Court denies orders in application due to lack of injustice shown. Interim orders vacated, officers discharged. Respondent not to obstruct shareholder rights. No costs or stay granted.

The court did not pass any orders on the application, noting that the petitioners failed to establish substantial injustice. All interim orders were vacated, and the special officers were discharged. The court recorded that respondent No. 2 would not obstruct petitioner No. 2 from exercising his shareholder rights. There was no order as to costs, and the prayer for a stay of operation of the judgment was refused.

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Issues Involved:
1. Allegations of oppression and mismanagement u/s 397 and 398 of the Companies Act, 1956.
2. Termination of employment and authority to operate bank accounts.
3. Inspection of company records.
4. Alleged wrongful termination of tenancy and financial misconduct.
5. Equitable relief and management deadlock.

Summary:

1. Allegations of Oppression and Mismanagement u/s 397 and 398:
The petitioners alleged that respondent No. 2 treated the company as his personal property, terminated employees without board resolution, and refused inspection of company records. They claimed these actions constituted mismanagement and oppression. The court noted that no financial irregularity or misappropriation was alleged against respondent No. 2 and that the termination of services did not amount to oppression.

2. Termination of Employment and Authority to Operate Bank Accounts:
Petitioner No. 2's authority to operate the bank accounts was withdrawn, and his employment was terminated by respondent No. 2. The court found that these actions were within the managing director's powers and did not constitute oppression. The court emphasized that petitioner No. 2, as a shareholder, had limited rights and could not claim to manage the company.

3. Inspection of Company Records:
Petitioner No. 1's request for her representative to inspect the company's books was denied by respondent No. 2. The court held that petitioner No. 1 could inspect the records herself but could not delegate this right to her representative.

4. Alleged Wrongful Termination of Tenancy and Financial Misconduct:
The petitioners alleged that respondent No. 2 sought to surrender the tenancy to cause loss to the company and make secret profits. They also claimed that respondent No. 2 sold company products without proper records, risking penal proceedings. The court found no evidence of financial misconduct or misappropriation and noted that the tenancy belonged to the partnership, not the company.

5. Equitable Relief and Management Deadlock:
The court acknowledged a deadlock in management due to equal shareholding between the two groups. It noted that proceedings u/s 397 and 398 could not resolve a genuine deadlock without established misfeasance or malfeasance. The court suggested winding up the company and dissolving the partnership if the parties could not manage jointly.

Conclusion:
The court did not pass any orders on the application, noting that the petitioners failed to establish substantial injustice. All interim orders were vacated, and the special officers were discharged. The court recorded that respondent No. 2 would not obstruct petitioner No. 2 from exercising his shareholder rights. There was no order as to costs, and the prayer for a stay of operation of the judgment was refused.

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