28Public debt

(1) The public debt of Bihar attributable to loans raised by the issue of Government securities and outstanding with the public immediately before the appointed day shall continue to be the debt of Bihar:

Provided that—

(a) West Bengal shall be liable to pay to Bihar a share of the sums due from time to time for the servicing and repayment of the public debt; and

(b) for the purpose of determining the said share, the said debt shall be deemed to be divided between Bihar and West Bengal as if it were a debt referred to in sub-section (2).

(2) The public debt of Bihar attributable to loans taken from the Central Government, the Reserve Bank of India or any other bank before the appointed day shall be divided between Bihar and West Bengal in proportion to the total expenditure on all capital works and other capital outlays incurred up to the appointed day in the territories of Bihar excluding the transferred territories and in the transferred territories, respectively:

Provided that for the purposes of such division, only expenditure on assets for which capital accounts have been kept shall be taken into account.

(3) Where a sinking fund or depreciation fund is maintained by Bihar for the repayment for any loan raised by it, the securities held in respect of investments made from that fund shall be divided between Bihar and West Bengal in the same proportion as the public debt referred to in sub-section (2).

(4) In this section, the expression "Government security means a security created and issued for the purpose of raising a public loan and having any of the forms specified or prescribed under clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).