The States Reorganisation Act,1956
Section 108. Continuance of agreements and arrangements relating to certain irrigation, power or multi-purpose projects
(1) Any agreement or arrangement entered into between the Central Government and one or more existing States or between two or more existing States relating to-
(a) The administration, maintenance and operation of any project executed before the appointed day, or
(b) The distribution of benefits, such as, the right to receive and utilise water or electric power, to be derived as a result of the execution of such project,
which was subsisting immediately before the appointed day shall continue in force, subject to such adaptations and modifications, if any (being of a character not affecting the general operation of the agreement or arrangement) as may be agreed upon between the Central Government and the successor State concerned or between the successor States concerned, as the case may be, by the 1st day of November,1957, or, if no agreement is reached by the said date, as may be made therein by order of the Central Government.
(2) Where a project concerning one or more of the existing States affected by the provisions of Part II has been taken in hand, but not completed, or has been accepted by the Government of India for inclusion in the Second Five Year Plan before the appointed day, neither the scope of the project nor the provisions relating to its administration, maintenance or operation or to the distribution of benefits to be derived from it shall be varied,-
(a) In the case where a single successor State is concerned with the project after the appointed day, except with the previous approval of the Central Government, and
(b) In the case where two or more successor States are concerned with the project after that day, except by agreement between those successor States, or if no agreement is reached, except in such manner as the Central Government may by order direct,
and the Central Government may from time to time give such directions as may appear to it to be necessary for the due completion of the project and for its administration, maintenance and operation thereafter.
(3) In this section, the expression “project” means a project for the promotion of irrigation, water supply or drainage or for the development of electric power or for the regulation or development of any inter-State river or river valley.
