Mandatory takeover permission under industrial law cannot be denied by preferring a rival revival scheme on merits.

Where the Central Government had formed the statutory opinion after investigation under section 15A that the industrial undertaking could be restarted and that restart was needed for public supply, the High Court accepted that the jurisdictional requirement under section 18FA(1) was satisfied. Once those preconditions were met, section 18FA(2) was treated as mandatory, so the Court could not refuse takeover permission by preferring the sponsors' rival revival scheme on merits. The sponsors' proposal was also found commercially doubtful and unworkable, while the Government's takeover proposal was supported by the investigation material. Permission for takeover was therefore granted and the undertaking was directed to be handed over in accordance with the statutory procedure.

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Issues: (i) Whether the High Court had jurisdiction to grant permission under section 18FA(1) of the Industries (Development and Regulation) Act, 1951, on the basis of the Central Government's opinion formed after investigation under section 15A; (ii) Whether the Court could refuse permission by preferring the sponsors' revival scheme over the Union Government's proposal to take over the textile undertaking.

Issue (i): Whether the High Court had jurisdiction to grant permission under section 18FA(1) of the Industries (Development and Regulation) Act, 1951, on the basis of the Central Government's opinion formed after investigation under section 15A.

Analysis: The statutory conditions for action under section 18FA(1) were treated as the existence of a formed opinion by the Central Government that the undertaking could be run or restarted and that restart was needed for maintaining or increasing production of articles required by the general public. The Court accepted the Government's affidavit and the investigative material as sufficient proof that such opinion had been formed and rejected the challenge that jurisdiction was absent.

Conclusion: The High Court had jurisdiction to entertain and decide the Union Government's application.

Issue (ii): Whether the Court could refuse permission by preferring the sponsors' revival scheme over the Union Government's proposal to take over the textile undertaking.

Analysis: The Court held that once the statutory preconditions under section 18FA were satisfied, section 18FA(2) imposed a mandatory duty to grant permission for takeover, leaving no room to compare rival proposals on merits. Even on a comparative assessment, the sponsors' scheme was found unworkable, uncertain, and commercially doubtful, while the Government's proposal was supported by the investigation report and practical considerations regarding restarting the unit.

Conclusion: The Court rejected the sponsors' rival scheme and held that permission for takeover by the Union Government had to be granted.

Final Conclusion: The Union Government's takeover application succeeded, the sponsors' scheme failed, and the textile undertaking was directed to be handed over to the authorised person in accordance with the statutory procedure.

Ratio Decidendi: Where the Central Government has validly formed the opinion required by section 18FA(1) after investigation under section 15A, the High Court must grant permission under section 18FA(2), and it cannot substitute or prefer an alternative revival scheme on merits.

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