Oppression and mismanagement relief requires ongoing company misconduct; settlement breaches and past disputes are not enough.

A petition under Sections 397 and 398 of the Companies Act, 1956 lies only for continuing oppression or mismanagement in the company's affairs as of the petition date; it is preventive, not compensatory. Grievances based on completed past acts or non-implementation of a settlement agreement do not, by themselves, constitute oppression in the conduct of company affairs. The company petition was therefore held not maintainable before the Company Law Board, and the parties were left to pursue enforcement of the settlement in a competent civil court.

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Issues: Whether the company petition alleging oppression and mismanagement based on breach of a settlement agreement and past acts disclosed a maintainable cause of action under Sections 397 and 398 of the Companies Act, 1956.

Analysis: Relief under Sections 397 and 398 is available only where the company's affairs are being conducted in a manner oppressive or prejudicial in praesenti, and the jurisdiction is preventive rather than compensatory. The complained-of conduct must disclose continuing oppression or mismanagement up to the date of the petition, and grievances founded on completed past acts or on breach of contractual obligations under a settlement deed do not, by themselves, constitute oppression in the affairs of the company. The reliefs sought in substance arose from non-implementation of the settlement agreement and were more appropriately enforceable before a civil court.

Conclusion: The petition did not satisfy the requirements of Sections 397 and 398 and was not maintainable before the Company Law Board.

Final Conclusion: The company petition and the interim applications were rejected at the threshold, with liberty to pursue enforcement of the settlement agreement in a competent civil court.

Ratio Decidendi: A petition under Sections 397 and 398 is maintainable only for ongoing oppressive or prejudicial conduct in the company's affairs, not for enforcement of contractual rights arising from past or completed disputes.

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