45Contracts

(1) Where before the appointed day, the Union has made any contract in the exercise of its executive power for any purposes of the existing Union territory that contract shall be deemed to have been made in the exercise of the executive power of the State of Goa,—

(a) if the purposes of the contract are, on and from the appointed day, exclusively purposes of that State; and

(b) if the purposes of the contract are, on and from that day, not exclusively purposes of any area in the districts of Daman and Diu of the existing Union territory,

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 Union, be rights or liabilities of the State of Goa:

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 adjustments as may be agreed upon between the State of Goa and the Union or in default of such agreement, as the Central Government may, by order, direct.

(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 obligations.