Equitable relief in oppression cases may be denied for lack of good faith, and contingent settlements cannot be enforced as present obligations.

Relief under sections 397 and 398 of the Companies Act, 1956 is equitable and may be refused where the petitioner lacks good faith, has taken inconsistent stands, or seeks to repudiate obligations earlier accepted. The article also notes that an agreement dependent on contingencies under the Urban Land (Ceiling and Regulation) Act, 1976 could not be treated as a present binding obligation until the required exemption was obtained. Such an arrangement was characterised as contingent under the Contract Act and therefore not enforceable in the form sought. The discussion indicates that any later settlement, after obtaining the necessary exemption, may still be pursued separately.

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Issues: (i) Whether relief under sections 397 and 398 of the Companies Act, 1956 could be granted to a petitioner whose conduct showed lack of good faith and disregard of his own obligations. (ii) Whether the agreement dated 29 January 1982 could be declared binding and acted upon in these proceedings, when its operative terms depended on contingencies under the Urban Land (Ceiling and Regulation) Act, 1976.

Issue (i): Whether relief under sections 397 and 398 of the Companies Act, 1956 could be granted to a petitioner whose conduct showed lack of good faith and disregard of his own obligations.

Analysis: Relief under sections 397 and 398 is equitable and discretionary. The petitioner's prior litigation, inconsistent stand on earlier settlements, challenge to arrangements he had earlier accepted, and failure to honour his commitments showed want of candour and good faith. A party seeking equitable relief must approach the court with a clean record and must not use the proceedings to repudiate obligations assumed under earlier settlements.

Conclusion: Relief under sections 397 and 398 was not available to the petitioner, and this issue was decided against him.

Issue (ii): Whether the agreement dated 29 January 1982 could be declared binding and acted upon in these proceedings, when its operative terms depended on contingencies under the Urban Land (Ceiling and Regulation) Act, 1976.

Analysis: The agreement was structured around future contingencies, especially exemption under the urban land ceiling law, and could not be worked out without those contingencies being fulfilled. It was therefore in the nature of a contingent arrangement governed by sections 31 and 32 of the Contract Act. Since the required exemptions had not been obtained, the agreement could not be enforced as a binding present obligation in the manner sought.

Conclusion: The agreement could not be declared binding or enforced in the form prayed for, and this issue was decided against the petitioner.

Final Conclusion: The petitions did not warrant substantive relief under the oppression and mismanagement provisions, though the court indicated that the parties could still pursue a future settlement after obtaining the necessary exemption and, if appropriate, seek relief under section 402 of the Companies Act, 1956.

Ratio Decidendi: Equitable relief for oppression and mismanagement may be refused where the petitioner lacks good faith or has repudiated his own obligations, and a settlement dependent on unresolved contingencies cannot be enforced as a present binding arrangement.

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