Balasubramanian - Trackparts of India Limited (the company) in the affairs of which this petition under section 397/398 of the Companies Act, 1956 ('the Act') alleging acts of oppression and mismanagement in the affairs of the company have been filed, is a public listed company. This company was incorporated as a private limited company in the year 1969 to take over the running business of partnership firm viz, Trackparts India. At that time, the shareholding position was as follows : Shri H.N. Bhargava 24 per cent, Shri K.N. Bhargava 24 per cent, Prem Bhargava 12 percent, others 40 per cent. There are, presently 4 Groups of shareholders, all brothers/their family members controlling among themselves about 80 per cent shares in the company. They are known as H.N. Bhargava Group (HNB), K.N. Bhargava Group (KNB), B.N. Bhargava Group (BNB) and M.N. Bhargava Group (MNB). Presently KNB and BNB are on one side and HNB and MNB are on the other side - the former being the petitioners and the later being the respondents. On the demise of HNB and MNB, their Groups are headed by Shri Dilip Bhargava, son of HNB and Mrs. Veena Bhargav a, the wife of MNB. Now the HNB group is referred as DB Group. KNB is the first petitioner and BNB is the second petitioner. DB is the second respondent and Smt. Veena Bhargava is the 3rd respondent. At the time of the incorporation of the company, HNB was the chairman and the MD of the company and after his demise in 1979, KNB and the BNH became the chairman and managing director and joint managing director respectively. This company had about 46 per cent shares in another company known as EMA India Limited. From 1983 onwards DB Group had been controlling the affairs of EMA while KNB, BNB and MNB controlled the company. The company has 4 Divisions, namely, Track Components Division, Forge Division, Track Re-building Division, all located in Kanpur and Plastic Division in Mumbai. On the date of the petition, the petitioner's Group held 27.29 per cent shares and the respondents' Group 51.87 per cent, the financial institutions about 9 per cent and the public held the balance.

2. A family agreement was entered into on 23-3-1991 between the families of all the 4 brothers. At this time, the families of KNB, BNB and MNB were on one side known as KN group and the DB group on the other side. (Annexure-F). This agreement provided for: DB group having 5 directors on the Board of the company, an Operations Committee consisting of two nominees each of KN group, DB group, the eldest member of the groups being the CMD, equalisation of shareholding of both the groups, pre-emptive right with each group to acquire the shares of the other group in case the other group desired to sell the shares and amendment to the articles as per the Annexure-B enclosed to the agreement etc., Subsequent to this agreement, the articles were amended to incorporate relevant clauses of the agreement. Five nominees of the DB group were inducted into the Board as per the agreement. The 2nd respondent was also inducted as a director and he was appointed as a whole-time director some time in 1996. Some time in 1994, a new division viz., Plastic Division was started in Maharashtra with an investment of about Rs. 20 crores. Unfortunately this division has not been doing well and it started accumulating heavy losses and the genesis of this petition can be directly traced to the differences between the parties on the functioning of this division.

3. The allegations in the petition could be summarised as follows: (the first petitioner and the second respondent will, hereinafter, be referred to as the petitioner and the respondent, respectively): The DB group has not complied with the terms of the family settlement relating to the equalisation of the shareholding in terms of clause 20 of the family settlement, even though it had nominated 5 directors on the board including the 2nd respondent as per the said agreement. In view of this, instead of havin