Contracts to continue unless terminated by the State Government

(1) Every contact entered into by an educational institution for any service, sale or supply, and in force immediately before the appointed day, shall, unless terminated under sub-section (2) within a period of two years from the appointed day continue to be in full force and effect against or in favour of the State Government. (2) The State Government may if it is of opinion that any contract referred to in sub-section (1) is unduly onerous or has been entered into in bad faith or is detrimental to the interest of the Government by order in writing, either terminate such contract or make such alteration or notifications therein as it may think fit: Provided that the State Government shall not terminate any contract or may make alterations or modifications therein except after giving to the parties to the contract a reasonable opportunity of being heard and except after recording in writing its reasons for such termination alteration or modifications as the case may be.