Dadra and Nagar Haveli became the seventh Union Territories of the Union of India under the tenth amendment of the Indian Constitution, formally recognised as the Constitution (Tenth amendment) Act, 1961. They were amended by amending the First Schedule of the constitution. Also, it amended clause (1) of article 240 of the Constitution to also include the Union territory of Dadra and Nagar Haveli in order to enable the President to "make regulations for the harmony, development and better government of the territory". Retroactively, on 11 August 1961 the 10th Amendment took effect.
KG Badlani an IAS Officer was chosen as Prime Minister of Free Dadra and Nagar Haveli for 1 day in 1961 to ink an Agreement with Prime Minister Jawaharlal Nehru to officially integrate Dadra and Nagar Haveli with the Republic of India. On 31 December, 1974, the Treaty on Recognition of the Sovereignty of India over Goa, Daman, Diu, Dadra and Nagar Haveli was concluded between India and Portugal.
On 10 June 1783 on the basis of the Treaty of Friendship signed by Maratha Navy on 17 December 1779 the Portuguese capture Nagar Haveli as revenge for the damage done by the Portuguese frigate. Dadra was purchased by the Portuguese in 1785. The Portuguese Governor of Daman administered it until 1954.
Since India's independence in 1947, the Dadra and Nagar Haveli people rejected Portuguese rule in the region in 1954 with assistance from volunteers of organizations such as the United Goans (UFG), Rashtriya Swayamsevak Sangj (RSS), the NMLO and Azad Gomantak Dal. Though de facto independent, Dadra & Nagar Haveli remained internationally recognised as Portuguese territories (e.g. by the International Court of Justice). The citizens of the former colonies called for administrative help from the Government of India. As the Administrator, KG Badlani, Indian Administrative Service Officer, was sent. The area was administered by the Varishta Panchayat of Free Dadra and Nagar Haveli from 1954 to 1961.
In 1961, Badlani had been declared Prime Minister of Dadra and Nagar Haveli for one day, as Indian troops took over the Goa, Daman, and Diu, to sign an agreement with Prime minister Jawaharlal Nehru, as a Head of State, the arrangement to unite Nagar Haveli and Dadra officially with the Republic of India.
Introduced in Lok Sabha in 1961, on 11 August 1961, the Constitution (10th amendment) bill, 1961 (bill no. 43 of 1961). This was proposed, to change Article 240 and the First Schedule of the Constitution, by Laxmi Menon, former Deputy Minister of External Affairs. The full text of the declaration of aims and purposes annexed to the proposal is provided below:
The citizens and the Free Dadra and Nagar Haveli Varishta Panchayat have consistently stated that they are asking the Government of India that the territories they are correct to join the Union of India, where they belong. Recently, this appeal was expressed in Varishta Panchayat's formal resolution of 12 June 1961.
The government agreed that these regions were part of the Union of India, in violation of the desires of the citizens of Free Dadra and Nagar Haveli, for the merger of their regions with the Union of India.
According to the then Prime Minister of India Pandit Jawaharlal Nehru in "The Constitution (Tenth Amendment) Bill, 1961"-
Such areas would be clearly specified by Dadra and Nagar Haveli as territories of the State, by amending the Constitution's first Schedule. To order to allow stability, change and effective governance legislation for the President of the country, it has also been suggested to modify Section 240 of the Constitution to include the EU's territories of Dadra and Nagar Haveli. This policy is being introduced in the Act
The resolution was debated by the Sabha Lok on 14 August 1961 and adopted in the original form. On 16 August 1961, it was taken into account and approved by Rajya Sabha. The draft was approved on 16 August 1961 by then President Rajendra Prasad and notified on 17 August 1961 in The Gazette of India. This came into effect retroactively on 11 August 1961. Dadra and Nagar Haveli shall constitute a seventh Union Territory of the Union in the First Schedule of the Constitution. Article 240(1) was amended by it to include Dadra and Nagar Haveli as union territories in order to enable the President to make stability, development and good governance regulations for the region.