"One of the major grounds of challenge of the sale (of the factory) as a going concern is that the objects clause in the memorandum of association of Kitchen Appliances does not contain any reference to production of colour television sets, which makes it incompetent to enter into the deal which falls outside their scope. This makes the agreement null and void," Bedekar said.

The Philips Employees union general secretary also argued that the sale agreement is supposed to have the approvals from its board members, state government and the assessing officer forregistration of transfer of immovable property under section 230A of the Income-Tax Act.