122. (1) When by reason of a notification under section 3 any local area ceases to be a Municipality and is immediately placed under the control of some other local authority, such portion of the municipal fund and other property vesting in the Municipality shall vest in that other local authority and such portion of the liabilities of the Municipality shall be transferred to that other local authority, as the [by the State Government] after consulting the Municipality and that other local authority, declares by notification.
(2) When, in like manner, any local area ceases to be included in a municipality and is not immediately placed under the control of some other local authority, such portion of the municipal fund and other property vesting in the Municipality shall vest in [the State Government] and such portion of the liabilities of the Municipality shall be transferred to [the State Government] as the [State Government], after consulting the Municipality and considering any representations made by the inhabitants of the excluded area, declares by notification.
(3) Provided that where an excluded local area is placed under the control of a local authority not existing at a date previous to the exclusion, the [State Government] before making a declaration under sub-section (1), shall take into consideration any representation made by the inhabitants of the excluded area.
(4) Provided also that the foregoing provisions of this section shall not apply in any case where the circumstances, in the opinion of the [State Government], render undesirable the transfer of any portion.