Judicial review of FIPB approval is limited to illegality, irrationality, or procedural impropriety under the press notes.

Judicial review of FIPB approval is confined to illegality, irrationality, or procedural impropriety. Press Note No. 1 (2005 Series) required prior approval where a foreign investor had an existing venture in the same field, and Press Note No. 3 (2005 Series) tied that field to the 4-digit NIC 1987 Code. On the agreements and business plan, the existing collaboration was confined to seat belt manufacture and the Board recorded safeguards to protect the Indian partner, so a different possible view on the collaboration's scope did not justify interference.

---

---

Issues: Whether the approval granted by the Foreign Investment Promotion Board for Takata's new wholly owned subsidiary violated Press Note No. 1 (2005 Series) and Press Note No. 3 (2005 Series) by permitting activity in the same field, and whether the approval was vitiated by an error in the decision-making process.

Analysis: Press Note No. 1 (2005 Series) required prior approval where a foreign investor already had an existing venture or collaboration in the same field, and Press Note No. 3 (2005 Series) clarified that the same field was to be understood by reference to the 4-digit NIC 1987 Code. The relevant inquiry was whether the new proposal would jeopardize the interests of the existing Indian partner or joint venture. On the agreements, business plan, and surrounding facts, the existing collaboration was confined to seat belt manufacture, and the Board recorded safeguards and additional commitments to protect the Indian partner's interests. In judicial review, the Court did not sit in appeal over the administrative decision and could interfere only for illegality, irrationality, or procedural impropriety. As a different view on the scope of the collaboration was possible, the Board's decision could not be struck down merely because another interpretation was also plausible.

Conclusion: The approval was not contrary to the press notes and was not shown to suffer from any reviewable infirmity; the challenge failed.

Final Conclusion: The writ petition was dismissed and the impugned approval was sustained.

Ratio Decidendi: In judicial review of FIPB approval, the Court will not substitute its own view on the scope of a collaboration if the authority has applied the correct policy test and taken into account the protection of the existing partner's interests, unless the decision is illegal, irrational, or procedurally improper.

---