54. Public debt.-
(1) The public debt of the State of Bombay attributable to loans raised by the issue of Government securities and outstanding with the public immediately before the appointed day shall, as from that day, be the debt of the State of Maharashtra:
(a) the State of Gujarat shall be liable to pay to the State of Maharashtra its share of the sums due from time to time for the servicing and repayment of the debt; and
(b) for the purpose of determining the said share, the debt shall be deemed to be divided between the States of Maharashtra, and Gujarat as if it were a debt referred to in sub-section (2) or sub-section (3), as the case may be.
(2) The public debt of the State of Bombay attributable to loans taken from the Central Government, the National Co-operative Development and Warehousing Board or the Khadi and Village Industries Commission or from any other source for the express purpose of re-lending the same to a specific institution and outstanding immediately before the appointed day shall,-
(a) if re-lent to any local body, body corporate or other institution in any local area, be the debt of the State in which the local area is included on the appointed day; or
(b) if re-lent to the Bombay State Electricity Board, the Bombay State Road Transport Corporation, or the Bombay Housing Board or any other institution which becomes an inter-State institution on the appointed day, be divided between the States of Maharashtra and Gujarat in the same proportion in which the assets of such body corporate or institution are divided under the provisions of Part VII.
(3) The remaining public debt of the State of Bombay attributable to loans taken from the Central Government, the Reserve Bank of India or any other body corporate and outstanding immediately before the appointed day shall be divided between the States of Maharashtra and Gujarat in proportion to the total expenditure on all capital works and other capital outlays incurred or deemed to have been incurred up to the appointed day in the territories included respectively in each of those States:
Provided that for the purposes of such division, only the expenditure on assets for which capital accounts have been kept shall be taken into account.
Explanation.-Where any expenditure on capital works or other capital outlays cannot be allocated between the territories included in the States of Maharashtra and Gujarat, such expenditure shall, for the purposes of this sub-section, be deemed to have been incurred in those territories according to the population ratio.
(4) Where a sinking fund or a depreciation fund is maintained by the State of Bombay for repayment of any loan raised by it, the securities held in respect of investments made from that fund shall be divided between the States of Maharashtra and Gujarat in the same proportion in which the total public debt is divided between the two States under this section.
Explanation.-For the purposes of this sub-section, the fund in the public account of the State of Bombay known as the Debt Redemption and Avoidance Fund shall be deemed to be a sinking fund.
(5) The share of the State of Gujarat in the liability on account of public debt apportioned under sub-section (3) shall be reduced by 1,419 lakhs of rupees and the share of the State of Maharashtra in such liability shall be correspondingly increased.
(6) In this section, the expression "Government security" means a security created and issued by a State Government for the purpose of raising a public loan and having any of the forms specified in, or prescribed under clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944).