Finance, Property, Contracts
(1) The Union government can sue/be sued as "Union of India"; a State government can sue/be sued as "State of [X]" - each in the same kinds of cases the pre-Constitution Dominion/Provincial or princely-state government could have, subject to any Parliament/State Legislature law. (2) Pending legal proceedings involving the pre-Constitution Dominion of India, a Province, or a princely state are deemed to substitute the corresponding new government as the party.
This confirms governments can be sued in court like any other legal entity - the Union as "Union of India" and each state as "State of [name]" - rather than governments being immune from ordinary lawsuits, while ensuring legal proceedings that were already pending at independence smoothly continued against the appropriate successor government.
This is why a citizen can file a lawsuit naming "Union of India" or "State of Maharashtra" as the defendant when suing the government over a contractual or other legal dispute - the government is a suable legal entity, not immune from ordinary civil litigation.