(1) The following bodies corporate constituted for the existing State of Uttar Pradesh, namely:—
         (a) the Uttar Pradesh Power Corporation Limited, the Uttar Pradesh Jal Vidyut Nigam Limited and the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited;
         (b) the Uttar Pradesh Electricity Regulatory Commission; and
         (c) the State Warehousing Corporation established under the Warehousing Corporations Act, 1962 (58 of 1962),
shall, on and from the appointed day, continue to function in those areas in respect of which they were functioning immediately before that day, subject to the provisions of this section and to such directions as may, from time to time, be issued by the Central Government.
     (2) Any directions issued by the Central Government under sub-section (1) in respect of the Power Corporation, Commission or Warehousing Corporation shall include a direction that the Act under which the Power Corporation, Commission or Warehousing Corporation was constituted shall, in its application to that Power Corporation, Commission or Warehousing Corporation, have effect subject to such exceptions and modifications as the Central Government thinks fit.
     (3) The Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1) shall cease to function as from, and shall be deemed to be dissolved on such date as the Central Government may, by order, appoint; and upon such dissolution, its assets, rights and liabilities shall be apportioned between the successor States of Uttar Pradesh and Uttaranchal in such manner as may be agreed upon between them within one year of the dissolution of the Power Corporation, Commission or Warehousing Corporation, as the case may be, or if no agreement is reached, in such manner as the Central Government may, by order, determine:
     Provided that any liabilities of any of the said Power Corporations referred to in clause (a) of sub-section (1) relating to the unpaid dues of the coal supplied to the Power Corporation by any public sector coal company shall be provisionally apportioned between the corresponding Power Corporations constituted respectively in the successor States of the existing State of Uttar Pradesh or after the date appointed for the dissolution of the Power Corporation under this sub-section in such manner as may be agreed upon between the Governments of the successor States within one month of such dissolution or if no agreement is reached, in such manner as the Central Government may by order determine subject to reconciliation and finalisation of the liabilities which shall be completed within three months from the date of such dissolution by the mutual agreement between the successor States or failing such agreement by the direction of the Central Government:
     Provided further that an interest at the rate of two per cent. higher than the cash credit interest shall be paid on outstanding unpaid dues of the coal supplied to the Electricity Corporation by the public sector coal company till the liquidation of such dues by the concerned State Power Corporation constituted in the successor States on or after the date appointed for the dissolution of the Power Corporation under this sub-section.
     (4) Nothing in the preceding provisions of this section shall be construed as preventing the Government of the State of Uttar Pradesh or, as the case may be, the Government of the State of Uttaranchal from constituting, at any time on or after the appointed day, a State Power Corporation, an Electricity Regulatory Commission or a State Warehousing Corporation for the State under the provisions of this Act relating to such Power Corporation, Commission or Warehousing Corporation; and if such a Power Corporation, Commission or Warehousing Corporation is so constituted in either of the States before the dissolution of the Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1),—
         (a) provision may be made by order of the Central Government enabling the new Power Corporation, new Commission or the new Warehousing Corporation to take over from the existing Power Corporation, Commission or Warehousing Corporation all or any of its undertakings, assets, rights and liabilities in that State, and
         (b) upon the dissolution of the existing Power Corporation, Commission or Warehousing Corporation,—
             (i) any assets, rights and liabilities which would otherwise have passed to that State by or under the provisions of sub-section (3) shall pass to the new Board, new Commission or the new Warehousing Corporation instead of to that State;
             (ii) any employee who would otherwise have been transferred to or re-employed by that State under sub-section (3), read with clause (i) of sub-section (5), shall be transferred to or re-employed by the new Power Corporation, new Commission or the new Warehousing Corporation instead of to or by that State.
     (5) An agreement entered into between the successor States under sub-section (3) and an order made by the Central Government under that sub-section or under clause (a) of sub-section (4) may provide for the transfer or re-employment of any employee of the Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1),—
         (i) to or by the successor States, in the case of an agreement under sub-section (2) or an order made under that sub-section;
         (ii) to or by the new Power Corporation, new Commission or the new Warehousing Corporation constituted under sub-section (4), in the case of an order made under clause (a) of that sub-section,
and, subject to the provisions of section 68, also for the terms and conditions of service applicable to such employees after such transfer or re-employment.