JUDGMENT: D.N. PATEL, J. 1. This petition has been preferred against the decision taken by the Central Government, whereby approval has been given to the Guardian Industries Corporation, U.S.A. for establishment of a Wholly Owned Subsidiary (WOS) in India for manufacturing of glass and glass products and coating of glass, under the provisions of Clause 1(2) of Schedule-1 to be read with Regulation 5(1) of Foreign Exchange Management (Transfer or issue of Security by a person resident outside India) Regulations, 2000 (hereinafter referred to as the “the Regulations, 2000”) framed under and in exercise of power conferred by clause (b) of sub-section (3) of section 6 and section 47 of the Foreign Exchange Management Act, 1999 (hereinafter referred to as “the Act, 1999”). The impugned decision taken by the Central Government is dated 26th October, 2006. 2. An important question arises for the adjudication of this Court is: “Whether, the Central Government, has taken into consideration, the relevant factors necessary, for taking a decision for giving permission to respondent No. 3 to initiate Wholly Owned Subsidiary in India or it has considered irrelevant factors for arriving at the decision under the Foreign Exchange Management (Transfer or issue of Security by a person resident outside India) Regulations, 2000 and Foreign Exchange Management Act, 1999 or in short, Whether the decision taken by the Central Government suffers from “Wednesbury unreasonableness” or is illegal or is there any “judicial impropriety” in taking decision? 3. Learned Senior Counsel Mr. Mihir Thakore for the petitioner submitted that while passing the impugned order, the Central Government has not taken into consideration the relevant factors. On the contrary, the Central Government has considered irrelevant facts for granting permission to respondent No. 3 for starting its Wholly Owned Subsidiary. It is also submitted that looking to the guidelines issued by the Central Government, which are popularly known as Press Note No. 1 (2005 series), before grant of approval, Central Government ought to have considered whether a joint venture between the petitioner and respondent Nos. 2 and 3 is, in any way, jeopardized or not. Learned counsel for the petitioner submitted that the petitioner and respondent Nos. 2 and 3 entered into a Memorandum of Understanding and Shareholders Agreement and have started joint venture company known as Gujarat Guardian Limited for manufacture of float glass. The joint venture was running smoothly. 2 and 3 is, in any way, jeopardized or not. Learned counsel for the petitioner submitted that the petitioner and respondent Nos. 2 and 3 entered into a Memorandum of Understanding and Shareholders Agreement and have started joint venture company known as Gujarat Guardian Limited for manufacture of float glass. The joint venture was running smoothly. Learned counsel for the petitioner showed balance sheet of the joint venture and showed that the joint venture is a profit making unit. In a joint venture i.e. Gujarat Guardian Limited, respondent Nos. 2 and 3 are having 50% of the shares whereas rest of the 50% shares are held by Modi Block, which includes shares owned by Modi Rubber Limited, and shares owned by GACL and shares owned by GMDC and by other persons of group of Modi. Thus, 50% shares are with Modi block, whereas remaining 50% are with respondent Nos. 2 and 3 in a joint venture. Learned counsel for the petitioner submitted that as per clause 14 of the Shareholders Agreement, respondent Nos. 2 and 3 were restrained from starting any company in India for manufacturing of float glass. The clause has been referred hereinafter in detail. Despite this agreement, an application was preferred to the Central Government by respondent No. 3 seeking approval under Foreign Direct Investment Scheme, especially under Clause 1(2) of Schedule-1 read with Regulation 5(1) of the Rules, 2000 read with Section 6(3)(b) and Section 47 of the Act, 1999. Looking to the Press Note No. 1 (2005 series), they are the guidelines pertaining to the approval of Foreign technical collaboration under the automatic route having previous venture/tie-up in India. As per these guidelines, the permission granted by the Central Government is absolutely illegal and in breach of policy laid down by the Central Government. Learned counsel for the petitioner vehemently submitted that if a partner of the joint venture is permitted to initiate/compete any business in the same field, it will definitely jeopardize the interest of the existing joint venture and/or jeopardize the interest of the stakeholders. This aspect of the matter has not been properly appreciated while granting approval to respondent No. 3. It is also contended by the learned counsel for the petitioner that looking to the impugned order and the minutes of the impugned order, the Central Government has considered irrelevant factors. This aspect of the matter has not been properly appreciated while granting approval to respondent No. 3. It is also contended by the learned counsel for the petitioner that looking to the impugned order and the minutes of the impugned order, the Central Government has considered irrelevant factors. Sickness of a partner of the joint venture is an irrelevant factor, which has been considered by the Central Government. In fact, the Central Government ought to have drawn its attention on the health of the joint venture. In the facts of the present case, Joint venture namely Gujarat Guardian Limited is having sufficient fund to start, another unit anywhere in India. The amount to be invested by Guardian International is not a sizeable amount at all. Already a joint venture is having sufficient fund to expand its manufacturing unit and, therefore, permission granted to Guardian International by the Central Government for starting its Wholly Owned Subsidiary (WOS) deserves to be quashed and set aside. Learned counsel for the petitioner submitted that looking to Clause 14 of Shareholders Agreement, respondent No. 3 cannot start business in India in the same field. Looking to Press Note No. 1 of 2005 series, which are the guidelines, the Central Government also prescribes that if there is non-competing clause in the agreement of a joint venture incorporated, after the issuance of Press Note No. 1 of 2005 series, the approval shall not be granted by the Central Government. Thus, non-competing clause in Shareholders Agreement requires "No Objection Certificate" from the petitioner and other shareholders like GACL, GMDC. This aspect of the matter has not been properly appreciated by the Central Government and ignoring this relevant factors, permission has been granted and, therefore, irrelevant factors have been considered by the Central Government: Learned counsel for the petitioner submitted that looking to the application preferred by respondent No. 3 to the Central Government for grant of permission of Wholly Owned Subsidiary and looking to the minutes of the impugned order, it appears that mainly Central Government and the respondent No. 3 had relied upon the sickness of Modi Rubber Limited, which is a partner of joint venture but sickness of the partner of the joint venture is totally irrelevant consideration. In fact, health of the joint venture ought to have been appreciated. In fact, health of the joint venture ought to have been appreciated. Learned counsel for the petitioner submitted that the order passed by BIFR against the petitioner is already under consideration before the Hon'ble Supreme Court. Likewise the order passed by Allahabad High Court for winding up of the petitioner company is also under consideration before the Hon'ble Supreme Court. Shareholders Agreement has been terminated on 21st July, 2006 and immediately on the second day i.e. on 22nd July, 2006, an application was moved by respondent No. 3 to Foreign Investment Promotion Board (FIPB). The termination of Shareholders Agreement by respondent Nos. 2 and 3 is under challenge before arbitration at U.K. Similarly, one more petition is pending before High Court of Judicature at Delhi. The petition has been preferred by the petitioner in Delhi High Court but in the present case, the petitioner is challenging the approval granted by Central Government. It was also contended that as the joint venture company is situated at Ankleshwar within State of Gujarat, this Court has territorial jurisdiction to adjudicate this matter. Learned counsel for the petitioner has also relied upon the correspondence between the petitioner and respondent Nos. 2 and 3 and it has been pointed out that the petitioner wants to expand the business and further investment to be done but it was not made permissible by respondent Nos. 2 and 3. Learned counsel for the petitioner has also taken this Court to the figures from the books of accounts of the joint venture and pointed out that because there was an intention of expansion of joint venture, no dividend was declared by joint venture company, despite huge profit. Reserve was accumulated so as to be utilized, for expansion activity of the joint venture. Learned counsel for the petitioner also submitted that the conditional order passed by the Central Government granting approval to respondent No. 3 itself is suggestive of a fact, that the interest of the joint venture is going to suffer. Undertaking to be given by respondent No. 3 to take care of joint venture is nothing but an eye wash. Central Government has no control once the approval is given. Once respondent No. 3 i.e. partner of the joint venture is given permission to start its Wholly Owned Subsidiary, the joint venture will have a direct effect and ultimately the joint venture will lead to the winding up. Central Government has no control once the approval is given. Once respondent No. 3 i.e. partner of the joint venture is given permission to start its Wholly Owned Subsidiary, the joint venture will have a direct effect and ultimately the joint venture will lead to the winding up. This aspect of the matter has not been appreciated by the Central Government. Learned counsel for the petitioner submitted that there is no provision under the Act, 1999 and Regulation, 2000 so far as under the Press Note No. 1 (2005 series) for grant of conditional permission. All the conditions attached with the approval reflects non-application of mind by the Central Government. Territorial aspect of the Wholly Owned Subsidiary is thoroughly irrelevant. Other competing units are already working in the different States of the country. Initial share of the joint venture, in the total demand of the country of 33%. It has been reduced to 25% because of 4 or 5 other competing companies manufacturing the float glass, though they are situated at the different States of the country and, therefore, conditions imposed by the Central Government that Wholly Owned Subsidiary will be started in the different State other than Gujarat is a meaningless condition. Even if the Wholly Owned Subsidiary is started in the another State, it will jeopardize the interest of the joint venture in Gujarat. Learned counsel for the petitioner submitted that hearing was not given by FIPB, but by the core group of Foreign Investment Promotion Board, (FIPB). Looking to the Act, 1999, Regulations, 2000 and policy, in the form of Press Note No. 1 (2005 series), decision ought to have been taken by FIPB, but, in the fact of the present case, Core group of FIPB has given hearing. The decision taken by the Core group ought to be placed before FIPB and, in the facts of the present case, only Core group has decided and not FIPB and, therefore, decision taken by the Central Government deserves to be quashed and set aside. Learned counsel for the petitioner has pointed out in detail that irreversible damage will be caused to the joint venture, if Wholly Owned Subsidiary is allowed to be incorporated. Learned counsel for the petitioner has also relied upon several decisions and has, in detail, submitted as to principle of Wednesbury Unreasonableness and has relied upon CCSU case and upon several other authorities. Learned counsel for the petitioner has also relied upon several decisions and has, in detail, submitted as to principle of Wednesbury Unreasonableness and has relied upon CCSU case and upon several other authorities. It has pointed out that if the irrelevant factors have been considered, as per Wednesbury case, the impugned decision deserves to be quashed and set aside as the authorities are acting unreasonably. The details of the paras as to what is unreasonableness and CCSU case are discussed hereinafter. It has been also submitted by Learned counsel for the petitioner that assuming without admitting that there is valid termination of Shareholders Agreement on 21st July, 2006 by respondent Nos. 2 and 3, as per clause 14 thereof, which is non-competing clause, it shall have its effect, upto the validity period of Shareholders Agreement and, thus, despite the termination of the Shareholders Agreement, the non-competing clause shall be binding to respondent Nos. 2 and 3, so long as Shareholders Agreement, was to remain in force. Looking to the provisions of Shareholders Agreement, it shall remain operative so long as Modi Rubber Limited and Guardian International is holding not less than 15% shares of the joint venture, as per clause 16 of the Shareholders Agreement. Looking to the facts of the present case, Modi Rubber Limited is holding 50% of the shares (which includes shares of GACL and GMDC). Neither MRL nor GACL nor GMDC has given sanction/permission/'No Objection Certificate' for starting of Wholly Owned Subsidiary by respondent No. 3. Thus, even if it is assumed that the Shareholders Agreement have been brought an end validly, looking to clause 16 thereof, non-competing clause i.e. clause 14, ought to have been appreciated by the Central Government. This relevant factors ought not have been considered and, therefore, this tantamounts to Wednesbury unreasonableness and, therefore, the impugned decision taken by the Central Government deserves to be quashed and set aside. It is further contended by Learned counsel for the petitioner that the decision taken by the Central Government is not a policy decision but it is a simple quasi judicial decision taken under the policy. In other words, it is a decision given by the Central Government without following the policy. The policy has already been enacted and notified for grant or refusal of permission, which is known as Press Note No. 1 (2005 series). In other words, it is a decision given by the Central Government without following the policy. The policy has already been enacted and notified for grant or refusal of permission, which is known as Press Note No. 1 (2005 series). This policy, which is already enacted, has not been followed or observed by the Central Government and, therefore, this Court can interfere with the quasi judicial decision taken by the Central Government. Directly the rights of the petitioner are affected as the petitioner is a partner, by holding 50% shares, in the joint venture. Learned counsel for the petitioner has also pointed out that the decision rendered by the Hon'ble Supreme Court in V.B. Ranraj vs. V.B. Ganpat, 1999 (2) SCC 254, has been further explained in the decision taken by the Hon'ble Supreme Court in Ms Madhusudan vs. Madhusudan, (2004) 9 SCC 204, especially in paragraph nos. 140, 141 and 145 thereof. 4. Learned counsel for the respondent Nos. 4 and 5 submitted that they are adopting the arguments canvassed by the learned counsel for the petitioner and further submitted that Central Government has no power to pass the conditional order. Looking to the nature of impugned order, conditions have been imposed. They clearly reflect that the interest of the joint venture is going to be jeopardized. It is further submitted that neither by respondent No. 4 nor by respondent No. 5 has given consent for staring of Wholly Owned Subsidiary by respondent No. 3. On the contrary, it has been denied by respondent Nos. 4 and 5 categorically, for grant of "No Objection Certificate." They have also submitted that they are stakeholders of the joint venture and the interest of stakeholders as per Press Note No. 1 of 2005 series ought to have been considered by the Central Government. Looking to the impugned order, interest of stakeholders have not been considered at all and, therefore, the impugned order deserves to be quashed and set aside: Learned counsel for the respondent Nos. 4 and 5 also pointed out that respondent Nos. 4 and 5 are the Government Companies and public money are at the stake. The respondent Nos. 4 and 5 are the stakeholders in the joint venture and if the partner of the joint venture is permitted to initiate its Wholly Owned Subsidiary, it will surely jeopardize the interest of respondent Nos. 4 and 5. 4 and 5 are the Government Companies and public money are at the stake. The respondent Nos. 4 and 5 are the stakeholders in the joint venture and if the partner of the joint venture is permitted to initiate its Wholly Owned Subsidiary, it will surely jeopardize the interest of respondent Nos. 4 and 5. They have also submitted that relevant factors have not been considered by the Central Government and on the contrary, irrelevant factors have been considered. A capacity of the joint venture, to expand, the business, has not been appreciated at all. The joint venture has sufficient funds to start another unit. This main aspect has been, turned deaf ear to, by the Central Government. It is further submitted by the Learned counsel for the respondent Nos. 4 and 5 that sickness of Modi Rubber Limited has nothing to do with the joint venture. The objections raised by the Learned counsel for the respondent Nos. 4 and 5 before FIPB have not been considered thoroughly and the non-speaking order has been passed by the Central Government. Looking to the conduct of the respondent No. 3, an application ought not to have been allowed by the Central Government. Shareholders Agreement was terminated on 21st July, 2006 and an application was preferred to the FIPB on 22nd July, 2006. This lacks bona-fide on the part of respondent No. 3. Looking to the books of account of the joint venture, it has sufficient capacity of expansion and, therefore, looking to clause 14 read with clause 16 of the Shareholders Agreement and looking to the Press Note No. 1 of 2005 series, issued as guidelines to the Central Government, permission ought not to have been granted to respondent No. 3 to start its Wholly Owned Subsidiary in the same field, in which, the joint venture company is doing its business. Learned counsel for the respondent Nos. 4 and 5 submitted that they have 4.75% stake, by each, in the joint venture. Thus, they are holding totally 9.46% shares in the joint venture and their interest as stakeholders in the joint venture ought to have been considered by the Central Government. These relevant factors have also not been considered and, therefore, the impugned order passed by Central Government deserves to be quashed and set aside. 5. Learned Additional Solicitor General of India Mr. These relevant factors have also not been considered and, therefore, the impugned order passed by Central Government deserves to be quashed and set aside. 5. Learned Additional Solicitor General of India Mr. B.A. Desai with Learned Assistant Solicitor General of India Mr. Harin P. Raval appearing on behalf of respondent No. 1, have submitted that there is no illegality, irrationality or procedural impropriety in taking the decision by the Central Government under Clause 1(2) of Schedule-1 read with section 5(1) of the Regulations, 2000 enacted under clause (b) of sub-section (3) of section 6 and section 47 of Foreign Exchange Management Act, 1999. All the relevant factors have been considered by the Central Government including the factors whether starting of Wholly Owned Subsidiary by respondent No. 3 will in anyway jeopardize the interest of the joint venture and of the stakeholders. Though there is no need of giving personal hearing by FIPB, personal hearing was given to the petitioner as well as to respondent Nos. 2, 3, 4 and 5. At length, submissions were made before FIPB through their counsels. Looking to the minutes of the impugned order, in detail, the submissions were recorded and they were considered and thereafter, subjective satisfaction has been arrived at by the Central Government on the basis of the objective facts and an approval was given for the Wholly Owned Subsidiary, upon an application by respondent No. 3 under the Act, 1999. Learned counsel for respondent No. 1 submitted that looking to the Foreign Direct Investment Scheme, the need of country, the provisions of law, generation of employment, possibilities of fetching more foreign exchange, induction of new technology and several other factors including the factors, which are referred to in the Press Note No. 1 of 2005 series, the experts, who are appointed in FIPB have taken decision for grant of approval. Looking to the impugned order, it being a decision taken by the expert body allowing the foreign investment in the country is the complex decision and the decision is not taken over night but it was taken after due deliberations by members of FIPB and after hearing the petitioner as well as respondent Nos. Looking to the impugned order, it being a decision taken by the expert body allowing the foreign investment in the country is the complex decision and the decision is not taken over night but it was taken after due deliberations by members of FIPB and after hearing the petitioner as well as respondent Nos. 2, 3, 4 and 5 and after their lengthy submission before FIPB through their counsels and after checking all the pros and cons of the matter, experts have given their opinion to the Central Government granting permission for starting of Wholly Owned Subsidiary by respondent No. 3, such a decision may not be interfered with, by this Court as it being a subjective decision, taken after considering all the relevant factors and especially when there is no illegality in decision making process: Learned Additional Solicitor General of India vehemently submitted that the decision taken by the Central Government is absolutely in consonance with the provisions of the Act, 1999 and Rules, 2000 and the policies. Enough care has been taken of the joint venture, which is already in existence. In detail, impugned order as well as minutes of the impugned order has been read and re-read before this Court by the Learned counsels. They have pointed out that it is a subjective satisfaction, which has to be arrived at by the Central Government as to whether any jeopardize will be caused, to the joint venture, or not. Once the relevant factors are considered including clause 14 of the Shareholders Agreement as well as the termination of Shareholders Agreement, other clauses i.e. control upon the joint venture, the sickness of Modi Rubber Limited, the order of winding up of the petitioner passed by the Allahabad High Court etc. and after consideration of all the submissions made before FIPB, the decision has been arrived at by the Central Government for granting permission for starting Wholly Owned Subsidiary. Once, the relevant factors have been considered, by the Central Government, and the decision has been taken by the Central Government, Court may not, replace such a decision of the Central Government. The Court is not in search of better alternative of the decision taken by the Central Government. Once, the relevant factors have been considered, by the Central Government, and the decision has been taken by the Central Government, Court may not, replace such a decision of the Central Government. The Court is not in search of better alternative of the decision taken by the Central Government. In short, it was emphasized by the Learned Additional Solicitor General of India and the Learned Assistant Solicitor General of India that very limited is a scope of judicial review, once there is no illegality or irrationality and no procedural impropriety in the decision of the Central Government and when "Wednesbury Unreasonableness" is totally absent. Learned counsels for both the sides have taken this Court in great detail, as to the Wednesbury unreasonableness and CCSU case. A true, correct and legal decision has been arrived at by the Central Government on the basis of the advice given by FIPB, which constitutes of Secretaries of several Departments of Government including Finance. Learned counsel has also pointed out from the minutes of the impugned order that the whole decision taken by the Central Government is an enabling decision and it is passed, reserving the rights and contentions of the partners of the joint venture, out of contractual agreement. Nothing has been crystalised, by the Central Government, about contractual rights and obligations of the partner of the joint venture. Central Government is not favouring any of the partners of the joint venture as the dispute is already pending in arbitration at U.K. and before the High Court at Delhi. Central Government has nothing to do with existence of Shareholders Agreement or termination thereof. Parties to the Shareholders Agreement are always at liberty to go before appropriate forum for execution of the obligation under the Shareholders Agreement under any term thereof, if found enforceable. This makes decision taken by the Central Government more than reasonable. No better order can be passed by the Central Government than the impugned order. Looking to the facts of the present case, especially when arbitration proceedings are pending at U.K. and one more writ is pending before High Court of Delhi. A detailed Affidavit in-reply has been filed by Union of India stating wherein that the impugned decision taken by the Central Government are not influenced by any letters as alleged by the petitioner. Looking to the facts of the present case, especially when arbitration proceedings are pending at U.K. and one more writ is pending before High Court of Delhi. A detailed Affidavit in-reply has been filed by Union of India stating wherein that the impugned decision taken by the Central Government are not influenced by any letters as alleged by the petitioner. The allegations levelled in the memo of the petition that letters were written by US authorities and they influenced upon the decision, is absolutely far away from the truth and is incorrect. It is stated by the Additional Solicitor General of India that India has enough capacity to take independent decision. India has already framed its Foreign Direct Investment Policy and Scheme. Several factors for grant of approval have been disclosed. The policy is absolutely transparent. The decision making process is absolutely transparent. Original files were also presented before this Court for perusal. Once there is no irregularity or irrationality in the decision making process, even if the two views are possible, the Court cannot take another view. Court can check whether the decision taken by the Central Government is illegal, irrational or is suffering from procedural impropriety. The authorities ought to be permitted to take the decision under the law. “Fair play in the joints” ought to be permitted to the Government. This principle of “Free play in the joints” permits Central Government to take, one view or the other, within the four corners of law, but, once the decision making process is found to be true and if otherwise there is no illegality or impropriety, the decision taken by the Central Government may not be taken into judicial review, even if another view is possible. In reply to the arguments canvassed by the learned counsel for the petitioner, that unless and until arbitration proceedings are over at U.K., an application for permission ought to have been abeyance by FIPB, it was stated by Union of India that it was for the Central Government to keep such application in abeyance or to grant permission to the applicant, if found otherwise eligible by making such approval, subject to the rights and obligations of the partners of the joint venture under the Shareholders Agreement. Both choices are valid under the law. Central Government can use its wisdom upon advice of FIPB. Both choices are valid under the law. Central Government can use its wisdom upon advice of FIPB. Permission granted was made subject to the rights and obligations of the Shareholders Agreement. Such a decision is not illegal or impermissible. Therefore, even if the second view is possible, this Court may not interfere with the decision taken by the Central Government. It is submitted by the learned counsel for the Central Government that looking to the share holding of the joint venture, 50% of the shares are with Guardian International and remaining 50% of shares are with Modi block. Looking to the correspondence between the partners of the joint venture, it appears that there was a sickness of one partner of the joint venture. Looking to the order of the BIFR as well as the order passed by Allahabad High Court, out of two partners of the joint venture, one was sick. Even, winding up order, has also been passed. Guardian International is not ready and willing to invest more amount in the joint venture. Looking to the market growth of the floating glass and looking to the undertaking given by the Foreign Collaboration for continuing commitment in existing joint venture and also keeping in mind the submission of the applicant i.e. respondent No. 3 that the Wholly Owned Subsidiary may be permitted, at geographically another place. The place in which the joint venture is not in existence. So far as jeopardize of the interest of the joint venture is concerned, 50% ownership of the joint venture is with respondent Nos. 2 and 3. The present petitioner is having only 24% of shares in the joint venture. Respondent No. 3 is having more stake, than the petitioner, in the joint venture. Thus, there is no illegality, irrationality or procedural impropriety and much less Wednesbury Unreasonableness in the decision taken by the Central Government. The decision making process is also legal and there is no irregularity at all and, hence, there is no substance in the petition and, may not be entertained by this Court by exercising an extraordinary jurisdiction under Article 226 of the Constitution of India. 6. Learned Counsel Mr. H.S. Chadhoke for respondent Nos. 2 and 3 submitted that they have no personal grudge against the petitioner but it is a sickness of the present petitioner, which has resulted into stagnancy of the joint venture. 6. Learned Counsel Mr. H.S. Chadhoke for respondent Nos. 2 and 3 submitted that they have no personal grudge against the petitioner but it is a sickness of the present petitioner, which has resulted into stagnancy of the joint venture. In a joint venture, namely Gujarat Guardian Limited, present petitioner is having 24% of the shares whereas respondent Nos. 2 and 3 are having 50% of the shares. Because of sickness of one of the partners of the joint venture, respondent Nos. 2 and 3 could not make more investment in the joint venture as the petitioner was unable to invest in the joint venture. Respondent Nos. 2 and 3 waited for 3 long years. Learned counsel for respondent Nos. 2 and 3 has taken this Court in detail of the correspondence between the parties and pointed that the petitioner could not come out of his sickness and was unable to invest anything more in the joint venture and therefore, joint venture could not expand its activity and other competitive companies like M/s. Trivedi Glass Limited, M/s. Asahi India Glass Limited, M/s. Gujarat Borosil Limited and M/s. Saint-Gobain Glass India and M/s. Haryana Sheet Glass Limited, came into existence and the shares of the present joint venture, which was upto 33% of the total market-need, is reduced considerably. The dispute between two Modi brothers has come in the business. The present petitioner has preferred an application before BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. BIFR passed an order declaring the petitioner as a sick company and operating agency IDBI was appointed. Even operating agency IDBI also fade up with the dispute between Modi Brothers and because of their non-cooperation, IDBI resigned to work as operating agent. Allahabad High Court has passed an order, to wound up the company. The dispute is taken to the Hon'ble Supreme Court. In such a state of affairs by one partner, out of two, in the joint venture, it was impossible for respondent Nos. 2 and 3, to invest anything more, in the joint venture. No expansion has taken place in the joint venture. Looking to the revival Scheme placed before BIFR by the petitioner, Modi Rubber Limited have stated that Modi Rubber Limited is ready to encash, their shares in the joint venture. They want to sell away, their shares in the joint venture. No expansion has taken place in the joint venture. Looking to the revival Scheme placed before BIFR by the petitioner, Modi Rubber Limited have stated that Modi Rubber Limited is ready to encash, their shares in the joint venture. They want to sell away, their shares in the joint venture. The dividend which they are going to get, from the joint venture, will also be given to the Creditors of Modi Rubber Limited. Basically, Modi Rubber Limited is manufacturing tyre and has nothing to do with the float glass. In the process of revival of Modi Rubber Limited, what is invested in the glass manufacturing (in the joint venture) will be sold out, by the Modi Rubber Limited. Even the proposed dividend is offered, to the Secured Creditors in the hopes of revival of Modi Rubber Limited. It appears that Modi Rubber Limited i.e. present petitioner is not interested in carrying out any further investment in the joint venture. They are in mood to sell away their all the shares in joint venture. In such a situation, it is impossible for respondent Nos. 2 and 3 to invest and expand the joint venture. If any proposal is to be made by respondent Nos. 2 and 3 for investment in the joint venture and the same is denied by the present petitioner, it will lead to a situation whereby joint venture may become a defunct company, especially looking to the provisions of Sections 397 and 398 of the Companies Act, 1956 (which are the provision of deadlock of the company) and, therefore, all such type of possible disputes have been avoided by not putting proposal for expansion because Modi Rubber Limited has nothing to invest in the joint venture. Instead of bringing the joint venture at the door step of a defunct company, respondent Nos. 2 and 3 waited, enough, for 3 long years. Modi Rubber Limited could not, come out of, his sickness. More and more orders were passed by BIFR. Allahabad High Court has passed an order for winding up of Modi Rubber Limited and, therefore, no option was left with respondent Nos. 2 and 3, but to prefer, an application for their Wholly Owned Subsidiary. Respondent Nos. 2 and 3 are not interested in making the joint venture, a defunct company. On the contrary, they are having highest stake in the joint venture as high as 50%. 2 and 3, but to prefer, an application for their Wholly Owned Subsidiary. Respondent Nos. 2 and 3 are not interested in making the joint venture, a defunct company. On the contrary, they are having highest stake in the joint venture as high as 50%. If any body's interest is going to jeopardize, it will be the highest upon the respondent Nos. 2 and 3 and, therefore, obviously, no step will be taken by respondent Nos. 2 and 3, even remotely, to jeopardize the interest, of the joint venture, and, therefore, the apprehension propounded by the joint venture on the basis of the press note, is absolutely unwarranted, uncalled for and baseless. 7. Learned counsel for respondent Nos. 2 and 3 submitted that all the relevant factors necessary for arriving at the decision under the Act, 1999, the Rules, 2000 and Policy i.e. Press Note No. 1 of 2005 series, have been considered. Even the parties have been extensively heard before FIPB, despite no such statutory requirement and, therefore, principles of natural justice have also complied with. There is no procedural impropriety in the decision making process. Therefore, the impugned order passed by respondent No. 1 may not be interfered with by this Court. All the assistance, which have been extended by respondent Nos. 2 and 3 to the joint venture shall be continued in the future. It is not the intention of the respondent Nos. 2 and 3 to weaken the financial position of the joint venture which is evident not only from the conditions attached with the approval, but its obvious also looking to the fact that respondent Nos. 2 and 3 is a 50% partner of the joint venture. Joint venture by 50% is owned by respondent Nos. 2 and 3 and, therefore, respondent Nos. 2 and 3 will not cause any harm to the joint venture and, therefore, Wholly Owned Subsidiary has been ordered to be incorporated at the geographically at another place, at the place in which the joint venture is not working. Looking to the market growth of demand of floating glass, there is ample scope for Wholly Owned Subsidiary to survive with the survival of the joint venture. Even if the joint venture is working at its highest capacity then also, it cannot fulfill total demand of the floating glass in India. Looking to the market growth of demand of floating glass, there is ample scope for Wholly Owned Subsidiary to survive with the survival of the joint venture. Even if the joint venture is working at its highest capacity then also, it cannot fulfill total demand of the floating glass in India. Nonetheless, 70% of the product of the Wholly Owned Subsidiary is different than what is manufactured by the joint venture. At length, learned counsel for respondent Nos. 2 and 3 pointed out that the nature of the product as to glass and how it is different from the glass manufactured by the joint venture. Thus, as a cumulative effect of the aforesaid facts, an approval has been granted. Respondent No. 1 has arrived at subject satisfaction on the basis of the aforesaid objective facts and, therefore, this Court may not interfere with the decision taken by respondent No. 1, which is otherwise taken after following principles of natural justice: Learned counsel for respondent Nos. 2 and 3 contended that the decision has been taken at Delhi by Union of India. The petitioner is also having its registered office at Delhi. An application of respondent No. 3 was also at Delhi and no cause of action has arisen here and, therefore, this Court has no territorial jurisdiction. Learned counsel for respondent Nos. 2 and 3 submitted that there is no locus standi to the petitioner to prefer a petition as there is no resolution passed by Modi Rubber Limited and, therefore, this petition is not tenable at law. It is also submitted by learned counsel for respondent Nos. 2 and 3 that the Shareholders Agreement was not in existence as on date of application preferred by respondent No. 3. Shareholders Agreement was terminated on 21st July, 2006 and thereafter, an application was preferred to the Central Government for approval/permission for Wholly Owned Subsidiary and, therefore, the contention raised on the basis of clause 14 as well as clause 16 is baseless. Already a proceedings has been initiated and pending before competent authority and challenged that valid termination of Shareholders Agreement or not. Arbitration at U.K. is going on. Likewise the present petitioner has already preferred a petition before Delhi High Court. Already a proceedings has been initiated and pending before competent authority and challenged that valid termination of Shareholders Agreement or not. Arbitration at U.K. is going on. Likewise the present petitioner has already preferred a petition before Delhi High Court. Thus, this Court may not go into the question of valid or void termination of Shareholders Agreement but it is a matter of fact that on 21st July, 2006, the Shareholders Agreement has been brought to an end and, therefore, rightly looking to the minutes of the impugned order, it has been clarified by the Central Government that the whole approval given under the Act, 1999 read with Rules, 2000 is mere enabling order. The impugned order is subject to the rights and contention of the parties under the agreement. The petitioner is not estopped by the impugned order for initiating any proceedings for execution of Clauses 14 and 16 of the alleged Shareholders Agreement. In fact, Union of India has passed more than reasonable order. Thus, looking to the totality of the impugned order, absolutely balanced order has been passed by the Union of India and there is no illegality, irrationality or there is no procedural defect in grant of approval by the Central Government for establishment of Wholly Owned Subsidiary. Learned counsel for respondent Nos. 2 and 3 submitted that the new venture will not be competing with Gujarat Guardian Limited. 70% of the products manufactured by the new joint venture, which is new product and which is not made by Gujarat Guardian Limited. Secondly, the new joint venture is outside the State of Gujarat. Thirdly, the respondent No. 3 is under obligation to observe all the undertakings given before FIPB and looking to the 50% ownership of the joint venture, if at all any interest of the joint venture is jeopardized, it will not jeopardize any one else but it will be for respondent No. 3 itself and, therefore, respondent No. 3 will not take any steps/even indirectly cause damage to the interest of the joint venture. Respondent No. 3 has already offered the petitioner to purchase their shares in the joint venture so that Modi Rubber Limited can come out of his sickness by encashing their shares. Respondent No. 3 has already offered the petitioner to purchase their shares in the joint venture so that Modi Rubber Limited can come out of his sickness by encashing their shares. For the reasons best known to Modi Rubber Limited, they have not accepted this offer and a counter offer is made to purchase the shares of respondent No. 3 in Gujarat Guardian Limited i.e. joint venture. Respondent No. 3 accepted this counter offer made by Modi Rubber Limited and pointed out that at a particular price on or before particular date, if Modi Rubber Limited is ready and willing to purchase the shares of respondent No. 3 in the joint venture. Respondent No. 3 is ready to sale all their shares in GGL to MRL. The petitioner has failed to purchase the shares of respondent No. 3 in the joint venture as they have no money. Modi Rubber Limited is a sick company, for which, winding up order has already been passed. Thus, Modi Rubber Limited is not interested in purchase of the shares of respondent No. 3 in the joint venture. The business of the joint venture will come to an end, if any proposal is put by respondent No. 3 and not accepted by Modi Rubber Limited for expansion of the joint venture and, therefore, an application was preferred for approval, which has been granted by Central Government, keeping in mind, cumulative effect of several factors including the factor as to whether the interest of the joint venture is going to be jeopardized or not. 8. 8. Having heard the learned counsels for both the sides and looking to the facts and circumstances of the case and the documents on record and upon perusing the original file, in my opinion, no illegality or irrationality or procedural impropriety has been committed by the Union of India in granting approval to respondent No. 3 for establishment of Wholly Owned Subsidiary, for which an application was preferred for grant of approval under clause 1(2) of Schedule-1 to be read with Rule 5(1) of the Rules, 2000 read with clause (b) of sub-section (3) of Section (6) read with section 47 of the Foreign Exchange Management Act, 1999, mainly for the following facts and reasons: (A) Relevant factors, which are undisputed: The petitioner and respondent No. 2 entered into Memorandum of Understanding on 20th July, 1988 to promote a joint venture in India for manufacturing and marketing of float glass. Joint venture called “Gujarat Guardian Limited” (hereinafter referred to as “GGL”) was incorporated on 21st February, 1990. Shareholders Agreement was executed between the petitioner and respondent No. 2 on 23rd January, 1990. This document has been read and re-read by the learned counsels during the course of arguments, especially clause 14 and 16 thereof, which have been referred hereinafter, which are pertaining to non-competing clause of the Shareholders Agreement and as to term during which the Agreement is binding to the parties. The petitioner company was declared sick by Board of Industrial and Financial Reconstruction (BIFR) on 17th May, 2006. Winding up of Modi Rubber Limited order was passed by Allahabad High Court on 12th March, 2004 in Company Petition No. 1 of 2002. 21st July, 2006, is the date on which Shareholders Agreement was terminated by respondent No. 2. Thereafter, respondent No. 2 preferred an application to Union of India for permission to establish a separate new and independent Wholly Owned Subsidiary in India. In pursuance of the requirement of clause 1(2) of Schedule-1 read with Rule 5(1) of Rules, 2000 enacted under section 6(3)(b) and 47 of the Act, 1999. Thereafter, respondent No. 2 preferred an application to Union of India for permission to establish a separate new and independent Wholly Owned Subsidiary in India. In pursuance of the requirement of clause 1(2) of Schedule-1 read with Rule 5(1) of Rules, 2000 enacted under section 6(3)(b) and 47 of the Act, 1999. Looking to the guidelines, which are in the form of Press Note No. 1 (2005 series) and looking to the goals to be achieved by the Act, 1999 read with Rules, 2000 and after giving, an extensive opportunity of being heard, to all the concerned parties, a subjective satisfaction has been arrived at by Union of India and permission was granted on 26th October, 2006. Minutes of 86th Meeting of reconstituted Foreign Investment Promotion Board (FIPB) held on 5th October, 2006 (at Annexure “C” to the Reply filed by respondent Nos. 2 and 3). Learned Additional Solicitor General of India, on behalf of Union of India has pointed out that minutes are to be read as part and parcel of the order. Hearing before FIPB was over and recommendations were made by FIPB for grant of approval to Wholly Owned Subsidiary. The recommendations were made by FIPB to Central Government. Meanwhile, a petition was preferred before Delhi High Court by the present petitioner on 10th October, 2006, wherein, following prayers were prayed: “(a) restrain the Respondent or its affiliates or associate from participating, negotiating or engaging or be financially interested, directly or indirectly in any other project for the manufacturing of Float Glass, or for the fabrication of products made from Float Glass, or for the sale, import/export of Float Glass or related products made from Float Glass in India. (b) restrain the Respondent from taking any step in setting up a wholly owned subsidiary in India for manufacturing in the same field as GGL. (c) restrain the Respondent from pursuing the Application made to the Government of India (Now pending before the Foreign Investment Promotion Board) for approval to set up a wholly owned subsidiary in the glass manufacturing and glass coating section. (d) restrain the Respondent from acting in furtherance of the application No. 141/2006-FCI filed before the FIPB. (e) grant ex-parte ad-interim reliefs in terms of Clause (a) to (d) above. (d) restrain the Respondent from acting in furtherance of the application No. 141/2006-FCI filed before the FIPB. (e) grant ex-parte ad-interim reliefs in terms of Clause (a) to (d) above. (f) pass any other order that this Hon'ble Court deems fit in the facts and circumstances of the case.” (Emphasis supplied) This petition was preferred under section 9 of the Arbitration and Conciliation Act, 1996. In pursuance of the arbitration clause in the agreement, an application was preferred by Guardian International Corporation against the petitioner for arbitration before London Court of International Arbitration on 16th October, 2006 with the following prayers: “VI. Relief Requested 42. As a consequence of the foregoing, Guardian International respectfully requests the following relief: (a) a declaration that the Shareholders Agreement has been frustrated or has been validly terminated or otherwise discharged. (b) alternatively, a declaration that Clause 14 of the Shareholders Agreement is null and void and/or unenforceable against Guardian International and/or has been frustrated or otherwise discharged add/or has been frustrated or otherwise discharged and/or may not be invoked by MRL to prevent Guardian International from constructing and operating further float glass plants in India. (c) an award of monetary damages in an amount to be quantified in the course of these proceedings. (d) its costs incurred in this arbitration. (e) such additional or other relief as may be just. Guardian International reserves the right to amend or supplement or to make additional claims or revisions to its claims.” (Emphasis supplied) In view of the aforesaid facts and in pursuance of the application preferred by respondent Nos. 2 and 3 before FIPB for Direct Investment for establishment of Wholly Owned Subsidiary, hearing was given and the order was passed on 26th October, 2006. The minutes of the meeting of the FIPB dated 5th October, 2006 have also been drawn in detail, narrating the arguments of both the sides and the reasons have also been recorded wherein, it has been mentioned at the end of the minutes as under: “The Board also observed that FIPB approval is merely an enabling decision for induction of Foreign Direct Investment, without prejudice to the legal/adjudicatory rights of the parties concerned under any existing contractual agreement. Accordingly, the board recommended the approval of the proposal as above.” (Emphasis supplied) Thus, the petitioner is challenging the impugned order to be read with the minutes drawn by the Board mainly on the ground that the FIPB has not considered the relevant factors. On the contrary, FIPB has considered irrelevant factors, and, therefore, impugned order deserves to be quashed and set aside. (B) Provisions of law and relevant parts of the shareholders Agreement and the guidelines issued, which is known as Press Note No. 1 (2005 series): Section 2(e) of The Foreign Exchange Management Act, 1999, reads as under: 2. (e) “capital account transaction” means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and includes transactions referred to in sub-section (3) of section 6. Section 6(1), (2) and (3) of The Foreign Exchange Management Act, 1999, read as under: “6. Capital account transactions - (1) Subject to the provisions of sub-section (2), any person may sell or draw foreign exchange to or from an authorized person for a capital account transaction. (2) The Reserve Bank may, in consultation with the Central Government, specify:- (a) any class or classes of capital account transactions which are permissible. (b) the limit up to which foreign exchange shall be admissible for such transactions: Provided that the Reserve Bank shall not impose any restriction on the drawal of foreign exchange for payments due on account of amortization of loans or for depreciation of direct investments in the ordinary course of business. (3) Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following:- (a) transfer or issue of any foreign security by a person resident in India. (b) transfer or issue of any security by a person resident outside India. (c) transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India. (d) any borrowing or lending in foreign exchange in whatever form or by whatever name called. (e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India. (f) deposits between persons resident in India and persons resident outside India. (d) any borrowing or lending in foreign exchange in whatever form or by whatever name called. (e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India. (f) deposits between persons resident in India and persons resident outside India. (g) expert, import or holding of currency or currency notes. (h) transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India. (i) acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India. (j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred:- (i) by a person resident in India and owned to a person resident outside India. (ii) by a person resident outside India.” (Emphasis supplied) Section 47 of The Foreign Exchange Management Act, 1999, reads as under: “47. Power to make regulations - (1) The Reserve Bank may, by notification, make regulations to carry out the provisions of this Act and the rules made thereunder. (2) Without prejudice to the generality of the foregoing power, such regulations may provide for:- (a) the permissible classes of capital account transactions, the limits of admissibility of foreign exchange for such transactions, and the prohibition, restriction or regulation of certain capital account transactions under section 6. (b) the manner and the form in which the declaration is to be furnished under clause (a) of sub-section (1) of section 7. (c) the period within which and the manner of repatriation of foreign exchange under section 8. (d) the limit up to which any person may possess foreign currency or foreign coins under clause (a) of section 9. (e) the class of persons and the limit up to which foreign currency account may be held or operated under clause (b) of section 9. (f) the limit up to which foreign exchange acquired may be exempted under clause (d) of section 9. (g) the limit up to which foreign exchange acquired may be retained under clause (e) of section 9. (f) the limit up to which foreign exchange acquired may be exempted under clause (d) of section 9. (g) the limit up to which foreign exchange acquired may be retained under clause (e) of section 9. (h) any other matter which is required to be, or may be, specified.” In pursuance of the aforesaid provisions, the Regulations, namely Foreign Exchange Management (Transfer or issue of Security by a person resident outside India) Regulations, 2000 have been enacted by Reserve Bank of India to prohibit, restrict or regulate the transfer or issue of security by a person resident outside India. Regulation 5(1) of Regulations, 2000, reads as under: “5. Permission for purchase of shares by certain persons resident outside India (1) A person resident outside India (other than a citizen of Bangladesh or Pakistan [or an entity incorporated outside India] (other than an entity in Bangladesh or Pakistan), may purchase shares or convertible debentures of an Indian company under Foreign Direct Investment Scheme, subject to the terms and conditions specified in Schedule 1.” (Emphasis supplied) The aforesaid Rule 5(1) of the Rules, 2000 to be read with Schedule-1 and relevant part of the Schedule-1 reads as under: Schedule 1 [Regulation 5(1)] Foreign Direct Investment Scheme 1. Purchase by a person resident outside India of equity/preference/convertible preference shares and convertible debentures issued by an Indian company. (1) A person resident outside India referred to in sub-regulation (1) of Regulation 5, may purchase shares or convertible debentures issued by an Indian company up to the extent and subject to the terms and conditions set out in this schedule. (2) If the person purchasing the shares under this Scheme proposes to be collaborator or proposes to acquire the entire shareholding of a new Indian Company, he should obtain a prior permission of Central Government if he has a previous venture or tie-up in India through investment in shares or debentures or a technical collaboration or a trademark agreement or investment by whatever name called in the same field or allied field in which the Indian company issuing the shares is engaged.” (Emphasis supplied) For guiding and for determination of an application preferred under Section 1(2) of Schedule-1, Press Note No. 1 (2005 series) has been issued by Government of India and relevant part of Press Note No. 1 (2005 series), reads as under: “2. New proposal for foreign Investment/technical collaboration would henceforth be allowed under the automatic route, subject to sectoral policies, as per the following guidelines: (i) Prior approval of the Government would be required only in case where the foreign investor has an existing joint venture or technology transfer/trademark agreement in the same field. The onus to provide requisite justification as also proof to the satisfaction of the Government that the new proposal would or would not in any way jeopardize the interests of the existing joint venture or technology/trademark partner or other stake holders would lie equally on the foreign investor/technology supplier and the Indian partner. (ii) Even in cases where the foreign investor has a joint venture or technology transfer/trademark agreement in the same field prior approval of the Government will not be required in the following cases: (a) Investments to be made by Venture Capital Funds registered with the Security and Exchange Board of India (SEBI). (b) Where in the existing joint venture investment by either of the parties is less than 3%; or (c) where the existing venture/collaboration is defunct or sick. (iii) In so far as joint ventures to be entered into after the date of this Press Note are concerned, the joint venture agreement may embody a conflict of interest clause to safeguard the interests of joint venture partners in the event of one of the partners desiring to set up another joint venture or a wholly owned subsidiary in the same field of economic activity. These guidelines would come into force with immediate effect.” (Emphasis supplied) Both parties have read and re-read Clause 14 and Clause 16 of the Shareholders Agreement, entered into between the petitioner and respondent Nos. 2 and 3, read as under: “14. Additional Projects/Exclusivity During the term of this Shareholders Agreement, neither MRL nor Guardian International, nor any Affiliate or Associate of either one of them shall, without the consent of MRL and Guardian International, participate, negotiate or engage, or be financially interested, directly or indirectly, in any other project for the manufacture of Float Glass, or for the fabrication of products made from Float Glass, or for the sale of Float Glass or products made from Float Glass, in India. 16. 16. Term This Shareholders Agreement shall continue in force and effect for so long as MRL (either with or without GACL and its nominees) and Guardian International (or Affiliates or Associates of Guardian International (or Affiliates or Associates of Guardian International) each shall hold not less than fifteen percent (15%) of the total issued equity shares of the Company.” Learned counsel for the petitioner vehemently submitted that so long as there is existence of clause 14, no permission can be granted by the Central Government under section 1(2) of Schedule-1 read with Rule 5(1) of the Rules, 2000. The aforesaid provisions, Regulations and clauses have been discussed hereinafter. (C) Termination of Shareholders Agreement - various letters an correspondence between the petitioner and respondent Nos. 2 and 3: Looking to the correspondence between the petitioner and respondent Nos. 2 and 3 like letter dated 29th August, 2003 (Annexure “R-6” to the affidavit-in Reply filed by respondent Nos. 2 and 3) as well as from letter dated 19th November, 2003 as well as from the correspondence dated 13th October, 2004, it appears that Modi Rubber Limited was not having sufficient fund for the investment in the joint venture. Modi Rubber Limited was trying to come out from the financial difficulties. From the letter dated 11th May, 2005 written by Mr. V.K. Modi to respondent Nos. 2 and 3, it is evident that the Modi Rubber Limited was thinking to sell of its tyre business to Apollo Tyres Limited, to come out of its sickness so as to make payment to other Secured Creditors of Modi Rubber Limited. Arbitration proceedings between GACL as well as Modi Rubber Limited are also reflected in the aforesaid communication. Further correspondence dated 22nd June, 2005 between respondent No. 2 and the petitioner also pertaining to sell of share of Modi Rubber Limited in cement companies. Relevant part thereof, reads as under: “I recently saw two newspaper stories of interest in India's Financial Express. I noticed that the Delhi High Court had given Modi Rubber permission to sell its investment in a cement company and I also noticed that a securities company had offered to purchase shares from Xerox Modi Corp., held by MRL. I assume that both of these sales require the approval of BIFR and wondered if MRL had reached the point where shares of GGL could also be approved with the blessing of interested parties? I assume that both of these sales require the approval of BIFR and wondered if MRL had reached the point where shares of GGL could also be approved with the blessing of interested parties? I look forward to seeing you next week and if you have any thoughts on these recent announcements, please lot me hear from you.” (Emphasis supplied) Looking to further correspondence dated 3rd January, 2006, a letter written by Mr. V.K. Modi to respondent Nos. 2 and 3 also reveals the fact of sale of shares of Modi Rubber Limited by financial Institutions to Apollo Tyres Limited. Looking to the further correspondence dated 2nd June, 2006, a letter is written by respondent Nos. 2 and 3 to the petitioner. It has been pointed out by respondent Nos. 2 and 3 that Modi Rubber Limited should come out of its sickness so as to make a growth of the joint venture. The relevant part of the said communication of the letter written by respondent Nos. 2 and 3 to Modi Rubber Limited, reads as under: “As you know, I have been travelling to India more regularly to reestablish relationships with the Government and others, as well as explore what other options might eventually be available should the Modi Rubber restructuring remain in BIFR indefinitely. We remain hopeful that you will be able to accomplish your objectives and we can begin our planning for future growth in the glass business. I am concerned, however, that many of our advisers believe that the many competing interests involved in the Modi Rubber restructuring will be difficult to reconcile, and that an agreement (if one is possible) will take months or years to reach. I just wanted you to know that we continue to support your activities, but if by June 30th final conclusions do not appear imminent, we will being to intensify our own activities to find some path forward. As always, we greatly respect you as a partner and are hopeful we can find mutually agreeable ways to grow India's glass industry.” (Emphasis supplied) Thus, long sickness of Modi Rubber Limited (as evident from a matter pending before BIFR), has resulted into giving of time bound schedule by respondent Nos. 2 and 3. It affects the growth of the joint venture. 2 and 3. It affects the growth of the joint venture. Further letter dated 9th June, 2006 written by Guardian to Modi Rubber Limited, also reveals the fact, that the Modi Rubber Limited is sick and is unable to invest in Gujarat Guardian Limited for restructuring of Modi Rubber Limited. New Application has been preferred before BIFR vide communication dated 9th June, 2006. Respondent Nos. 2 and 3 offered to purchase Modi Rubber Limited's all the share in Gujarat Guardian Limited so that Modi Rubber Limited can get money and can revive its business. Thus, from several communications, it has been pointed out that sickness of Modi Rubber Limited has continued for a period of approximately three long years and growth of joint venture namely Gujarat Guardian Limited has been affected due to this. It was impossible for respondent Nos. 2 and 3 to invest any more in joint venture. Even the proposal for revival before BIFR, Modi Rubber Limited has shown its willingness to sell, all the shares of Modi Rubber Limited in Gujarat Guardian Limited i.e. joint venture. Thus, it is evident that Modi Rubber Limited is not interested in retaining the shares in the joint venture. Eventhough the dividend was not given by Gujarat Guardian Limited, Modi Rubber Limited has shown proposed dividend from Gujarat Guardian Limited and pointed out before BIFR that this dividend will be given to Secured Creditors of Modi Rubber Limited. Thus, Modi Rubber Limited has shown their willingness to sell away their shares in Gujarat Guardian Limited i.e. joint venture as well as the dividend, which is to be given by Gujarat Guardian Limited. In such a situation, it was very difficult for respondent Nos. 2 and 3 to invest any more in Gujarat Guardian Limited. Clause 2.11 of the Shareholders Agreement reveals the control of the business of the joint venture. It is such a crucial clause, that if any proposal is given by respondent Nos. 2 and 3, it can be objected by Modi Rubber Limited and vice-versa. 2 and 3 to invest any more in Gujarat Guardian Limited. Clause 2.11 of the Shareholders Agreement reveals the control of the business of the joint venture. It is such a crucial clause, that if any proposal is given by respondent Nos. 2 and 3, it can be objected by Modi Rubber Limited and vice-versa. The said clause 2.11 of Shareholders Agreement, reads as under: “2.11 Neither the Board of Directors of the Company, nor any committee thereof, shall take action in any of the following mattes involving the company except upon the affirmative vote of a majority of the directors, which majority shall include at least one (1) director nominated or appointed by Guardian International and at least one (1) director nominated or appointed by MRL: (i) Obtaining any long-term loan for a term exceeding two (2) years or altering any material term or condition of any such loan. (ii) Creating any mortgage, charge or other encumbrance with respect to the Company's properties and assets except with respect to duly approved long-term loans. (iii) Obtaining long-terms or short-term borrowings in excess of Rupees one million (Rs. 1,000,000) or the equivalent thereof in other currencies during a financial year (accounting year) of the Company. (iv) Selecting banks with whom the Company shall establish long-term banking and commercial relationships. (v) Determining the amount of dividends to be paid by the company to the shareholders. (vi) Increasing the size of the Board of Directors of the company or appointing any additional director as a result of such increase. (vii) Filing any vacancy on the Board of Directors of the Company. (viii) Issuing further equity shares of the Company by any means, directly or indirectly or any increase or reduction in the share capital or issuing any securities that can be exchanged for, or converted into, equity shares of the Company (as, by way of example only, convertible debentures and preference shares). (ix) Recommending to the shareholders meeting a candidate for appointment as the auditor for the Company. (x) Undertaking the voluntary dissolution, liquidation, winding up of the Company or the merger or amalgamation of the Company with any other company. (xi) Approving the annual operating plan and capital budget of the Company and any substantial modification or deviation therefrom. (xii) Granting loans to third parties (other than trade creditors) in excess of Rupees one hundred fifty thousand (Rs. (xi) Approving the annual operating plan and capital budget of the Company and any substantial modification or deviation therefrom. (xii) Granting loans to third parties (other than trade creditors) in excess of Rupees one hundred fifty thousand (Rs. 150,000) or the equivalent value in other currencies or guaranteeing the obligation of third parties (excluding trade creditors). (xiii) Selling, leasing, exchanging or otherwise disposing of any assets of the Company having a value of more than Rupees one million (Rs. 1,000, 000). (xiv) Undertaking any new business or substantial expansion of the business contemplated under this Shareholders Agreement, including the establishment of plants for the manufacture of other types of glass or for the fabrication of products made from Float Glass. (xv) Granting any sub-license with respect to technical information, patents and other intellectual property obtained from third parties. (xvi) Providing technical assistance or services to third parties with respect to the manufacture of Float Glass or with respect to the fabrication of products from Float Glass. (xvii) Making alterations to the Memorandum and Articles of Association of the Company. (xviii) Delegating powers of the Board of Directors of the Company, including delegations of powers to any committee thereof. (xix) Determining the remuneration of directors of the Company.” (Emphasis supplied) From the aforesaid clause, it is evident that if any proposal for expansion of joint venture is placed, looking to the continuous financial sickness of Modi Rubber Limited, if a proposal is not approved then it will lead to a situation envisaged under sections 397 and 398 of the Companies Act, 1956 and the company i.e. joint venture will be a defunct company. To avoid such situation and looking to the aforesaid continuous long sickness of Modi Rubber Limited, a partner of the joint venture and keeping in mind, Clause 2.11 of the Shareholders Agreement, the growth of GGEL had become stagnant. There was no further investment by respondent Nos. 2 and 3 and subsequently, no further progress of Gujarat Guardian Limited. All these situations have led to the fact that ultimately respondent Nos. 2 and 3 have given Notice and terminated Shareholders Agreement on 21st July, 2006 and preferred an application on 22nd July, 2006 for getting approval of Union of India for starting their own Wholly Owned Subsidiary. 2 and 3 and subsequently, no further progress of Gujarat Guardian Limited. All these situations have led to the fact that ultimately respondent Nos. 2 and 3 have given Notice and terminated Shareholders Agreement on 21st July, 2006 and preferred an application on 22nd July, 2006 for getting approval of Union of India for starting their own Wholly Owned Subsidiary. As per provision of clause 1(2) of Schedule-1 read with Rule 5 of Rules, 2000 enacted under clause (b) of sub-section (3) of Section 6 read with section 47 of the Act, 1999. It also appears from the facts of the present case that this termination led to a litigation before arbitrator at U.K. Effect of this has been referred in the subsequent para but the net effect of the aforesaid factors, is an application for getting approval of Wholly Owned Subsidiary by respondent Nos. 2 and 3. (D) Decision making process by the Central Government and subjective satisfaction arrived at by the Central Government: With justifiable reasons, an application preferred by respondent Nos. 2 and 3 to the Central Government for getting approval of their Wholly Owned Subsidiary. This application is at Annexure “E” to the memo of the petition, wherein- It is stated by learned counsel for respondent No. 2 that in Phase-I, Guardian will construct a float glass manufacturing plant with a capacity of at least 600 metric tonnes per day. In phase-II, Guardian will build, on the same site glass coating facility. The project will generate approximately 500 jobs, from which, 70% will be for skilled labourers. Approximately 40% of the production will be for export. Anticipated cost of both phases of the new project will for an investment of approximately 200 US million dollars. It is highlighted that Guardian will provide foreign exchange for equity from its own fund. It is also pointed out in the said application that Guardian is one of the major companies and leader in the glass manufacturing in the world. The science and technology of respondent No. 2 and services of expert employees, a multinational team of 24 scientist from different countries will be available for advancement of technology in glass manufacturing. The benefit of research and development of respondent No. 3 will be brought in India. Thus, the investment will bring new research in India. The science and technology of respondent No. 2 and services of expert employees, a multinational team of 24 scientist from different countries will be available for advancement of technology in glass manufacturing. The benefit of research and development of respondent No. 3 will be brought in India. Thus, the investment will bring new research in India. Guardian operates 23 float glass manufacturing plants in 14 countries, including India together with its subsidiary and affiliated. Guardian International is one of the world's largest global manufacturers of float glass and fabricated glass production. As a result of the aforesaid effect, Guardian will continue their support to the exiting joint venture i.e. Gujarat Guardian Limited. All technical expertise will be continued to be given to the joint venture. In no way, interest of the joint venture will be jeopardized. Wholly Owned Subsidiary will be started in geographically area other than Gujarat so that joint venture may not be affected. Approximately 20% of the new plant will be dedicated to the coater. The new plant will produce the tinted glass, permitting the Gujarat Guardian Limited on its current product on plain glass. 50% of the total production of Wholly Owned Subsidiary will be of tinted glass. Thus, almost 70% of the new plant production will constitute of new product, which are not manufactured by the joint venture. This is also pointed out because as a cumulative effect of the aforesaid factors, lead to a fact that no interest of the joint venture or the stake holders in the joint venture are going to be jeopardized. Upon receipt of the aforesaid application, opportunity of being heard was given by FIPB. Learned counsel for the petitioner as well as respondent Nos. 2, 3, 4 and 5 were heard extensively. Their objections before FIPB also read and re-read before this Court and ultimately, FIPB has given their approval for Wholly Owned Subsidiary to respondent No. 2. A detailed minutes thereof has been drawn, which is at Annexure “C” to the affidavit-in Reply filed on behalf of respondent Nos. 2 and 3. All the factors in favour of the petitioner and in favour of respondent Nos. 4 and 5 as well as factors in favour of respondent Nos. 2 and 3 were placed before FIPB. They have been discussed at length. 2 and 3. All the factors in favour of the petitioner and in favour of respondent Nos. 4 and 5 as well as factors in favour of respondent Nos. 2 and 3 were placed before FIPB. They have been discussed at length. They have been considered accurately and thereafter, a subjective satisfaction has been arrived at on the basis of objective facts. All the relevant factors, which are required to be considered under the Act, 1999, Regulations, 2000 read with guidelines given in the form of Press Note No. 1 (2005 series) have been considered. Looking to the minutes and the impugned order passed by Central Government, I am clearly of the opinion that no irrelevant factors have been considered. On the contrary, FIPB and Central Government has considered all the relevant factors, which are necessary for taking decision under Clause 1(2) of Schedule-1 read with Rule 5(1) of the Rules, 2000. It has been argued extensively by the learned counsel for the petitioner as well as by respondent Nos. 2 and 3 that so far as effect of clause 14 of the Shareholders Agreement is concerned, even after its valid termination and despite the arbitration is pending at U.K. Central Government ought not to have granted approval. This attractive argument is not accepted by this Court mainly for the reason that grant of No Objection Certificate by Modi Rubber Limited or by respondent Nos. 4 an 5 is not a sine-qua non for taking decision for granting approval to Wholly Owned Subsidiary. Secondly for the reason that there is no such mathematical requirement that when there is non-competing clause, no such permission can be granted by the sovereign body. Thirdly for the reason that India has its own Foreign Direct Investment Policy. Several factors are going to be affected by an approval granted to Wholly Owned Subsidiary under Foreign Direct Investment Policy. Foreign Direct Investment is a complex phenomena. Several diversified factors and interests are to be considered, over and above earnings of foreign exchange. Money investment has its own policy and priority. Several factors are going to be affected by an approval granted to Wholly Owned Subsidiary under Foreign Direct Investment Policy. Foreign Direct Investment is a complex phenomena. Several diversified factors and interests are to be considered, over and above earnings of foreign exchange. Money investment has its own policy and priority. At length, learned Additional Solicitor General of India and Assistant Solicitor General of India have narrated, in detail, about this policy of Foreign Direct Investment and, therefore, an export body constituting experts has been established by Union of India known as FIPB to give advice to the Union of India, which consists of following experts: (i) Secretary to Government, Department of Economic Affairs, Ministry of Finance- Chairperson. (ii) Secretary to Government, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry. (iii) Secretary to Government, Department of Commerce, Ministry of Commerce and Industry. (iv) Secretary to Government, Economic Relations, Ministry of External Affairs. (v) Secretary to Government, Ministry of Overseas Indian Affairs.” Decision to be taken under Foreign Direct Investment Policy is not a simple phenomena of allowing or disallowing, an investment. Various pros and cons, effects and consequences (which are always, far reaching in nature) have to be discussed and deliberated and, therefore, “Fair-play in joints” have to be permitted by Court to the Government. The Court cannot replace its decision, once the decision making process is found to be legal and no irregularities or irrationalities are found by the Court. Very narrow is a scope of the judicial review, once the decision making process is found to be legal and flawless. In my opinion, there is no error whatsoever committed by Union of India and/or FIPB in their decision making process. Looking to Press Note No. 1 (2005 series), words used are as under: “One has to provide requisite justification as also proof to the satisfaction of the Government....” Thus, now guidelines, which is known as Press Note No. 1 (2005 series), a Central Government has to arrive at a subjective satisfaction. Thus, the decision arrived at by FIPB, looking to the provision of the Act, 1999, Regulations, 2000 and the competing interest of the petitioner as well as respondent Nos. 4 and 5 and the policy of a sovereign country i.e. Union of India is a subjective satisfaction on the basis of objective facts. Thus, the decision arrived at by FIPB, looking to the provision of the Act, 1999, Regulations, 2000 and the competing interest of the petitioner as well as respondent Nos. 4 and 5 and the policy of a sovereign country i.e. Union of India is a subjective satisfaction on the basis of objective facts. Even if the second view is possible, this Court is not replacing the decision of the FIPB and the Central Government. It has been repeatedly contended by the learned counsel for the petitioner as well as respondent Nos. 4 and 5 that Union of India has more than one options, when several litigations are pending before different Courts between the petitioner and respondent Nos. 2 and 3, the application could have been kept in abeyance. This contention is not accepted by this Court for the reason that once there is no error in the decision making process by FIPB and Union of India and especially when all the relevant factors have been considered, the Court will not quash the decision, on the ground of availability of another option with Central Government. It is also contended by the learned counsel for the petitioner as well as respondent Nos. 4 and 5 that generation of employment, investment of foreign exchange, new technology, etc. have not been referred in the Press Note No. 1 (2005 series) and consideration thereof is nothing but the consideration of extraneous grounds/reasons. This argument is not accepted by this Court because Press Note No. 1 (2005 series) is not a sole guiding factor. Press Note No. 1 (2005 series) is not restraining the Central Government from considering several factors, which are referred to in the Foreign Exchange Management Act, 1999 as well as Rules, 2000 enacted under sub-section (b) of sub-section (3) of Section 6 read with Section 47 of the Act, 1999. Press Note No. 1 (2005 series) adds the grounds for taking decision under clause 1(2) of Schedule-1, it never ousts other factors as contemplated under the Act, 1999 and the Regulations, 2000. The contention of the learned counsel for the petitioner as well as respondent Nos. 4 and 5 was to the effect that only, what is given in the Press Note-1 (2005 series) should be considered. Very narrow is the interpretation, if this contention is accepted by this Court. The contention of the learned counsel for the petitioner as well as respondent Nos. 4 and 5 was to the effect that only, what is given in the Press Note-1 (2005 series) should be considered. Very narrow is the interpretation, if this contention is accepted by this Court. As a part of the on going process of economic liberalization relevant to the foreign investment and foreign trade and with a view to facilitate the external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India, Foreign Exchange Management Act, 1999 has been enacted. In pursuance of Section 6(3)(b) of the Act, 1999, the Reserve Bank of India has enacted Regulations, 2000 for transfer or issue of any security by a person resident outside India and whereby a person resident outside India can purchase shares or convertible debentures of Indian Company under the Foreign Direct Investment Scheme and if such person has a previous joint venture or tie up in India, he should obtain a prior permission of Central Government. Otherwise, there is automatic route of investment. A detailed Foreign Direct Investment Policy has been published by Union of India. Several relevant factors have been referred as a goal to be achieved. The object to be achieved by Foreign Direct Investment Policy, reads as under: “Foreign Direct Investment (FDI) plays an important role in the long-term economic development of a country not only as a source of capital but also for enhancing competitiveness of the domestic economy through transfer of technology, strengthening infrastructure, raising productivity and generating new employment opportunities. FDI also has an important role in enhancing exports. We in India see FDI as a developmental tool. The policy of the Government of India is to strive to maximize the development impact and spin-offs of FDI. While the Government encourages, and indeed, welcomes FDI in all the sectors where it is permitted, we are especially looking for large FDI inflows in the development of infrastructure, technological upgradation of Indian industry through green-field investments in manufacturing, and in projects having the potential for creating employment opportunities on a large scale. We also invite investments in setting up Special Economic Zones and establishing manufacturing units therein. Indian has consistently been classified as among the most attractive investment destinations by a slew of reputed international rating organizations. We also invite investments in setting up Special Economic Zones and establishing manufacturing units therein. Indian has consistently been classified as among the most attractive investment destinations by a slew of reputed international rating organizations. With its highly-skilled and cost-effective manpower, it offers immense opportunities not only for Business Process Outsourcing, but increasingly for the higher end of the value chain in Knowledge Process Outsourcing and Engineering Process Outsourcing. In order to further improve the investment climate, a major rationalization of the FDI policy and associated procedures was recently undertaken by my Ministry. This compendium is the result of that exercise, and I am very happy to present it to be investing community.” Thus, creating opportunity on a large scale, technological upgradation of Indian Industry, for enhancing competitiveness of the domestic economy through transfer of technology, raising productivity, enhancing exports and such other various factors have been referred as a goal to be achieved by Foreign Direct Investment Policy. Thus, Press Note No. 1 (2005 series) is not ousting all the aforesaid relevant factors, which Union of India, as a sovereign body, set in front of her eyes as a goal to be achieved under the Foreign Exchange Management Act, 1999, Regulations, 2000 read with Foreign Direct Investment Policy. As a cumulative effect of the aforesaid factors, I am clearly of the opinion that all the factors, which are considered by the FIPB as well as Central Government are absolutely relevant and it cannot be said that irrelevant factors are taken into consideration. The developing country has its own Foreign Direct Investment Policy to generate employment, introducing technology, competitive business, higher production, sizeable increase in export, cannot be said to be irrelevant factors and, therefore, export body like FIPB has been constituted and opinion of the FIPB has been accepted by Central Government. In such a situation, Court is not a cost accountant or an economist or a financial adviser, therefore, Court has to look only at the decision making process and Whether the relevant factors are considered or not for arriving at the impugned decision. If the answer is affirmative, it is not open for the Court in exercise of extra ordinary jurisdiction to replace the decision, even if it is a better one. Court is not in search of better decision. The question before this Court is whether the impugned decision is in accordance with law or not. If the answer is affirmative, it is not open for the Court in exercise of extra ordinary jurisdiction to replace the decision, even if it is a better one. Court is not in search of better decision. The question before this Court is whether the impugned decision is in accordance with law or not. Judicial Review is concerned not with the merits of the decision but the manner in which the decision was taken. Judicial Review is entirely different from an ordinary appeal, otherwise under the guise of preventing of abuse of power, it could be guilty of usurping power. At length, learned counsel for both the sides have discussed various principles of judicial review and Wednesbury Unreasonableness and CCSU case. What is Wednesbury Unreasonableness and scope of judicial review is discussed in subsequent point but in this point, suffice it to say that there is no error in the decision making process and the subjective satisfaction arrived at by the expert body i.e. FIPB requires not to be altered or quashed by this Court. As per well known decision rendered by Kings Bench decided in the case of Associated Provincial Picture Houses Ltd. vs. Wednesbury Corporation, (1948) 1 KB 223 : (1947) 2 All ER 680, it has been pointed out at page no. 229 in KB 62 in All ER, reads as under: “...It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority....In another, it is taking into consideration extraneous matters. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority....In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another.” Lord Greene also observed (KB p.230: All ER p.683) “....it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body can come to. It is not what the court considers unreasonable....The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another.” (Emphasis supplied) Thus, to arrive at a conclusion that the decision taken was not a reasonable one, it must be concluded by the Court that the decision making authority has considered irrelevant factors. This is also popularly known as Wednesbury Unreasonableness as stated hereinabove. Looking to the provisions of Act, 1999, Regulations, 2000, Press Note No. 1 (2005 series) and Foreign Direct Investment Policy, in my opinion, Central Government has considered all the relevant factors. The impugned decision has been arrived at by considering the relevant factors and no irrelevant factors have been considered. No extraneous factors have favoured the mind of FIPB and Union of India, much less, the alleged two letters, one by Department of Treasury dated 3rd October, 2006 and another of U.K. dated 29th September, 2006. This Court has perused the original files pertaining to the present case. The aforesaid two letters have also been perused from the original file. Nothing is found objectionable. These two letters only favoured the case of respondent Nos. 2 and 3 and it is pointed out in these two letters that Foreign Direct Investment Policy of the sovereign body like India is matching with the need of respondent Nos. 2 and 3. Nothing more or less than this, has been reflected in these two letters. By these letters, it cannot be said that respondent Nos. 2 and 3 have been favoured by FIPB. There is no suggestion, even in these two letters, to dilute the policy of Union of India and to grant the permission to respondent nos. 2 and 3. Nothing more or less than this, has been reflected in these two letters. By these letters, it cannot be said that respondent Nos. 2 and 3 have been favoured by FIPB. There is no suggestion, even in these two letters, to dilute the policy of Union of India and to grant the permission to respondent nos. 2 and 3 nor there is any suggestion that even if application of respondent nos. 2 and 3 is found defective and even if is not matching with the Foreign Exchange Management Policy of Union of India, then also grant the permission. Even remotely, it is not suggested by these two letters that Union of India should grant permission. These two letters have been shown to the advocates appearing for the petitioner, from the original file. Looking to the original file, the allegations levelled by the petitioner are baseless and are incorrect. The decision taken by the FIPB and Union of India have not been influenced by these two letters. (E) Contractual Rights are not extinguished: As per the minutes drawn by FIPB dated 5th October, 2006 (Annexure “C” to the Affidavit-in Reply filed by respondent Nos. 2 and 3) and as per submission of learned Additional Solicitor General of India and learned Assistant Solicitor General of India on behalf of respondent No. 1, it is contended that the impugned order is merely an enabling decision for induction of Foreign Direct Investment, without prejudice to the legal/adjudicatory rights of the parties concerned, under any existing contractual agreement”. This conditions make the impugned order absolutely balanced. No contractual rights have been crystalised by Central Government while granting approval for establishment of Wholly Owned Subsidiary and, therefore, contention raised by the learned counsel for the petitioner as well as respondent Nos. 2 and 3 as to the Shareholders Agreement especially Clauses 14 and 16, and termination thereof is kept open for its decision by arbitrator. Arbitration is going on at U.K. It is rightly contended by learned Additional Solicitor General of India that arbitration and the legal proceedings in the Court/Tribunal will take time. A sovereign body i.e. Union of India cannot wait for an indefinite time as it is highly uncertain when the legal proceedings will come to an end. In the commercial transaction time, it is an essential character. A sovereign body i.e. Union of India cannot wait for an indefinite time as it is highly uncertain when the legal proceedings will come to an end. In the commercial transaction time, it is an essential character. If any application is not disposed of in time bound schedule, especially when Foreign Direct Investment Application is preferred, such approval or refusal become infructuous within no time. If a sovereign body is going to give approval for Foreign Direct Investment, it ought to give in time. Otherwise, it will follow a proverb “You cannot do kindness too soon, for you do not know, how soon it will too late”. It is also contended by Learned Additional Solicitor General of India that as per Press Note No. 5 (1995 series) proposal for Foreign Direct Investment should be considered by the Board, keeping in mind, the time limit of six weeks for communicating Government decision (i.e. approval of IM or CCFI or rejection as the case may be). This time limit was of Press Note No. 3 (1997 series), which was amended and time limit was reduced and it was fixed 30 days instead of 6 weeks. Thus, grant of the approval and making it subject to the contractual rights was perhaps the best option with the Central Government and in my opinion, even second view is possible to keep such application in abeyance till arbitration proceedings are decided, cannot be replaced by this Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. No error whatsoever has been committed by the Central Government in making the impugned order, subject to the contractual rights. On the contrary, it reveals best application of mind on the part of the Union of India. (F) Litigation in Delhi High Court and Arbitration at U.K. pending: It has been repeatedly submitted by learned counsels for the petitioner as well as by respondent Nos. 4 and 5 that as the proceedings are pending before various forums, the Union of India ought not to have decided the application. It is also contended by learned counsel for respondent Nos. 2 and 3 that the present proceedings ought not to have been decided by this Court as the same prayer is prayed for before Delhi High Court. 4 and 5 that as the proceedings are pending before various forums, the Union of India ought not to have decided the application. It is also contended by learned counsel for respondent Nos. 2 and 3 that the present proceedings ought not to have been decided by this Court as the same prayer is prayed for before Delhi High Court. Neither the aforesaid contentions have been accepted by this Court because of the reason that the impugned order is made subject to the rights of the contractual rights and, therefore, arbitration proceedings are no bar for grant or refusal of the permission by Central Government. Likewise, in view of the fact that writ petition bearing Transfer Petition (Civil) No. 990 of 2006 has already been dismissed by the Hon'ble Supreme Court vide order dated 13th November, 2006 and, therefore also, the pendency of the proceedings before Delhi High Court is also no bar for this Court, to decide the present Special Civil Application. In the present Special Civil Application, permission, which has already been granted by the Central Government for establishment of the Wholly Owned Subsidiary is under challenge. Thus, this is the only petition in which the permission granted by the Central Government is under challenge. In no other Court or Courts, the permission granted by Central Government is under challenge and, therefore, pendency of petition before Delhi High Court is also no bar for this Court, to adjudicate the dispute raised by the petitioner. (G) Bona-fide of respondent Nos. 2 and 3 and sickness of Modi Rubber Limited: It is contended by learned counsel for the petitioner as well respondent Nos. 4 and 5 that there is lack of bona-fide on the part of respondent Nos. 2 and 3 in preferring the application for establishment of Wholly Owned Subsidiary and sickness of Modi Rubber Limited ought not to have been considered by the Central Government. Both these contentions are not accepted by this Court mainly for the reason that the joint venture i.e. Gujarat Guardian Limited is a sort of quasi partnership. 50% of shares in joint venture are owned by respondent Nos. 2 and 3 whereas rest of the shares are with Modi Rubber Limited, are with GACL, GMDC and are with others. Both these contentions are not accepted by this Court mainly for the reason that the joint venture i.e. Gujarat Guardian Limited is a sort of quasi partnership. 50% of shares in joint venture are owned by respondent Nos. 2 and 3 whereas rest of the shares are with Modi Rubber Limited, are with GACL, GMDC and are with others. This remaining half is also known as “Modi Block.” Looking to clause 2.11 of the Shareholders Agreement, which has been incorporated hereinabove, if any proposal for expansion or further investment, if put by respondent Nos. 2 and 3 and if not accepted by Modi Block, it will lead to a deadlock of the joint venture. This clause has been incorporated in the Articles of Association of the joint venture as Clause No. 91(c). If there is sickness of Modi Rubber Limited - another partner of the joint venture , it will have a direct bearing upon health and management of the joint venture and, therefore, health of the joint venture is not at a far away distance, if another partner is sick. Difficult will be the further investment and some times, impossible is expansion. Modi Rubber Limited, as stated hereinabove has already been declared a sick unit by BIFR and winding up order has already been passed by Allahabad High Court. In such a situation and also looking to the correspondence as referred to in the present petition, no sound partner will further invest in the joint venture nor will he put a proposal for expansion. There will always be an apprehension, that if such proposal is not accepted by Modi Rubber Limited, it will lead to situation that joint venture will become defunct company under Sections 397 and 398 of the Companies Act, 1956. To avoid such a situation, respondent Nos. 2 and 3 have already offered for purchase of shares of Modi Rubber Limited in the joint venture as it was not accepted to the Modi Rubber Limited. Respondent Nos. 2 and 3 offered their shares in the joint venture, if Modi Rubber Limited is ready and willing to purchase the shares, but it could not purchase the shares of respondent Nos. 2 and 3 in the joint venture. Looking to the facts of the present case, it appears that respondent Nos. Respondent Nos. 2 and 3 offered their shares in the joint venture, if Modi Rubber Limited is ready and willing to purchase the shares, but it could not purchase the shares of respondent Nos. 2 and 3 in the joint venture. Looking to the facts of the present case, it appears that respondent Nos. 2 and 3 waited for three long years in the hopes that Modi Rubber Limited will come out of difficulties. A businessman cannot wait in the business for such a long period under the hope that another partner will come out of the sickness. Day by day sickness of Modi Rubber Limited increased and it leads to winding up order. Shareholders Agreement, therefore, brought to an end as referred hereinabove on 21st July, 2006. Even respondent Nos. 2 and 3 have written letters to other Shareholders like GACL and GMDC for grant of No Objection Certificate. Thus, there is no lack of bona-fide on the part of respondent Nos. 2 and 3. It appears from the facts of the case that sickness of Modi Rubber Limited has a direct nexus with health of the joint venture. Further investment and expansion was not possible without help of another partner i.e. Modi Rubber Limited and in this situation, an application has been preferred and entertained by Union of India in consonance with the provision of the Act, 1999, Regulations, 2000, Press Note No. 1 (2005 series) and keeping in mind the Foreign Direct Investment Policy. (H) Policy Decision: It is vehemently submitted by the learned counsel for the petitioner as well as respondent Nos. 4 and 5 that while taking the decision by Union of India, no other factors ought to have been considered except what is referred in Press Note No. 1 (2005 series). The ground referred in this Press Note No. 1 (2005 series) is Whether the interest of the joint venture or the stake holders are going to be jeopardize or not and, therefore, Union of India cannot consider any other factors. This attractive arguments of learned counsel of the petitioner as well as respondent Nos. 4 and 5 is not accepted by this Court mainly for the reason that Press Note No. 1 (2005 series) is not ousting or is not ignoring several other factors and parameters. This attractive arguments of learned counsel of the petitioner as well as respondent Nos. 4 and 5 is not accepted by this Court mainly for the reason that Press Note No. 1 (2005 series) is not ousting or is not ignoring several other factors and parameters. It ought to be kept in mind by Union of India while granting or refusing the permission, the object and goal to be achieved by the Act, 1999, Regulations, 2000 and Foreign Direct Investment Policy. The following factors are relevant consideration for Central Government, whenever an application are preferred for grant or refusal of permission under Clause 1(2) of Schedule-1 read with Regulation 5(1) of the Regulations, 2000 enacted under clause (b) of sub-section (3) of Section 6 and Section 47 of the Act, 1999: (i) enhancement of competitiveness of domestic economy; through transfer technology. (ii) strengthening infrastructure. (iii) raising productivity. (iv) generating new employment opportunities. (v) large FDI inflows in the development of infrastructure. (vi) technological upgradation of Indian industry. (vii) such other factors. The aforesaid factors are also the factors, which are required to be kept in mind, while grating permission for Wholly Owned Subsidiary and if all the aforesaid factors are favourable for Foreign Direct Investment, it cannot be said that permission should be refused and, therefore, Press Note No. 1 (2005 series) is merely adding a ground namely whether any interest of the joint venture is going to be jeopardize or not. Press Note No. 1 (2005 series) cannot oust the aforesaid parameters. Some factors may be in favour of the joint venture. Some factors may be in favour of the original applicant. For proper checking and taking a balancing view in the best interest of the Country, a committee of the highly skilled persons is constituted, known as “FIPB.” In the facts of the present case, concerned parties were heard by FIPB and considering all the relevant factors as referred hereinabove including sickness of Modi Rubber Limited and also keeping in mind to the termination of the Shareholders Agreement and also keeping in mind the arbitration proceedings pending at U.K. in my opinion, no error has been committed by the Central Government for grant of permission for establishment of Wholly Owned Subsidiary. There is no error in decision making process. There is no “Wednesbury Unreasonableness”. The decision taken by the Central Government is not shockingly disproportionate. There is no error in decision making process. There is no “Wednesbury Unreasonableness”. The decision taken by the Central Government is not shockingly disproportionate. Looking to the facts of the present case, there is no illegality, irrationality and procedural impropriety as per decision taken in the case of Associated Provincial Picture Houses Limited vs. Wednesbury, 1948 (1) KB 223. This decision has been clarified by Hon'ble Supreme Court in the case of Union of India and Another vs. G. Ganayutham, (1997) 7 SCC 463 especially in paragraphs 12, 13, 14, 15 and 16 thereof. Looking to the nature of the impugned order, enough care has been taken while grating approval to respondent No. 3. Relevant paras of the impugned order passed by Central Government, read as under: “6. The approval is subject to the following undertakings given by Guardian Industries Corporation USA (Guardian) in respect of their existing joint venture Gujarat Guardian Ltd. (GGL) and these form the conditions for the approval: (i) Guardian would continue to observe all its commitments towards the existing joint venture (GGL). (ii) A new Guardian plant would be at another location in a different State and geographically removed from GGL. This would allow better logistic and better logistic cost for both plants. Each plant would better concentrate in a smaller geographic part of the country smaller but still large enough to encompass large and attractive market with population growth areas. (iii) GGL will continue to have all the significant benefits of being a Guardian plant: technical support for its furnace and operations. Guardian business system, the services of Guardian international sales forces, Guardian Managing Director, training for GGL employees, assistance from other Guardian plant, services of Guardian purchasing, treasury, legal, accounting and other professionals and so on. (iv) Guardian would maximize the output of both plants to strengthen Guardian as a whole against the competition. Thus the existing GLL minor line will continue to serve all customers while the new plant's coater will add new products that GGL does not now offer. Approx. 20% of the new plant will be dedicated to the coater. The new plant can produce tinted glass allowing GGL to focus on its current product, clear glass/Guardian anticipates that 50% of total production will be tinted glass. Approx. 20% of the new plant will be dedicated to the coater. The new plant can produce tinted glass allowing GGL to focus on its current product, clear glass/Guardian anticipates that 50% of total production will be tinted glass. Thus almost 70% of the new plant production will consist of new products that are not made by GGL.” Thus, there shall not be any prejudice to the joint venture. Increased level of employment in the country has a direct nexus with the directive principles enshrined in Article 39(a) as well as Article 41 of the Constitution of India. Thus, employment generation is not a parameter, which can be ignored by Union of India. Likewise, by consideration of other parameters also, if an economy of the Country is going to be improved, as per the wisdom of the member of the expert body (in the facts of the present case i.e. FIPB) then such a decision becomes a policy decision for allowing Foreign Direct Investment in the Country and unless it is illegal, irrational or improportionate and unless there is procedural error, the Court cannot interfere in the decision taken by the Central Government. Allowing Foreign Direct Investment in the Country is an outcome of application of mind for various direct consequences and is an outcome of consideration and weighing of several pros and cons of FDI. It has been held by Hon'ble Supreme Court in the case of Union of India and Another vs. G. Ganayutham, (1997) 7 SCC 463 , in para-30 that greater will be the judicial restraint in the matters concerning governmental policies, national security or taxation, finance and economy of the country or similar such matters of grave public policy. This restraint on the part of the judiciary is described in administrative law as giving a greater margin of appreciation to the administrator in certain areas. Likewise, it has been held by Hon'ble Supreme Court in the case of Tata Cellular vs. Union of India, (1994) 6 SCC 651 in para 94 while deducing the principles of judicial review that: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. and that fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasi-administrative sphere. (I) Territorial Jurisdiction: Learned counsel for respondent Nos. 1, 2 and 3 contended that no cause of action has arisen within the territorial limit of this Court and, therefore, this Court has no jurisdiction for adjudicating the dispute raised in the present petition. This contention is also not accepted by this Court mainly for the reason that the decision taken by the Central Government is permitting the Wholly Owned Subsidiary during the existence of the joint venture. The joint venture i.e. Gujarat Guardian limited is situated within the territorial jurisdiction of this Court. The permission of the Central Government is necessary, when there is existing joint venture with the Indian partner. It is contended by Modi Rubber Limited before FIPB that interest of the joint venture is going to be jeopardized. This joint venture is having its factory premises at Ankleshwar within the territorial jurisdiction of this Court. As per the submission, the impugned order affects the rights of the joint venture and, therefore, part of cause of auction is said to have arisen within the territorial jurisdiction of this Court and, hence, as per Article 226(2) of the Constitution of India, this Court has jurisdiction to adjudicate the dispute raised in the present petition. (J) Locus-standi: Learned counsel for respondent Nos. 1, 2 and 3 submitted that the petitioner has no locus standi and there is no resolution passed by Modi Rubber Limited to file a petition before this Court. This contention is also not accepted by this Court mainly for the reason that Modi Rubber Limited is having sizeable number of shares in the joint venture. 1, 2 and 3 submitted that the petitioner has no locus standi and there is no resolution passed by Modi Rubber Limited to file a petition before this Court. This contention is also not accepted by this Court mainly for the reason that Modi Rubber Limited is having sizeable number of shares in the joint venture. Therefore, it is directly interested in the impugned decision taken by the Central Government and it is also stated in the petition especially para 2(B) of the petition that the petition is filed by Deputy Company Secretary, which is duly authorized by Board of Directors vide resolution dated 12th August, 2006. Thus, there is a resolution and petitioner company is having direct interest in the impugned decision, and, therefore, there is a locus-standi with the petitioner. The petitioner is having 21.24% shares in the joint venture. (K) Constitution of FIPB: It is contended by the learned counsel for the petitioner as well as respondent Nos. 4 and 5 that hearing was to be given by FIPB but in the facts of the present case, core group of Secretaries constituted FIPB was given hearing and, therefore, the decision vitiates and, hence, deserves to be quashed and set aside. This contention is factually incorrect. Looking to the facts of the present case, FIPB has been constituted of certain Secretaries of various Department of Union of India. As per the resolution, which are placed on record, one of the members have to go abroad for the work of Union of India. Hearing was to be completed by FIPB within time bound schedule and as expeditiously as possible and, therefore, FIPB was re-constituted and there was reshuffling but in fact, FIPB and the core group of FIPB are not two distinct and separate bodies but they are one and the same. Even the counsels for the petitioner and respondent Nos. 4 and 5 have represented their case before Core group of Secretaries. Looking to the resolution placed on record dated 18th February, 2003, 17th January, 2005 and 11th July, 2006, the FIPB and core group of FIPB are the one and the same and, therefore, there is no procedural defect in grant of hearing. This factual aspect is clarified from the Affidavit-in reply filed by the Union of India. Para-13 of the said Affidavit-in-reply, reads as under: “13. This factual aspect is clarified from the Affidavit-in reply filed by the Union of India. Para-13 of the said Affidavit-in-reply, reads as under: “13. I deny that the Department of Industrial Policy and Promotion (DIPP) had revised its opinion as falsely alleged. I say that DIPP has given its recommendations/opinion dated 29th August 2006 and this is the only recommendation/opinion. I deny that the Respondent No. 3 exercised its political clout in the US Government and/or there was any undue pressure on the Respondent No. 1 to allow the application of the Respondent No. 3, as falsely alleged. I deny that the Respondent No. 1 has neither considered nor deliberated upon the representation or that no reasons are recorded or that any extraneous factors have played role as alleged. In so far as the FIBP is concerned, it appears that the petitioners are under some misconceived notion. I reiterate that the FIPB comprises of the core group of Secretaries to Government and the present composition of FIPB is as follows: (i) Secretary to Government, Department of Economic Affairs, Ministry of Finance - Chairperson. (ii) Secretary to Government, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry. (iii) Secretary to Government, Department of Commerce, Ministry of Commerce and Industry. (iv) Secretary to Government, Economic Relations, Ministry of External Affairs. (v) Secretary to Government, Ministry of Overseas Indian Affairs. I crave leave to refer to and rely upon the Office Memorandums dated 11th July 1996, 18th February 2003 and 17th January 2005, when produced. I say that the Office Memorandum also sets out the objectives of the objectives and the functions of the Board. I also crave leave to refer to and rely upon the booklet/compendium on Foreign Direct Investment Policy (FDI) when produced. The said booklet/compendium gives an overview of the FDI policy of the Government of India. I deny that the only meeting of FIPB policy of the Government of India. I deny that the only meeting of FIPB was held on 20th October, 2006 as alleged or that the decision making process is vitiated.” Several other authorities have been cited before this Court by both sides. To avoid bulkiness of the present judgment, whatever are relevant for the decision of this Court are referred. 9. I deny that the only meeting of FIPB was held on 20th October, 2006 as alleged or that the decision making process is vitiated.” Several other authorities have been cited before this Court by both sides. To avoid bulkiness of the present judgment, whatever are relevant for the decision of this Court are referred. 9. As a cumulative effect of the aforesaid facts, reasons and judicial pronouncements, the impugned decision taken by the Central Government dated 26th October, 2006 read with the minutes drawn of 86th meeting of FIPB dated 5th October, 2006 are absolutely legal, in consonance with the provisions of the Act, 1999; Regulations, 2000; Foreign Direct Investment Policy and Press Note No. 1 (2005 Series). The petition, therefore, fails and is hereby dismissed. Notice discharged with no order as to costs. Special Civil Application No. 1698 of 2007: 10. Learned counsel for the petitioner submitted that the present petitioners are respondent Nos. 4 and 5 in Special Civil Application No. 22606 of 2006 and they have already argued out their case along with Modi Rubber Limited in Special Civil Application No. 22606 of 2006. In view of the submissions canvassed in Special Civil Application No. 22606 of 2006 and the decision rendered therein, this petition is also dismissed in view of final order is passed in Special Civil Application No. 22606 of 2006. Notice discharged with no order as to costs. Petition dismissed.