, 1966, Sec.50 BRA, 2000 and Sec.56 BRA, 1960.

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j. Deposits42 The liability of the existing undivided state in respect of any civil deposit or local fund deposit shall, as from the appointed day, be the liability of the successor State in whose area the deposit has been made. The liability of the existing undivided State in respect of any charitable or other endowment shall, as from the appointed day, be the liability of the successor State in whose area the institution entitled to the benefit of the endowment is located or of the successor State to which the objects of the endowment, under the terms thereof, are confined.

k. Provident Fund43 The liability of the undivided state in respect of the provident fund account of a Government servant in service on the appointed day shall be the liability of the successor State to which that government servant is permanently allotted. The PRA 1966 however also makes provision for the past liabilities an issue which is bound to arise in course of the negotiation process. The PRA 1966 states that the liability of the existing undivided state in respect of the provident fund account of a Government servant who has retired from service before the appointed day shall be the liability of the residuary Successor state (State of Andhra Pradesh) in the first instance and shall be adjusted between the successor States according to the population ratio. This approach may appear problematic in the first instance given the under representation of the residents of Telangana in the State Services . However it is being flagged as the same ought to be deliberated further. May be a Centrally mediated solution could be arrived at. My opinion however is to stick to the principle of proportionality and seek a one time grant from the Central Government to do good the disproportionate financial burden. Principles are only as effective as the consistency of their application. Principles : Current Liability - Territoriality. Past Liability Proportionality.

42 43

Sec. 47 MPRA, 2000, Sec.56 PRA, 1966, Sec.51 BRA, 2000 and Sec.57 BRA, 1960. Sec. 48 MPRA, 2000, Sec.57 PRA, 1966, Sec.52 BRA, 2000 and Sec.58 BRA, 1960

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l. Pensions44 The liability of the existing undivided state in respect of pensions would be apportioned between the successor States in accordance with the principles of territoriality and proportionality and have been more clearly delineated in the schedules appended to the

reorganization acts. Readers are advised to read the schedules mentioned in the relevant sections for a more detailed understanding of the said provision. Principles: Proportionality and Territoriality. m. Contracts45 All contracts made by the undivided state in the exercise of its executive power for any purposes of the State, shall be deemed to have been validly made on behalf of the successor states post the appointed date. The rights and liabilities arising out of the said contracts shall be deemed to be rights and liabilities of the successor states. This initial allocation of rights and liabilities shall be subject to financial adjustment as may be agreed upon between the successor States and in the absence of such agreement, as directed by the Central Government may. Principle: Continuation of contractual obligations. Negotiated agreement or Centrally mediated allocation of rights and liabilities. n.Liability in respect of actionable wrong46 When the undivided State is subject to any liability in respect of any actionable wrong other than breach of contract, that liability shall be the liability of the successor state in whose territory the cause of action arose. In any other instance it shall be firstly the liability of the residuary state (Andhra Pradesh), however shall be subject to such financial adjustment as may be agreed between the successor states. In the absence of such agreement the same shall be as directed by the Central Government. Principle: Territoriality or Negotiated Agreement or Centrally mediated allocation of rights and liabilities.

44 45

Sec. 49 MPRA, 2000, Sec.58 PRA, 1966, Sec.53 BRA, 2000 and Sec.59 BRA, 1960. Sec. 50 MPRA, 2000, Sec.59 PRA, 1966, Sec.54 BRA, 2000 and Sec.60 BRA, 1960. 46 Sec. 51 MPRA, 2000, Sec. 60 PRA, 1966, Sec.55 BRA, 2000 and Sec.61 BRA, 1960.

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o. Liability as guarantor47 Where the undivided state is liable as guarantor before the appointed date, in respect of any liability of a registered co- operative society or other person, the said liability shall be divided as per the territory of operation of such society or person in the successor states. In any other scenario it would be initially the liability of the residuary state (Andhra Pradesh) , subject to such financial adjustment as may be agreed upon between the States . In the absence of such agreement the same shall be as directed by the Central Government. Principle: Territoriality or Negotiated Agreement or Centrally mediated allocation of rights and liabilities. p. Items in suspense48 This is a section inserted in the enactments as a matter of abundant caution. If any item in suspense is ultimately found to affect an asset or liability of the nature referred to in any of the provisions discussed in the chapter pertaining to Apportionment of Assets and Liabilities then the same shall be dealt with in accordance with that provision. q. Residuary provision49 As in the case with the previous section this is a section inserted to cover any unforeseen circumstance. It states that the benefit or burden of any asset or liability of the existing undivided state not dealt with in the chapter pertaining to Apportionment of Assets and

Liabilities shall pass to the residuary successor state in the first instance, subject to such financial adjustment a may be agreed upon between both the successor . In the absence of such agreement the same shall be as directed by the Central Government. r. Apportionment of assets or liabilities by agreement50 This section confers a choice to the successor states to adopt a course of action other than that provided in the foregoing provisions of this Chapter and divide assets and liabilities through agreement to the exclusion of the methodology discussed below. However any such
47 48

Sec. 52 Sec. 53 49 Sec. 54 50 Sec. 55

MPRA, 2000, Sec. 61 PRA, 1966, Sec.56 BRA, 2000 and Sec.62 BRA, 1960. MPRA, 2000, Sec. 62 PRA, 1966, Sec.57 BRA, 2000 and Sec.63 BRA, 1960. MPRA, 2000, Sec. 63 PRA, 1966, Sec.58 BRA, 2000 and Sec.64 BRA, 1960. MPRA, 2000, Sec. 64 PRA, 1966, Sec.59 BRA, 2000 and Sec.65 BRA, 1960.

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apportionment as per the relevant sections has to be done through an agreement between the successor states.

In the authors opinion in the absence of requisite bargaining power it would be in the best interests of the negotiators on behalf of the Telangana State to stick to the provisions of this chapter rather than go for a negotiated agreement. The methodologies and the approach enumerated in this chapter if adhered to in letter and spirit are all geared towards equitable distribution. s. Power of Central Government to order allocation or adjustment in certain cases51. This clause deals with any subsequent claims which may be raised by the successor states to a maximum of three years from the appointed date and broadly reads as under :

Whenever a successor State becomes entitled to any property or obtains any benefits or becomes subject to any liability, and the Central Government is of opinion, on a reference made within a period of three years from the appointed day by any State that it is just and equitable that that property or those benefits should be transferred to, or shared with, one or more of the other successor States, or that a contribution towards that liability should be made by one or more of the other successor States, the said property or benefits shall be allocated in such manner, or the other successor State or States shall make to the State primarily subject to the liability such contribution in respect thereof, as the Central Government may, after consultation with State Governments concerned by order determine. t. Certain expenditure to be charged on the Consolidated Fund52 This is a section that deals with appropriation of moneys for the purpose of giving effect to the provisions of the Act. It states that all sums payable by either of the successor state to the other State or by the Central Government to either of the successor states, by virtue of the provisions of this Act, shall be charged on the Consolidated Fund of the State by which such sums are

51 52

Sec. 56 MPRA, 2000, Sec. 65 PRA, 1966, Sec.60 BRA, 2000 and Sec.66 BRA, 1960. Sec. 57 MPRA, 2000, Sec. 66 PRA, 1966, Sec.61 BRA, 2000 and Sec.67 BRA, 1960.

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payable or, as the case may be, the Consolidated Fund of India in the case of the Central Government.

VI. Provisions pertaining to State Corporations and certain State Institutions.

a. Provisions as to State Electricity Board, State Warehousing Corporation and State Road Transport Corporation53 This section deals with continuation of existing supply of service arrangements of the statutory corporations and boards in course of transition and the mode of division of assets post division of the State. Not all Acts have covered the Transportation Corporation (may be the then existing undivided state did not have one) but all three body corporate are of interest with reference to Andhra Pradesh. Whereas the Electricity Board as per the previous enactments was performing the generation, transmission and distribution functions, given the enactment of the Electricity Act , 2003 (the last reorganization was in the year 2000) and with the unbundling of the functions into companies dealing with generation, transmission and distribution, the principles extended to the public Electricity Board need to be extended to the private generating stations alongside the public sector ones owned by APGENCO and also the APTRANSCO and the five distribution companies, to the extent of continuing the existing generation , distribution and transmission commitments . Also as per the Electricity Act, 2003 the distribution companies are contractually bound to supply the requisite power to the consumer and the generators are in turn contractually bound to supply the agreed power to the distribution companies. However, it is opined that an order or direction from the Central Government to maintain status quo would help protect the legitimate interests of the Telangana consumers. The broad scope and extent of the said provision is described below.

Continuity of functioning : That the State Electricity Board, State Warehousing Corporation and the State Road Transport Corporation shall continue to function in those areas in respect of which they were functioning immediately before the appointed day , subject to certain directions issued by the Central Government .

53

Sec. 58 MPRA, 2000, Sec. 67 PRA, 1966, Sec.62 BRA, 2000 and Sec.68 BRA, 1960.

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Apportionment of assets, rights and liabilities: The said Boards or Corporations shall cease to function as from, and shall be deemed to be dissolved on such date as the Central Government may notify. Upon such dissolution their assets, rights and liabilities shall 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 the Corporation. In the absence of such agreement the same shall be as directed by the Central Government.

One another aspect of importance discussed in the MPRA 2000 and the BRA 2000 is the liability of the said existing Electricity Board relating to the unpaid dues of the coal supplied to the Board by any public sector coal company shall be provisionally apportioned between the State Electricity Boards constituted respectively in the successor States of the existing undivided state or after the date appointed for the dissolution of the Board , in such manner as may be agreed upon between the Governments of the successor States within one month of such dissolution. If no such agreement is reached the same shall be determined by the Central Government. The same could be applied to the existing public thermal generators and the private generators. This provision also provides for interest payments to the public sector coal company in case of delay in payments made, this would be important in terms of outstanding dues to Singareni Collieries Company Ltd on the appointed date. The section also provides for the successor new state to constitute Boards and entities on the lines of those whose assets are being divided so as to transfer the same to the newly constituted entities. In addition to the same the said section also makes certain arrangements as regards present employees of these entities. Readers are advised to take a closer look at the section across the reorganization Acts .

b. Continuance of arrangements in regard to generation and supply of electric power and supply of water54. If the Central Government is of the opinion that the arrangement with regard to the generation or supply of electric power or the supply of water for any area or in regard to the execution 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 is outside the State in which the power stations and other installations for the generation and supply of such power, or the catchment area, reservoirs and
54

Sec. 68 PRA, 1966, Sec.63 BRA, 2000 and Sec.69 BRA, 1960.

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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. Given the post Electricity Act , 2003 and the privatization of power generation , any new clause must also cover the private sector within the said obligations to continue supply (not withstanding the adequacy of the provisions of the Electricity Act, 2003 protecting the continuity of supply) c. Provisions as to State Financial Corporation55 Transitionary Provision : The State Financial Corporation of the undivided State continue to function in the areas in respect of which it was functioning immediately before the appointed date , subject to t to such directions as may from time to time, be issued by the Central Government after consultation with the Governments of the successor States.

Scheme for reconstitution, reorganization or distribution: The Board of Directors of the Corporation may, with the previous approval of the Central Government or if so required by the Central Government may convene a meeting for the consideration of a scheme for the reconstitution or reorganisation or dissolution, as the case may be, of the Corporation, including proposals regarding the formation of new Corporations, and the transfer thereto of the assets, rights and liabilities of the existing Corporation. If such a scheme is approved at the general meeting by a resolution passed by a majority of the shareholders present and voting, the scheme shall be submitted to the Central Government for its sanction.

If the scheme is sanctioned by the Central Government either without modifications or with modifications which are approved at a general meeting, the Central Government shall certify the scheme and would be binding on the corporations affected by the scheme as well as the shareholders and creditors .

If the scheme is not so approved at the general meeting

or sanctioned by

the Central

Government , the Central Government may refer the scheme to such Judge of the High Court of the residuary successor state (Andhra Pradesh) and the decision of the Judge in regard to he
55

Sec. 59 MPRA, 2000, Sec. 69 PRA, 1966, Sec.64 BRA, 2000 and Sec.70 BRA, 1960

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scheme shall be final and shall be binding on the corporations affected by the scheme as well as the shareholders and creditors .

However, the aforesaid provisions do not prevent the Government of the successor States from constituting, at any time on or after the appointed day, a State Financial Corporation for that State under the State Financial Corporation Act, 1951 (63 of 1951 ). d. General provisions as to statutory corporations56 Where any body corporate constituted under a Central Act, State Act or Provincial Act for the existing undivided State , becomes an inter-State body corporate. Such body corporate shall, on and from the appointed day, continue to function and operate in those areas in respect of which t was functioning and operating immediately before the appointed day. It shall be subject to such directions as may be issued by the Central Government, after consultation with the Governments of the successor States, until other arrangements are made by law with respect of the said body corporate. e. Provisions as to certain companies57 This section deals with certain state owned corporations or companies enumerated in the corresponding schedule or as reproduced in the section. It clarifies that not withstanding anything contained in the chapter, the scheduled companies shall function in the successor States even post the appointed date, until otherwise required as per law or as agreed between the successor states or direction issued by the Central Government . f. Temporary provisions as to continuance of certain existing road transport permits58 A permit granted immediately before the appointed day by the State Transport Authority of the undivided State or any Regional Transport Authority in that State and if such permit was , valid and effective in any area in the newly formed successor State, then such permit shall be deemed to continue to be valid and effective in that area. It shall not be necessary for any such permit to be countersigned by the State Transport Authority of the newly formed successor state or any
56 57

Sec. 62 MPRA, 2000, Sec. 72 PRA, 1966, Sec.66 BRA, 2000 and Sec.74 BRA, 1960 Sec. 60 MPRA, 2000, Sec. 73 PRA, 1966 and Sec.65 BRA, 2000 58 Sec. 63 MPRA, 2000, Sec. 74 PRA, 1966, Sec.67 BRA, 2000 and Sec.76 BRA, 1960

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Regional Transport Authority therein for the purpose of validating it for use in such area. However if required the Central Government may, after consultation with the successor 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.

No tolls, entrance fees or other charges shall be levied after the appointed day in respect of any transport vehicle for its operations in any of the successor States under 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 in the territory of the newly formed state . However if required the Central Government may, after consultation with the successor State Government or Governments concerned authorise the levy of any such toll, entrance fees or other charges. g. Special provisions as to income- tax59 Where the assets, rights and liabilities of any body corporate carrying on any business are transferred to any other bodies corporate which after the transfer carry on the same business, the losses or profits or gains sustained by the body corporate first mentioned which, but for such transfer, would have been allowed to be carried forward and set off in accordance with the provisions of Chapter VI of the Income- tax Act, 1961 (4 of 1961 ), shall be apportioned amongst the transferee bodies corporate in accordance with the rules to be made by the Central Government in this behalf and, upon such apportionment, the share of loss allotted to each transferee body corporate shall be dealt with in accordance with the provisions of Chapter VI of the said Act, as if the transferee body corporate had itself sustained such loss in a business carried on by it in the years in which these losses were sustained. h. Continuance of facilities in certain State institutions60 The Government of residuary successor State or the newly created successor State, shall continue to provide facilities to the people of the other State in the institutions contained in the schedule to the Act located in their respective States . The said provision of services shall not be less favorable than what were being provided to them before the appointed day, for such period and
59

Sec. 65 MPRA, 2000, Sec. 76 PRA, 1966, Sec.69 BRA, 2000 and Sec.78 BRA, 1960 Sec. 66 MPRA, 2000, Sec.77 PRA, 1966, Sec.70 BRA, 2000 and Sec.79 BRA, 1960.

60

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upon such terms and conditions as may be agreed upon between the two State Governments within a period of one year from the appointed day . If no agreement is reached within the said period of one year, then, as may be fixed by the Central Government.

VII. Provisions as to Central and State Services a. Provisions relating to All- India Services61 The statute creates two cadres for the successor States in place of the single cadre of the undivided State for the Indian Administrative Service, Indian Police Service and Indian Forest Service. The initial strength and composition of the State cadres shall be such as may be determined by the Central Government before the appointed date. b. Provisions relating to services in the Successor States and Other Services62 Every employee who immediately before the appointed day is serving in connection with the affairs of the undivided State, shall provisionally continue to serve in connection with the affairs of the undivided State unless he is required by order of the Central Government to serve provisionally in connection with the affairs of the newly formed State.

Post the appointed day, the Central Government shall by order, determine the successor State to which every person in the services of the undivided State be finally allotted for service and the date such allotment shall take effect or be deemed to have taken effect. Every employee who is finally allotted to a successor State shall, if he is not already serving therein be made available for serving in the successor State from such date as may be agreed upon between the Governments concerned . In the absence of such agreement as per the order of the Central Government. c. Provisions as to continuance of officers in same post63 Every employee who, immediately before the appointed day is holding or discharging duties in the undivided State and on the appointed day falls within any of the successor States shall
61 62

Sec. 67 MPRA, 2000, Sec.81 PRA, 1966, Sec.71 BRA, 2000 and Sec.80 BRA, 1960. Sec. 68 & 69 MPRA, 2000, Sec.82 PRA, 1966, Sec.72&73 BRA, 2000 and Sec.81 BRA, 1960. 63 Sec. 70 MPRA, 2000, Sec.83 PRA, 1966, Sec.74 BRA, 2000 and Sec.82 BRA, 1960.

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continue to hold the same post or office in that successor State, and shall be deemed to have been duly appointed to the post or office by the Government of or any other appropriate authority in, that successor State. d. Advisory Committees64 The Central Government may establish one or more Advisory Committees for the purpose of assisting it with regard to the discharge of any of its functions under this chapter i.e. Provisions as to Services. Such committee (s) would be expected to ensure fair and equitable treatment to all persons affected by the provisions of the present Chapter and the proper consideration of any representations made by such persons. e. Power of Central Government to give directions65 The Central Government may, give such directions to the State Governments of the successor States as may appear to it to be necessary for the purpose of giving effect to the provisions of the chapter and the successor State governments shall be required to comply with the same. f. Provisions as to State Public Service Commission66 g. Jurisdiction of the Commissions, Authorities and Tribunals67 This provision is unique to the MPRA 2000, however I found it of extreme utility, given its sweep and coverage of institutions not discussed in other enactments. This section amongst others, states that every Commission, Authority, Tribunal, University, Board or any other body constituted under a Central Act, State Act or Provincial Act and having jurisdiction over the existing undivided State shall on and from the appointed day continue to function in the successor residuary State and also exercise jurisdiction as existed before the appointed date over the newly formed successor State for a maximum period of two years from the appointed day or till such period as is decided by mutual agreement between the successor States. The successor State may during the said period may
64 65

Sec. Sec. 66 Sec. 67 Sec.

71 MPRA, 2000, Sec.82(4) PRA, 1966, Sec.75 BRA, 2000 and Sec.81 (4) BRA, 1960. 72 MPRA, 2000, Sec.84 PRA, 1966, Sec.76 BRA, 2000 and Sec.83 BRA, 1960. 73 MPRA, 2000, Sec.85 PRA, 1966, Sec.77 BRA, 2000 and Sec.84 BRA, 1960. 74 MPRA, 2000.

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(i) continue such body as a joint body for the successor States; or (ii) to abolish it, on the expiry of that period, for either of the successor States; or (iii) constitute a separate commission, Authority, Tribunal, University, Board or any other body, as the case may be, for the newly formed successor State , whichever is earlier.

VIII. Legal and Miscellaneous Provisions. a. Territorial extent of laws68 This provision has been inserted to avoid a legal vacuum and the need to re-legislate all the acts prevalent in the undivided State for the newly formed successor State. The Section states that there would be no change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the undivided State shall, until otherwise provided by a competent Legislature or other competent authority be constituted as meaning the territories within the then existing undivided State before the appointed day. b. Power to adapt laws69 This again is a facilitative provision. It confers the power to adapt laws on the Central (Union List) and State Governments made before the appointed date in relation to the successor States before the expiry of two years of the appointed date by order . Such an adaptation of the law could be either by way of repeal or amendment, as may be necessary or expedient. Thereafter every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent legislature or other competent authority. c. Power to construe laws70 This section states that any court, tribunal or authority, required or empowered to enforce such law may, for the purpose of facilitating its application in relation to the successor States, construe
68

Sec. 78 MPRA, 2000, Sec.88 PRA, 1966, Sec.84 BRA, 2000 and Sec.87 BRA, 1960. Sec. 79 MPRA, 2000, Sec.89 PRA, 1966, Sec.85 BRA, 2000 and Sec.88 BRA, 1960. Sec. 80 MPRA, 2000, Sec.90 PRA, 1966, Sec.86 BRA, 2000 and Sec.89 BRA, 1960.

69 70

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the law in such manner, without affecting the substance, as may be necessary or proper in regard to the matter before it. d. Power to name authorities, etc., for exercising statutory functions71 The Government of the newly formed successor State, as respects the transferred territory from the undivided State may, by notification in the Official Gazette, specify the authority, officer or person who, on or after the appointed day, be competent to exercise such functions exercisable under any law in force on that day as may be mentioned in that notification and such law shall have effect accordingly. e. Legal proceedings72 Where immediately before the appointed day, the existing undivided State is a party to any legal proceedings with respect to any property, rights or liabilities subject to apportionment between the successor States under this Act, the State which succeeds to, or acquires a share in, that property or those rights or liabilities shall be deemed to be substituted for the existing undivided State or added as a part to those proceedings, and the proceedings may continue accordingly. f. Transfer of pending proceedings73 Every proceeding pending immediately before the appointed day before a court (other than the High Court), tribunal, authority or officer in any area which on that day falls within the undivided State, shall if it is a proceeding relating exclusively to the territory, which is the territory of the newly formed successor State, stand transferred to the corresponding court, tribunal, authority or officer of that State.

If any question arises as to whether any proceeding should stand transferred as per this procedure , it shall be referred to the High Court of the residuary successor State and the decision of that High Court shall be final.

71 72

Sec. 81 MPRA, 2000, Sec.91 PRA, 1966, Sec.87 BRA, 2000 and Sec.90 BRA, 1960. Sec. 82 MPRA, 2000, Sec.92 PRA, 1966, Sec.88 BRA, 2000 and Sec.91 BRA, 1960. Sec. 83 MPRA, 2000, Sec.93 PRA, 1966, Sec.89 BRA, 2000 and Sec.92 BRA, 1960.

73

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g. Right of pleaders to practise in certain cases74 Any person who, immediately before the appointed day, is enrolled as a pleader entitled to practice in any subordinate courts in the undivided State shall, for a period of one year from that day continue to be entitled to practice in those courts, notwithstanding that the whole or any part of the territories within the jurisdiction of those courts has been transferred to the newly formed successor State . h. Effect of provisions of the Act inconsistent with other laws75. This section asserts the overriding nature of the reorganization Act. It says that the provisions of the Act shall have effect notwithstanding anything inconsistent contained in any other law. i. Power to remove difficulties76 If any difficulty arises in giving effect to the provisions of this Act, the President may, by order, do anything not inconsistent with such provisions which appears to him to be necessary or expedient for the purpose of removing the difficulty.

74 75

Sec. 84 MPRA, 2000, Sec.94 PRA, 1966, Sec.90 BRA, 2000 and Sec.93 BRA, 1960. Sec. 85 MPRA, 2000, Sec.95 PRA, 1966, Sec.91 BRA, 2000 and Sec.94 BRA, 1960. 76 Sec. 86 MPRA, 2000, Sec.96 PRA, 1966, Sec.92 BRA, 2000 and Sec.95 BRA, 1960.

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