Reorganisation statutes must harmonise facility continuity with asset apportionment; territorial location alone does not confer exclusive control.

Section 75 of the Andhra Pradesh Reorganisation Act, 2014 was held not to exclude apportionment of assets and liabilities under the Act's separate scheme. The Court read the statute as a whole, holding that continuance of facilities must be harmonised with the apportionment provisions so that no part becomes redundant. It further held that territorial location alone did not justify exclusive control over the council's funds or assets; post-bifurcation collections from Andhra Pradesh districts could not be appropriated by Telangana, while pre-bifurcation assets required equitable division. The freezing of the accounts was therefore unlawful.

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Issues: (i) Whether Section 75 of the Andhra Pradesh Reorganisation Act, 2014 governing continuance of facilities in specified State institutions could be read as excluding apportionment of assets and liabilities of those institutions. (ii) Whether the freezing of the bank accounts of the Andhra Pradesh State Council of Higher Education and the claim of exclusive control by the Telangana State Council of Higher Education were legally sustainable, including in relation to post-bifurcation collections and pre-bifurcation assets.

Issue (i): Whether Section 75 of the Andhra Pradesh Reorganisation Act, 2014 governing continuance of facilities in specified State institutions could be read as excluding apportionment of assets and liabilities of those institutions.

Analysis: The scheme of the Reorganisation Act, 2014 separates continuance of facilities under Section 75 from the distinct regime of apportionment of assets and liabilities under Part VI. Reading Section 75 as conferring exclusive ownership on the institution located in Telangana would make the apportionment provisions, especially Sections 47 and 64, redundant. The Act had to be construed as a whole so that each provision receives effect and the bifurcation operates equitably between the successor States.

Conclusion: Section 75 did not exclude apportionment of assets and liabilities, and the contrary view was rejected.

Issue (ii): Whether the freezing of the bank accounts of the Andhra Pradesh State Council of Higher Education and the claim of exclusive control by the Telangana State Council of Higher Education were legally sustainable, including in relation to post-bifurcation collections and pre-bifurcation assets.

Analysis: The complete takeover of the council's assets by the Telangana Council merely because the office was situated in Hyderabad was inconsistent with the Reorganisation Act, 2014. The Court held that funds collected after bifurcation from the districts falling within the successor State of Andhra Pradesh could not be appropriated by Telangana, while assets existing up to the date of bifurcation were to be divided in the population ratio contemplated by Section 2(h), subject to mutual agreement or appropriate central determination. On that basis, the freezing of the accounts was not legally tenable.

Conclusion: The freezing of the bank accounts was unlawful, the claim of exclusive control was rejected, and the Andhra Pradesh State Council of Higher Education was entitled to operate its accounts to the extent of the amounts collected post-bifurcation for the Andhra Pradesh districts.

Final Conclusion: The impugned common judgment was set aside, the appeals were allowed, and the assets and funds of the erstwhile council were held to require equitable division under the Reorganisation Act, 2014 rather than exclusive vesting in the Telangana Council.

Ratio Decidendi: In construing a State Reorganisation statute, provisions dealing with continuance of facilities for institutions must be harmonised with the provisions on apportionment of assets and liabilities, and territorial location alone does not confer exclusive ownership over the institution's assets or funds.

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