Section 59(1) in The Punjab Reorganisation Act, 1966
(1)Where before the appointed day the existing State of Punjab 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, exclusively purposes of any one of the successor States, - of that State; and(b)if the purposes of the contract are, on and from that day, not exclusively purposes of any one of the successor States, - of the State of Punjab, 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 Punjab, be rights or liabilities of the successor State or, as the case may be, the State of Punjab specified above :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 all the successors States concerned, or in default of such agreement, as the Central Government may by order direct.
