(1) All contracts, agreements and other instruments of whatever nature subsisting or having effect immediately before the appointed day and to which a local authority referred to in sub-section (1) of section 18 is a party or which are in favour of such local authority shall in so far as they relate to the Fire Service of the local authority be of as full force and effect against or in favour of the State Government, as the case may be, and may be enforce or acted upon as fully and effectually as if, instead of the local authority, the State Government had been a party thereto or as if they had been entered into or issued in favour of the State Government.
(2) If on the appointed day any suit, appeal or other legal proceeding of whatever nature is pending by or against a local authority referred to in sub-section (1) of section 18, then, in so far as it relates to the Fire Service of such local authority, it shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer of the assets and liabilities of the local authority in so far as they relate to such Fire Service, but the suit, appeal or other proceeding may be continued, prosecuted or enforced by or against the State Government.