The court had directed DCA and central government to examine the validity of the NILE's contention that the offerer has not obtained central government's prior permission as required by the section 108 (A) of Company Act, it being the dominant undertaking.

According to MRTP Act, if any undertaking controls over 25 per cent of the total market, the undertaking will be called as `dominant undertaking'. If such a dominant undertaking proposes to acquire shares of other competitor company, it required previous approval of the central government. In this case, GMM controls about 70 per cent of the glass lined equipment market, while the other two (including NILE) share thedifference.

During April this year, Karamsad Holdings Ltd, a subsdiary of GMM, in concert with other group companies had made a public offer to buy 20 per cent of the paid-up equity of NILE Ltd at a price of Rs 40 per share. As per schedule, the offer is expeced to close on June 3, 1998. Earlier, GMM and Karamsad Securities have together acquired 2,96,200 shares which constitute 9.87 per cent of the total subscribed share capital of the company. However, NILE board, while raising dispute on the issue had decided not to transfer the shares in favour of the acquirers.