The States Reorganisation Act,1956
Section 89. Liability as guarantor of co-operative society
Where, immediately before the appointed day, an existing State is liable as guarantor in respect of any liability of a registered co-operative society, that liability of the existing State shall-
(a) If there be only one successor State, be a liability of that State;
(b) If there be two or more successor States and the area of the society’s operations is limited to the territories which as from that day are the territories of one of them, be a liability of that successor State; and
(c) In any other case, be a liability of the principal successor State:
Provided that in any such case as is referred to in clause (c), the initial allocation of liabilities under this section shall be subject to such financial adjustment as may be agreed upon between all the successor States, or in default of such agreement, as the Central Government may by order direct.