Section 4(3) in Karnataka Municipal Corporations Act, 1976
(3)Save as otherwise provided in this Act or any other law for the time being in force, when a local area is excluded from the [larger urban area] [Substituted by Act 35 of 1994 w.e.f. 1.6.1994.],-(i)the rights and liabilities of the corporation in such area shall vest in Government; and(ii)Government shall, after consulting the corporation, determine what portion of the corporation fund and other property of the corporation shall vest in Government for the benefit of the inhabitants of such local area and how the liabilities of the corporation shall be apportioned between the corporation and Government.
