(1) Where it appears to the State Government that the making of any contract relating to the undertaking under which the Company has or will have or may have liabilities was not reasonably necessary for the 'purpose of the activities of the Company or has not been entered into in- good faith, the State Government may within two years from the commencement of this Act, apply to the Court, for relief from the contract, and the Court, if satisfied after making such inquiry in the matter, as it thinks fit that he contract was not reasonably necessary for the purposes of the activities of the Company or has not been entered into in good faith, may make an order canceling or varying the contract on such terms as it may think fit to, impose and the contract shall thereupon cease to have effect or, as the case may be, shall have effect subject to such variation.
(2) Every application under this section shall conform generally to the requirements of Orders VI and VII of the First Schedule to the Code of Civil Procedure, 1908, as if such application were a plaint and all the parties to the contract which is sought to be cancelled or varied shall be made parties to the proceeding.
Compensation for acquisition of undertaking