The Swadeshi Cotton Mills Company Limited (Acquisition and Transfer of Undertakings) Act,1986
Section 26. Contracts to cease to have effect unless ratified by National Textile Corporation
Every contract, entered into by the company in relation to any textile undertaking which has vested in the National Textile Corporation under sub-section (2) of section 3, for any service, sale or supply and in force immediately before the appointed day, shall, on and from the expiry of a period of one hundred and eighty days from the date on which the Ordinance was promulgated, case to have effect unless such contract is, before the expiry the period ratified in writing by the National Textile Corporation and in ratifying such contract, the National Textile Corporation may make such alterations or modifications therein as it may think fit:
Provided that the National Textile Corporation shall not omit to ratify a contract and shall not make any alteration or modification in a contract-
(a) Unless it is satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to the interests of the textile undertaking concerned, and
(b) Expect after giving the parties to the contract a reasonable opportunity of being heard and expect after recording in writing its reasons for refusal to ratify the contract or for making any alternation or modification therein.