(1) All property and assets situated in, or used for, or in connection with the administration of, the Naga Hills-Tuensang Area and vested in the Union immediately before the appointed day (other than any property or assets so vested for purposes of the Union) shall, as from that day, vest in the State of Nagaland:
     Provided that the cash balances in the treasuries in the Naga Hills-Tuensang Area immediately before the appointed day shall, as from that day, vest in the State of Nagaland.
     (2) All rights, liabilities and obligations of the Central Government, whether arising out of any contract or otherwise, which are, immediately before the appointed day, the rights, liabilities and obligations of the Central Government arising out of or in connection with the administration of the Naga Hills-Tuensang Area shall, as from that day, be the rights, liabilities and obligations of the Government of the State of Nagaland.