(1) As from the commencement of this Constitution —

 

(a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of the First Schedule shall vest in the Union, if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and

 

(b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Government of India relating to any of the matters enumerated in the Union List,

 

subject to any agreement entered into in that behalf by the Government of India with the Government of that State.

 

(2) Subject as aforesaid, the Government of each State specified in Part B of the First Schedule shall, as from the commencement of this Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in clause (1).

Debate Summary

 

Draft Article 270A (Article 295, of India 1950) was not included in the Draft Constitution 1948. It was introduced by the Drafting Committee Chairman on 13 October 1949. Draft Article 270A dealt with the property and assets of Princely States. It stated that all assets, property and contractual rights and obligations of Princely States would be transferred to the Union government after the commencement of the Constitution. 

 

One Member wanted Parliament to approve this transfer in order to ‘maintain the final authority of Parliament’.  

 

The Assembly rejected this amendment without any debate and adopted the Draft Article 270A  on the same day.