Contracts to cease to have effect unless ratified by the Government or the Government company

Contracts to cease to have effect unless ratified by the Government or the Government company.—Every contract entered into by the club in relation to the undertaking, which has vested in the Government under section 4, for any service, sale or supply and in force immediately before the appointed day, shall, on and from the expiry of a period of one month from the appointed day, cease to have effect unless such contract is, before the expiry of that period, ratified in writing by the Government, or the Government company in which such undertaking has been vested under this Act, and in ratifying such contract the Government or such Government company may make such alteration or modification therein as they, or it, may think fit:

Provided that the Government or such Government company shall not omit to ratify a contract and shall not make any alteration or modification therein—

1. (a) unless they are or it is, satisfied that such contract is unduly onerous or has been entered into in bad faith or is detrimental to the interests of the Government or such Government company; and
2. (b) except after giving the parties to the contract a reasonable opportunity of being heard and except after recording in writing its reasons for refusal to ratify the contract or for making any alteration or modification therein.