After takeover of an undertaking, under section 18FD of the Industries (Development and Regulation) Act, 1951, state the circumstances for taking the decision by the Central Government either to sell the undertaking as a

Section 18FD of the Industries (Development and Regulation) Act, 1951, provides two alternatives to the Central Government upon receipt of the report from the authorised person after the takeover of an undertaking. The Central Government can either decide to sell the undertaking as a running concern or to prepare a scheme for the reconstruction of the company. Circumstances for the decision to sell the undertaking as a running concern: The Central Government may take the decision to sell the undertaking as a running concern on being satisfied that: In the case of a company owning the industrial undertaking, which is not being wound up by the High Court: Its financial conditions and other circumstances are such that it is not in a position to meet the current liabilities out of its current assets, and the interest of the general public makes it expedient to sell the undertaking as a running concern. In such a situation, proceedings for winding up of the company by the High Court should also be started simultaneously. In the case of an undertaking concerned owned by a company and is being wound up by the High Court: Its assets and liabilities are such that in the interests of its creditors and contributories, the industrial undertaking should be sold as a running concern. Circumstances for the decision to prepare a scheme for the reconstruction of the company: The Central Government may order the preparation of a scheme of reconstruction of the company owning the industrial undertaking if it is satisfied that: It is in the interest of the general public. It is in the interest of the shareholders. Such a course of action is necessary to secure the proper management of the company owning the industrial undertaking.