Where a Panchayat is divided and re-organised, its assets and liabilities shall vest in and be transferred to the Panchayats established in its place. The Deputy Commissioner shall divide the assets and liabilities as per sub-section (4) of section 200, in the following manner, namely:-
(a) Sabha fund shall be determined on the date of bifurcation or re-organisation of Panchayats and shall be distributed between the Panchayats in proportion to their population:
Provided that the Grant-in-aid sanctioned to the Panchayat by the Government before re-organisation or bifurcation will be divided between the re-organised or bifurcated Gram Sabhas in such a way that the Grant-in-aid for the scheme falling in a Panchayat will be given to that Panchayat.
Explanation.- If some schemes wherein progress in the Panchayat before re-organisation/bifurcation same schemes have fallen in the jurisdiction of the other Panchayat, the whole of grant-in-aid or so much of it which remains to be utilised, will be transferred to the Panchayat in whose jurisdiction the scheme falls.
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(b) If division of moveable assets is viable, it shall be divided between the re-organised/bifurcated Gram Sabhas on the basis of their percentage of population, and if the division of the movable assets is not viable, in that event the State Government shall give Grant-in-aid to the newly created Gram Sabha, the amount of which will be determined by the Deputy Commissioner.
(c) The immovable property shall remain with the Panchayat in whose jurisdiction it is situated after re-organisation/bifurcation of the Sabha area. But the Gram Panchayat affected thereby shall be compensated by giving share in the movable property commensurate with the value of the immovable property to which it is entitled. In case the affected Panchayat cannot be compensated by the other Panchayat due to non-availability of adequate movable property, in that event, the State Government shall give such amount of compensation to the affected Panchayat which may be determined by the Deputy Commissioner.
(d) Income generating assets shall remain with that Panchayat in which these are situated after re-organisation/bifurcation of Sabha areas, but the net income accrued from such assets shall be divided between the Panchayats in proportion to their population unless one time settlement can take place.
(e) Liabilities of the bifurcated/re-organised Gram Panchayat will be shared in proportion to their population provided that if the liability is due to immovable assets the same shall lie on that Panchayat in whose jurisdiction that immovable property is situated.