38. Provision as to certain financial Corporations.—(1) As from the appointed day, the Financial
Corporation constituted under the State Financial Corporations Act, 1951 (63 of 1951), for the State of
Andhra Pradesh shall be deemed to have been constituted for that State with its area as altered by the
provisions of Part II of this Act.
(2) As from the appointed day, the Madras Industrial Investment Corporation constituted for the State
of Madras shall be deemed to have been constituted for that State with its area as altered by the provisions
of Part II of this Act.
39. Amendment of Act 6 of 1942.—In the Multi-Unit Co-operative Societies Act, 1942, in
section 5A, in sub-section (1), for the words and figures “any co-operative society which, immediately
before the 1st day of November, 1956”, the words “or any other enactment relating to reorganisation of
States, any co-operative society which, immediately before the day on which the reorganisation takes
place” shall be substituted.
40. Provisions as to State Electricity Boards and apportionment of their assets and
liabilities.—(1) As from the appointed day, the State Electricity Boards constituted under the Electricity
(Supply) Act, 1948 (54 of 1948), for the States of Andhra Pradesh and Madras shall be deemed to have
been constituted for those States with their areas as altered by the provisions of Part II of this Act.
(2) The undertakings and assets of a State Electricity Board referred to in sub-section (1), situated in
the territories specified in the First Schedule or, as the case may be, the Second Schedule shall, as from
the appointed day, pass to the State to which the territories are transferred.
(3) Subject to the provisions of sub-section (2), the assets and liabilities of the State Electricity
Boards referred to in sub-section (1) shall be apportioned between them in such manner as may be agreed
upon between the Governments of Andhra Pradesh and Madras within one year from the appointed day,
or in default of such agreement, as the Central Government may by order determine.
(4) Notwithstanding anything contained in sub-section (2), the arrangement which, immediately
before the appointed day, was in force in regard to the generation or supply of electric power for the
territories specified in the First Schedule or the Second Schedule shall continue to be in force after the
appointed day on such terms and conditions and for such period as may be agreed upon between the
Governments of Andhra Pradesh and Madras, or, in default of such agreement, as the Central
Government may by order direct.
41. Special provisions with regard to Araniar Project.—(1) Notwithstanding anything contained in
this Act, all rights and liabilities of the State of Madras in relation to the Araniar Project or the
administration thereof shall, on the appointed day, be the rights and liabilities of the States of Andhra
Pradesh and Madras, subject to such adjustments as may be made by agreement entered into by the said
States or, if no such agreement is entered into within a period of one year from the appointed day, as the
Central Government may by order determine having regard to the purposes of the Project, and any such
order may provide for the management of the Project jointly by the said States or otherwise:
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Provided that the order so made by the Central Government may be varied by any subsequent
agreement entered into by the States of Andhra Pradesh and Madras.
(2) An agreement or order referred to in sub-section (1) shall provide also for the rights and liabilities
of the States of Andhra Pradesh and Madras in relation to any extension or further development of the
Project after the appointed day.
(3) The rights and liabilities referred to in sub-sections (1) and (2) shall include—
(a) the rights to receive and to utilise water which may be available for distribution as a result of
the Project; and
(b) the rights and liabilities in respect of the administration of the Project and the construction,
maintenance and operation thereof,
but shall not include the rights and liabilities under any contract entered into before the appointed day by
the Government of Madras.
(4) The Central Government may, from time to time, give such directions as may appear to it
necessary generally in regard to any of the matters specified in the foregoing provisions of this section
and, in particular, for the completion of the Project and its operation and maintenance thereafter:
Provided that no such direction shall be issued or have effect after an agreement has been entered into
by the States of Andhra Pradesh and Madras under sub-section (1) or after an order has been made by the
Central Government under that sub-section, whichever is earlier.
42. Temporary provisions as to the continuance of certain existing road transport permits.—
Notwithstanding anything contained in section 63 of the Motor Vehicles Act, 1939 (4 of 1939), a permit
granted by the State Transport Authority of Andhra Pradesh or Madras or by any Regional Transport
Authority in such State shall, if such permit was immediately before the appointed day valid and effective
in any area within the transferred territories, be deemed to continue to be valid and effective in that area
after that day subject to the provisions of that Act as for the time being in force in that area; and it shall
not be necessary for any such permit to be countersigned by the State Transport Authority or any
Regional Transport Authority in the State to which the territories are transferred for the purpose of
validating it for use in such area:
Provided that the Central Government may, after consultation with the State Government, add to,
amend or vary the conditions attached to the permit by the authority by which the permit was granted.
43. Provisions relating to services.—(1) Every person who, immediately before the appointed day,
is serving in connection with the affairs of Andhra Pradesh or Madras shall, as from that day, continue so
to serve, unless he is required by general or special order of the Central Government to serve
provisionally in connection with the affairs of the other State.
(2) As soon as may be after the appointed day, the Central Government shall, by general or special
order, determine the State to which every person provisionally allotted to Andhra Pradesh or Madras shall
be finally allotted for service and the date from which such allotment shall take effect or be deemed to
have taken effect.
(3) Every person who is finally allotted under the provisions of sub-section (2) to Andhra Pradesh or
Madras shall, if he is not already serving therein, be made available for serving in that State from such
date as may be agreed upon between the two State Governments or in default of such agreement, as may
be determined by the Central Government.
(4) Nothing in this section shall be deemed to affect, after the appointed day, the operation of the
provisions of Chapter I of Part XIV of the Constitution in relation to the determination of the conditions
of service of persons serving in connection with the affairs of Andhra Pradesh or Madras:
Provided that the conditions of service applicable immediately before the appointed day to the case of
any person provisionally or finally allotted to Andhra Pradesh or Madras under this section shall not be
varied to his disadvantage except with the previous approval of the Central Government.
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(5) The Central Government may at any time before or after the appointed day give such directions to
either State Government as may appear to it to be necessary for the purpose of giving effect to the
foregoing provisions of this section and the State Government shall comply with such directions.
44. Provisions as to the continuance of officers in the same posts.—Every person who,
immediately before the appointed day, is holding or discharging the duties of any post or office in
connection with the affairs of Andhra Pradesh or Madras in any area which on that day falls within the
other State shall continue to hold the same post or office in the State in which such area is included on
that day and shall be deemed as from that day to have been duly appointed to that post or office by the
Government of, or other appropriate authority in, such State:
Provided that nothing in this section shall be deemed to prevent the competent authority, after the
appointed day, from passing in relation to such person any order affecting his continuance in such post or
office.