(1) The body known as the Bombay State Road Transport Corporation and the Board thereof, referred to in the notification of the Government of Bombay, No. 1780/5, dated the 16th November, 1949 (hereinafter referred to as "the existing corporation" and "Board" respectively) shall, notwithstanding any defect in, or invalidity of, the enactment or order under which they were constituted, be deemed for all purposes to have been validly constituted as if all the provisions of the said notification had been included and enacted in this section and this section had been in force continuously on and from the said date, and accordingly--
         (a) all action by, and all transactions with, the existing Corporation or Board, including any action or transaction by which any property, asset or right was acquired or any liability or obligation, whether by contract or otherwise, was incurred, shall be deemed to have been validly and lawfully taken or done; and
         (b) no suit, prosecution or other legal proceeding shall lie against the Government of Bombay or any member of the Board or any officer or servant of the existing Corporation in respect of any action taken by, or in relation to the setting up of, the existing Corporation or Board merely on the ground of any defect in, or invalidity of, the enactment or order under which the existing Corporation or Board was constituted.
     (2) On the establishment of a Corporation under section 3 in the State of Bombay (hereinafter referred to as "the new Corporation"),--
         (a) the existing Corporation and Board shall be deemed to be dissolved and shall cease to function;
         (b) all property and assets vesting in the existing Corporation shall vest in the new Corporation;
         (c) all rights, liabilities and obligations of the existing Corporation, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations, respectively, of the new Corporation; and
         (d) all licences and permits granted to, all contracts made with, and all instruments executed on behalf of, the existing Corporation or Board shall be deemed to have been granted to, made with, or executed on behalf, of, the new Corporation and shall have effect accordingly.