42. Application of Part.—(1) The provisions of this Part shall apply in relation to the apportionment
of the assets and liabilities of the existing State of Uttar Pradesh immediately before the appointed day.
(2) The successor States shall be entitled to receive benefits arising out of the decisions taken by the
predecessor State and the successor States shall be liable to bear the financial liabilities arising out of the
decisions taken by the existing State of Uttar Pradesh.
(3) The apportionment of assets and liabilities would be subject to such financial adjustment as may
be necessary to secure just, reasonable and equitable apportionment of the assets and liabilities amongst
the successor States.
(4) Any dispute regarding the amount of financial assets and liabilities shall be settled through mutual
agreement, failing which by order by the Central Government on the advice of the Comptroller and
Auditor-General of India.
43. Land and goods.—(1) Subject to the other provisions of this Part, all land and all stores, articles
and other goods belonging to the existing State of Uttar Pradesh shall,—
(a) if within the transferred territory, pass to the State of Uttaranchal; or
(b) in any other case, remain the property of the State of Uttar Pradesh:
Provided that where the Central Government is of opinion that any goods or class of goods should be
distributed among the States of Uttar Pradesh and Uttaranchal, otherwise than according to the situation
of the goods, the Central Government may issue such directions as it thinks fit for a just and equitable
distribution of the goods and the goods shall pass to the successor States accordingly:
Provided further that in case of any dispute relating to the distribution of any goods or class of goods
under this sub-section, the Central Government shall endeavour to settle such dispute through mutual
agreement arrived at between the Governments of the successor States for that purpose, failing which the
Central Government may, on request by any of the Governments of the successor States, after consulting
both the Governments of the successor States, issue such direction as it may deem fit for the distribution
of such goods or class of goods, as the case may be, under this sub-section.
(2) Stores held for specific purposes, such as use or utilisation in particular institutions, workshops or
undertakings or on particular works under construction, shall pass to the successor States in whose
territories such institutions, workshops, undertakings or works are located.
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(3) Stores relating to the Secretariat and offices of Heads of Departments having jurisdiction over the
whole of the existing State of Uttar Pradesh shall be divided between the successor States in accordance
with such directions as the Central Government may, after consultation with the Government of each
successor States, think fit to issue for a just and equitable distribution of such stores.
(4) Any other unissued stores of any class in the existing State of Uttar Pradesh shall be divided
between the successor States in proportion to the total stores of that class purchased in the period of three
years prior to the appointed day, for the territories of the existing State of Uttar Pradesh included
respectively in each of the successor States:
Provided that where such proportion cannot be ascertained in respect of any class of stores or where
the value of any class of such stores does not exceed rupees ten thousand, that class of stores shall be
divided between the successor States according to the population ratio.
(5) In this section, the expression “land” includes immovable property of every kind and any rights in
or over such property, and the expression “goods” does not include coins, bank notes and currency notes.
44. Treasury and bank balances.—The total of the cash balances in all treasuries of the State of
Uttar Pradesh and the credit balances of the State with the Reserve Bank of India, the State Bank of India
or any other bank immediately before the appointed day shall be divided between the States of Uttar
Pradesh and Uttaranchal according to the population ratio:
Provided that for the purposes of such division, there shall be no transfer of cash balances from any
treasury to any other treasury and the apportionment shall be effected by adjusting the credit balances of
the two States in the books of the Reserve Bank of India on the appointed day:
Provided further that if the State of Uttaranchal has no account on the appointed day with the Reserve
Bank of India, the adjustment shall be made in such manner as the Central Government may, by order,
direct.
45. Arrears of taxes.—The right to recover arrears of the 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.
46. Right to recover loans and advances.—(1) The right of the existing State of Uttar Pradesh to
recover any loans or advances made before the appointed day to any local body, society, agriculturist or
other person in an area within that State shall belong to the successor State in which that area is included
on that day.
(2) The right of the existing State of Uttar Pradesh to recover any loans or advances made before the
appointed day to any person or institution outside that State shall belong to the State of Uttar Pradesh:
Provided that any sum recovered in respect of any such loan or advance shall be divided between the
States of Uttar Pradesh and Uttaranchal according to the population ratio.
47. Investments and credits in certain funds.—(1) The securities held in respect of the investments
made from Cash Balances Investment Account or from any Fund in the Public Account of the existing
State of Uttar Pradesh as specified in the Seventh Schedule shall be apportioned in the ratio of population
of the successor States:
Provided that the securities held in investments made from the Calamity Relief Fund of the existing
State of Uttar Pradesh shall be divided in the ratio of the area of the territories occupied by the successor
States:
Provided further that the balance in the Reserve Funds in the Public Account of Uttar Pradesh created
wholly out of appropriations from the Consolidated Fund of the existing State of Uttar Pradesh, to the
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extent the balances have not been invested outside Government account, shall not be carried forward to
similar Reserve Funds in the Public Account of the successor States.
(2) The investments of the existing State of Uttar Pradesh immediately before the appointed day in
any special fund, the objects of which are confined to a local area, shall belong to the State in which that
area is included on the appointed day.
(3) The investments of the existing State of Uttar Pradesh 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 Balances Investment Account, shall pass to the State in
which the principal seat of business of the undertaking is located.
(4) Where any body corporate constituted under a Central Act, State Act or Provincial Act for the
existing State of Uttar Pradesh or any part thereof has, by virtue of the provisions of Part II, become an
inter-State body corporate, the investments in, or loans or advances to, any such body corporate by the
existing State of Uttar Pradesh made before the appointed day shall, save as otherwise expressly provided
by or under this Act, be divided between the States of Uttar Pradesh and Uttaranchal in the same
proportion in which the assets of the body corporate are divided under the provisions of this Part.
48. Assets and liabilities of State undertakings.—(1) The assets and liabilities relating to any
commercial or industrial undertaking of the State of Uttar Pradesh shall pass to the State in which the
undertaking is located.
(2) Where a depreciation reserve fund is maintained by the State of Uttar Pradesh for any such
commercial or industrial undertaking, the securities held in respect of investments made from that fund
shall pass to the State in which the undertaking is located.
49. Public Debt.—(1) All liabilities on account of Public Debt and Public Account of the existing
State of Uttar Pradesh outstanding immediately before the appointed day shall be apportioned in the ratio
of population of the successor States unless a different mode of apportionment is provided under the
provisions of this Act.
(2) 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:
Provided that till such orders are issued, the liabilities on account of Public Debt and Public Account
of the existing State of Uttar Pradesh shall continue to be the liabilities of the successor State of Uttar
Pradesh.
(3) The liability on account of loan raised from any source and re-lent by the existing State of Uttar
Pradesh to such entities as may be specified by the Central Government and whose area of operation is
confined to either of the successor States shall devolve on the respective States as specified in
sub-section (4).
(4) The public debt of the existing State of Uttar Pradesh attributable to loan taken from any source
for the express purpose of re-lending the same to a specific institution and outstanding immediately
before the appointed day shall,—
(a) if re-lent to any local body, body corporate or other institution in any local area, be the debt of
the State in which the local area is included on the appointed day; or
(b) if re-lent to the Uttar Pradesh Power Corporation Limited, the Uttar Pradesh Jal Vidyut Nigam
Limited, the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, the Uttar Pradesh State Road
Transport Corporation, or the Uttar Pradesh Housing Board or any other institution which becomes an
inter-State institution on the appointed day, be divided between the States of Uttar Pradesh and
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Uttaranchal in the same proportion in which the assets of such body corporate or institution are
divided under the provisions of Part VII.
(5) Where a sinking fund or a depreciation fund is maintained by the existing State of Uttar Pradesh
for repayment of any loan raised by it, the securities held in respect of investments made from that fund
shall be divided between the successor States of Uttar Pradesh and Uttaranchal in the same proportion in
which the total public debt is divided between the two States under this section.
(6) In this section, the expression “Government security” means a security created and issued by a
State Government for the purpose of raising a public loan and having any of the forms specified in, or
prescribed under, clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).
50. Floating Debt.—The liability of the State of Uttar Pradesh in respect of any floating loan to
provide short-term finance to any commercial undertaking shall be the liability of the State in whose
territories the undertaking is located.
51. Refund of taxes collected in excess.—The liability of the existing State of Uttar Pradesh 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, and the liability of the existing State of Uttar
Pradesh 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.
52. Deposits, etc.—(1) The liability of the existing State of Uttar Pradesh in respect of any civil
deposit or local fund deposit shall, as from the appointed day, be the liability of the State in whose area
the deposit has been made.
(2) The liability of the existing State of Uttar Pradesh in respect of any charitable or other endowment
shall, as from the appointed day, be the liability of the State in whose area the institution entitled to the
benefit of the endowment is located or of the State to which the objects of the endowment, under the
terms thereof, are confined.
53. Provident fund.—The liability of the existing State of Uttar Pradesh in respect of the provident
fund account of a Government servant in service on the appointed day shall, as from that day, be the
liability of the State to which that Government servant is permanently allotted.
54. Pensions.—The liability of the existing State of Uttar Pradesh in respect of pensions shall pass to,
or be apportioned between, the successor States of Uttar Pradesh and Uttaranchal in accordance with the
provisions contained in the Eighth Schedule to this Act.
55. Contracts.—(1) Where, before the appointed day, the existing State of Uttar Pradesh has made
any contract in the exercise of its executive power for any purposes of the State, that contract shall be
deemed to have been made in the exercise of the executive power—
(a) if the purposes of the contract are, on and from the appointed day, exclusive purposes of either
of the successor States of Uttar Pradesh and Uttaranchal; and
(b) in any other case, of the State of Uttar Pradesh,
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 or liabilities of the existing State of Uttar Pradesh, be rights
or liabilities of the State of Uttaranchal or the State of Uttar Pradesh, as the case may be:
Provided that in any such case as is referred to in clause (b), the initial allocation of rights and
liabilities made by this sub-section shall be subject to such financial adjustment as may be agreed upon
between the successor States of Uttar Pradesh and Uttaranchal or in default of such agreement, as the
Central Government may, by order, direct.
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(2) For the purposes of this section, there shall be deemed to be included in the liabilities which have
accrued or may accrue under any contract—
(a) any liability to satisfy an order or award made by any court or other tribunal in proceedings
relating to the contract; and
(b) any liability in respect of expenses incurred in or in connection with any such proceedings.
(3) This section shall have effect subject to the other provisions of this Part relating to the
apportionment of liabilities in respect of loans, guarantees and other financial obligation; and bank
balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt
with under those provisions.
56. Liability in respect of actionable wrong.—Where, immediately before the appointed day, the
existing State of Uttar Pradesh is subject to any liability in respect of any actionable wrong other than
breach of contract, that liability shall,—
(a) if the cause of action arose wholly within the territories which, as from that day, are the
territories of either of the successor States of Uttar Pradesh or Uttaranchal, be a liability of that
successor State; and
(b) in any other case, be initially a liability of the State of Uttar Pradesh, but subject to such
financial adjustment as may be agreed upon between the States of Uttar Pradesh and Uttaranchal or,
in default of such agreement, as the Central Government may, by order, direct.
57. Liability as guarantor.—Where, immediately before the appointed day, the existing State of
Uttar Pradesh is liable as guarantor in respect of any liability of a registered co-operative society or other
person, that liability of the existing State of Uttar Pradesh shall,—
(a) if the area of operations of such society or persons is limited to the territories which, as from
that day, are the territories of either of the States of Uttar Pradesh or Uttaranchal, be a liability of that
successor State; and
(b) in any other case, be initially a liability of the State of Uttar Pradesh, subject to such financial
adjustment as may be agreed upon between the States of Uttar Pradesh and Uttaranchal or, in default
of such agreements, as the Central Government may, by order, direct.
58. Items in suspense.—If any item in suspense is ultimately found to affect an asset or liability of
the nature referred to in any of the foregoing provisions of this Part, it shall be dealt with in accordance
with that provision.
59. Residuary provision.—The benefit or burden of any asset or liability of the existing State of
Uttar Pradesh not dealt with in the foregoing provisions of this Part shall pass to the State of Uttar
Pradesh in the first instance, subject to such financial adjustment as may be agreed upon between the
States of Uttar Pradesh and Uttaranchal or, in default of such agreement, as the Central Government may,
by order, direct.
60. Apportionment of assets or liabilities by agreement.—Where the successor States of Uttar
Pradesh and Uttaranchal agree that the benefit or burden of any particular asset or liability should be
apportioned between them in a manner other than that provided for in the foregoing provisions of this
Part, notwithstanding anything contained therein, the benefit or burden of that asset or liability shall be
apportioned in the manner agreed upon.
61. Power of Central Government to order allocation or adjustment in certain cases.—Where,
by virtue of any of the provisions of this Part, any of the successor States of Uttar Pradesh and
Uttaranchal 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 either of the States, that it is just and equitable that property or those benefits should be
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transferred to, or shared with, the other successor State, or that a contribution towards that liability should
be made by the other successor State, the said property or benefits shall be allocated in such manner
between the two States, or the other State shall make to the State subject to the liability such contribution
in respect thereof, as the Central Government may, after consultation with the two State Governments, by
order, determine.
62. Certain expenditure to be charged on Consolidated Fund.—All sums payable either by the
State of Uttar Pradesh or by the State of Uttaranchal to the other States or by the Central Government to
either of those States, by virtue of the provisions of this Act, shall be charged on the Consolidated Fund of
the State by which such sums are payable or, as the case may be, the Consolidated Fund of India.