1. The above Appeal is filed under Section 10F of the Companies Act, 1956 (“the Act”). By the above Appeal, the Appellants have impugned the order passed by the Company Law Board, Mumbai Bench (“CLB”) dated 30th January 2010 dismissing Company Petition No. 112 of 2008 which was filed by the Appellants (Original Petitioners) against the Respondents on the ground of oppression of the Appellants who are the minority shareholders of Respondent No.1 Company and mismanagement of the Respondent Company.

2. The Appellants have submitted that the following important questions of law require determination by this Court.

(1) Whether in a family Company, where there are essentially two groups of shareholders, and two Directors, and when admittedly there is deadlock with regard to the conduct of the business of the Company, the CLB ought to have granted reliefs so as to put an end to the oppression and mismanagement?

(2) Whether in a family Company, where all the other Directors and Shareholders received salaries and allowances from the Company, the nonpayment of salary to one Director and nonpayment of allowances to the Shareholders, so also to the Group Company's staff working for those Directors and Shareholders would amount to per se acts oppressive to those Shareholders?

(3) Whether the Appellants, having been specifically asked to disengage from the management of the affairs of the Company pursuant to a Memorandum of Understanding entered into between the members of the family for dividing the group companies and their assets, can ever be stopped from filing a Company Petition under Sections 397 and 398 of the Companies Act, 1956?

(4) Whether one Director could allege that the other party had breached his fiduciary duty as a Director by allegedly commencing a business that allegedly competed with the business of the Company, when he himself had breached his fiduciary duty as a Director by commencing a business that competed with the business of the Company?

(5) Whether siphoning off and diversion of funds for setting up a proprietary business by the Director/Shareholder who is in charge of the day to day affairs of the Company thereby causing huge losses to the Company, is not per se mismanagement of the Company by such Director/Shareholder?

(6) Whether, in a Company Petition under Sections 397 and 398 of the Companies Act, 1956, in respect of a family Company, the presence of an 'outsider' shareholder is enough to refuse reliefs of 'buy out' or 'sell out' by one group of shareholders of the other group of shareholders?

(7) Whether conducting the affairs of the Company in a manner which is in gross contravention of several provisions of the Act by a group of shareholders who are in charge of the day to day affairs of the Company, is not per se oppressive to the other shareholders?

3. By the consent of the parties, the above Appeal is taken up for hearing and final disposal at the stage of admission.

4. Briefly set out, the relevant facts are as under:

5. Originally Respondent No.1 – Grentex & Company Private Limited (“the Company”) was a family partnership which commenced business in the name and style of Grentex & Company in the year 1980 with late Shyamsunder Kapur, Appellant No.1 and Respondent No.2 as its Partners. Subsequently on 28th September 1992, the Company was incorporated as a Company limited by shares under the provisions of the Act. The authorised share capital of the Company is Rs. 500 lakhs divided into 50 lakhs equity shares of Rs. 10/each. The issued, subscribed and paid up capital of the Company is Rs. 373 lakhs divided into 37.3 lakhs equity shares of Rs. 10/each. The Company is engaged, inter alia, in the business of combers, worsted/semiworsted/ woolen spinners of yarns, etc. The Appellants therefore together hold 30.7775% of the issued, subscribed and paid up capital of the Company. A statement indicating shareholding of all the shareholders in the Company is reproduced hereunder:

6. Appellant N