Vol. 13 · pages 261–265

operation of a Union railway, shall be less by the amount of the tax than the price charged to other consumers of a substantial quantity of electricity. Exemption of the Governments of States in respect of Union taxa- tion 266. Subject as hereinafter provided, the Govern- ment of a State shall not be liable to Union taxation in respect of lands or buildings situate within the territory of India, or income accruing, arising or received within such territory: 5 Provided that— (a) where a trade or business of any kind is carried on by or on behalf of the Govern- ment of a State, nothing in this article shall exempt that Government from any Union tax or the levy of a sum in lieu of such tax in respect of that trade or business or any operations connected therewith, or any income arising in con- nection therewith, or any property occupied for the purposes thereof; 10 15 (b) nothing in this article shall exempt the Ruler of any State for the time being specified in Part III of the First Schedule from any Union tax in respect of lands, buildings or income being his personal property or personal income. 20 26 Explanation.—For the purposes of this article, any operations incidental to the ordinary functions of the Government of a State, such as, the sale of the forest produce of any forest under the control of the Government of a State or of any article produced in any jail within a State, shall not be deemed to be a trade or business carried on by or on behalf of the Government of the State. 30 Adjustments in respect of certain expenses and pensions. 267. Where under the provisions of this Consti- tution the expenses of any court or Commission, or pensions payable to or in respect of a person who has served before the commencement of this Constitution under the Crown in India, are charged on the revenues of India or the revenues of a State for the time being specified in Part I of the First Schedule, then if— 35 40 260 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 228 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES

(a) in the case of a charge on the revenues of India, the court or Commission serves any of the separate needs of a State so speci- fied, or the person has served wholly or in part in connection with the affairs of such a State; or 5 (b) in the case of a charge on the revenues of a State so specified, the court or Commission serves any of the separate needs of the Union or another State so specified, or the person has served wholly or in part in connection with the affairs of the Union or another such State, 10 there shall be charged on and paid out of the revenues of the State or, as the case may be, the revenues of India or of the other State, such contribution in respect of expenses or pensions as may be agreed, or as may in default of agreement be determined by an arbitrator to be appointed by the Chief Justice of India. 15 20 CHAPTER II—Borrowing Borrowing by the Government of India. 268. The executive power of the Union extends to borrowing upon the security of the revenues of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed. 25 Borrowing by States. 269. (1) Subject to the provisions of this article, the executive power of a State for the time being specified in Part I of the First Schedule extends to borrowing within the territory of India upon the security of the revenues of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed. 30 35 (2) The Government of India may, subject to such conditions, if any, as it may think fit to impose, make loans to States for the time being specified in Part I THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 261 229THE DRAFT CONSTITUTION

or Part III of the First Schedule or so long as any limits fixed under the last preceding article are not exceeded, give guarantees in respect of loans raised by any such State and any sums required for the purpose of making such loans shall be charged on the revenues of India. 5 (3) A State for the time being specified in Part I or Part III of the First Schedule may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or its predecessor Government or in respect of which a guarantee has been given by the Government of India or by its predecessor Government. 10 A consent under this clause may be granted sub- ject to such conditions, if any, as the Government of India may think fit to impose. 15 CHAPTER Ill—Property, Contracts, Liabilities and Suits Succession to assets and debts, rights and liabilities 270. As from the commencement of this Constitu- tion, the Government of India and the Government of each State for the time being specified in Part I of the First Schedule shall respectively be the successors of the Government of the Dominion of India and of the corresponding Governors’ Provinces as regards all property, assets and liabilities subject to any adjustment made or to be made by reason of the creation before the commencement of this Constitu- tion of the Dominion of Pakistan or of the Provinces of West Bengal, East Bengal, West Punjab and East Punjab. 20 25 30 Property ac- cruing by escheat or lapse or as bona vacantia 271. Subject as hereinafter provided, any pro- perty in the territory of India except the States for the time being specified in Part III of the First Schedule which, if this Constitution had not come into operation, would have accrued to His Majesty by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a State for the time being specified in Part I of the First Schedule, vest in such State for the purposes of 35 40 262 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 230 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES

the Government of that State, and shall, in any other case, vest in the Union for the purposes of the Government of India: Provided that any property which at the date when it would have so accrued to His Majesty was in the possession or under the control of the Government of India or the Government of a State for the time being specified in Part I of the First Schedule shall, according as the purposes for which it was then used or held were purposes of the Union or of a State so specified, vest in the Union for the purposes of the Government of India or in the State for the purposes of the Government of that State. 5 10 Power to acquire property 272. (1) The executive power of the Union and of each State for the time being specified in Part I of the First Schedule shall extend, subject to any Act of the appropriate Legislature, to the grant, sale, disposition or mortgage of any property held for the purposes of the Union or of such State, as the case may be, and to the purchase or acquisition of property for those purposes respectively, and to the making of contracts. 15 20 (2) All property acquired for the purposes of the Union or of a State for the time being specified in Part I of the First Schedule shall vest in the Union or any such State, as the case may be. 25 Contracts. 273. (1) All contracts made in the exercise of the executive power of the Union or of a State for the time being specified in Part I of the First Schedule shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of pro- perty made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise. 30 35 (2) Neither the President, nor the Governor of a State, shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing such contract or assurance on behalf of any of them be personally liable in respect thereof. 40 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 263 231THE DRAFT CONSTITUTION

Suits and proceedings. 274. (1) The Government of India may sue or be sued by the name of the Government of India and the Government of a State for the time being speci- fied in Part I of the First Schedule may sue or be sued by the name of the State and may, subject to any provisions which may be made by Act of Parlia- ment or by the Legislature of such State, enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding Provinces might have sued or been sued if this Constitution had not been enacted. 5 10 (2) If at the date of commencement of this Constitution— (a) any legal proceedings are pending to which the Dominion of India is a party, the Government of India shall be deemed to be substituted for the Dominion in those proceedings; and 15 (b) any legal proceedings are pending to which a Province is a Party, the corresponding State shall be deemed to be substituted for the Province in those proceedings. 20 264 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 232 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES