Effect of excluding area from municipal area

(1) When, by reason of a notification under section 3 the limits of a municipal area are contracted to exclude therefrom any area forming part thereof, if the area so excluded is immediately placed under the control of some other local authority such portion of the Municipal Fund and property vesting in the Municipality and such portion of the liabilities of the Municipality as the Administrator may direct, shall be transferred to that other local authority, or, if the area so excluded is not immediately placed under the control of any other local authority such portion of the Municipal Fund and property vesting in the Municipality shall vest in the Government. and such portion of the liabilities of the Municipalities shall be transferred by the Government, as the Administrator may direct. (2) When by reason of a notification under section 3 any municipal area ceases to be a municipal area then, if the area comprised therein is immediately placed under the control of some other local authority, the Municipal Fund and property vesting in the Municipality shall vest in, and the liabilities of the Municipality shall be transferred to, such other local authority, or, if the area is not immediately placed under the control of another local authority, such fund and property shall vest in the Government and the liabilities of the Municipalities shall be transferred to the Government.