Where, immediately before the appointed day, the State of Andhra Pradesh or Madras is liable as guarantor in respect of any liability of a registered co-operative society, that liability shall,— (a) if the area of the society's operations is limited to the transferred territories, be a liability of the State to which the territories are transferred; and (b) in any other case, continue to be a liability of the State which, immediately before that day, was subject to such liability.

Where, immediately before the appointed day, the State of Andhra Pradesh or Madras is liable as guarantor in respect of any liability of a registered co-operative society, that liability shall,— (a) if the area of the society's operations is limited to the transferred territories, be a liability of the State to which the territories are transferred; and (b) in any other case, continue to be a liability of the State which, immediately before that day, was subject to such liability.