The general principle in this regard is that concessionary contract terminates upon chang­ing of the sovereignty which results in the extinction of state, unless the successor state renews these concessionary contracts. However, If only part of the state is succeeded by another sovereign, and concessionary contract relates to the remaining part, then the contract will not lapse.

In the case of Premchibbar Vs. Union of India, AIR 1966 SC 442. The Indian Government rejected the applica­tion of a former Portuguese citizen for the extension of license granted to him by Portuguese govern­ment, the Supreme Court of India held. “In such a case the residents of territories did not carry with them the rights which they possessed as subject of the ex-sovereign and that as subject of the new sovereign they had only such rights as are granted or recognised by him so far as the relations between subject and the sovereign are concerned.”