How do I establish control when taking over a porject?

Anish, Unfortunately, many times text book answers do not work because there are companies out there that have no maturity in project management principles and the management doesn't give a damn about learning these.They believe that by hiring a Project Manager, "he/she" can launch the project without any issues by using his/her 'magic wand'. But what they fail to understand is that a Project Manager alone without the support of the management and the team would definitely fail from day-1. I was recently consulting for a company that had no PMO or a Project Manager and I was very surprised that the previous management had launched several projects in the past, some successfully but most with a lot of problems. When the new management took over, they came equipped with 'new' techniques that were typically text book. They criticized the old methods and made sure that none of the old methods were followed for any project launch. Unfortunately the new management lacked expertise and didn't have a proven project management methodology and to top it all no one in the new management team had any Project Management experience. In addition, being an engineering manufacturing company, they had no one in the management with any engineering experience nor did they have anyone in the organization with such experience. All these years, they had run the company based on 'best practices'. The Engineering department in the company had a couple of professional engineers with no design/manufacturing experience. So, it was disaster. The members of the Senior management had a lot of ego because they were the people in power. So they dictated how a project should be launched. The rest of the 'team' just followed blindly. Their experience and expertise was strictly from a few renowned management books that they had read or just come across (one of them being 'The Advantage' by Patrick Lancini). However, they had no one individual (PM) to drive this. The entire management team was in the driver seat - not one willing to give it up to be a team member. It was like driving a car with 12 drivers each one pulling the wheel in a different direction. So, when I started consulting them, I recognized the issues right away. I knew that this was a potential sinking ship, and if the senior management didn't back off and hand the project over to a PM (that they needed to hire ASAP), the ship would go down ingloriously. To make the long story short, I spoke to the senior management over several meetings and educated them about the need to have a PM in the driver's seat to lead the project. I assisted them in hiring an experienced PM from manufacturing background. It took many meetings for the senior management to understand the fundamentals of project management and the importance of letting a PM lead. However it was difficult for some of them - especially the President - to let go his powers, stop micromanaging the project and start trusting the new PM. Finally I had to speak to the CEO of the parent company to intervene. Since I was an outsider, it was easy for me to get this message through. So, it took the CEO to finally have a discussion with the President and help him understand the importance of the PM role and introducing proper Project management methodologies in the company. It was all in the interest of the company. But this helped and things finally started looking good. The project also was successfully launched. Unfortunately it was an uphill battle all along.

Mr. AA-
While I agree with all of the advice (these guys are the Master of Projects-Sante and Kiron), I also sympathize with the story provided by Vinay. My business is bad Project turnaround (not by choice) and I have also been forced to demand support from the CEO directly.
You should be able to recognize the phases of the takeover. In Phase 1 everyone perceives you as a threat to them- for many reasons. During this period I meet with all the stakeholders and Team and garner as much information as possible. I also privately assess the skill set of the Team and their performance. When I have my daily staff meeting, I make it clear to the team who is the boss- not forcefully (excepting my personality), but through intelligent discussions in each of the SME areas-respect is earned -not granted by title. I outline my Plan, set rules, and enforce them. I lead by example- first one in, sometimes the last to leave.
In Phase 2, after careful evaluation, I transfer Team members, Move team members, Hire new team members in order to professionalize and fill in any holes in the skillsets. I also Communicate and implement the new organizational Plan, Communication Plan, Resource Plan, and Schedule.
In Phase 3, I focus on support and mentoring of my team, especially the Managers on the Team.
Lastly, I will leave you with some management advice I learned from my teaching days: DON'T SMILE UNTIL CHRISTMAS!
Basically, you have a period in the beginning to create and enforce the rules. If you decide to be everyone's friend in the beginning, you will never be able to go back and enforce the rules- and the respect of your Team will be lost....
GOOD LUCK!
From the trenches-
M

This response pretty much covers everything.

The only aspect I would add is to provide a comfort level to the team that you are rolling up your sleeves and joining them in the trenches and that heads will not automatically start rolling.

Beyond the comments above the first thing is to ask why the PM is assigned? If is because the project is on fire (what usually is my case) then steps to do are quit different to other situations. I think that @Kiron stated "the basic framework" to follow.

It is important to understand what is expected out of you before committing,
Understanding project requirements.
Getting to know your team (skills, strengths, shortcomings)
Current state of affairs (project metrics)

Anish,

I think step provided by Kiron cover it.