Equal shareholding is often seen as a balanced ownership model. In reality, a 50:50 structure can become highly unstable once trust breaks down between the two shareholder groups. Where both sides hold equal shares and equal board strength, even routine decisions can stall. The result is often a functional deadlock, followed by allegations of oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013.

Recent NCLT decisions show a clear trend: where equal shareholders can no longer run the company together, the tribunal is increasingly inclined to step in with practical, business-focused remedies.

Equal shareholding changes the nature of the dispute

In a typical oppression case, the complaint is that the majority has acted unfairly against the minority. In a 50:50 company, the issue is usually different. Neither side has voting control. The real problem is paralysis. Each group can block the other, and the company becomes unmanageable. This is especially true in closely held companies operating like quasi-partnerships, where both sides expect equal participation, transparency and trust.

Deadlock usually shows up in familiar ways:

disputed board meetings and minutes,
unilateral operation of bank accounts,
unauthorised transactions,
non-cooperation on statutory filings,
denial of access to records, and
competing allegations of siphoning of funds.

What tribunals focus on

The recent cases make clear that the tribunal’s central concern is not simply which side is morally more blameworthy. The focus is whether the company can continue to function in its existing structure.

In Del. Seatek India Pvt. Ltd., the Mumbai Bench found an absolute deadlock in a 50:50 company that was affecting day-to-day functioning and statutory compliance. Rather than deciding every allegation of oppression made by each side, the tribunal resolved the matter by directing one group to buy out the other, expressly stating that the order was made in view of the deadlock and in the company’s interest.

In Thrithva Healthcare Pvt. Ltd., the Hyderabad Bench also found a functional deadlock between two equal shareholders-directors. The tribunal held that both sides had acted improperly in dealing with company funds and governance, but noted that the greater operational control exercised by one director had a deeper impact on the company’s affairs. It therefore moved toward interim control measures and eventually a structured buy-out mechanism.

Conduct that attracts scrutiny

Three categories of conduct stand out in equal-shareholding disputes.

First, unilateral acts in the company’s name. If one faction enters into transactions, accepts investments, changes signatories or deals with company assets without proper board approval, tribunals are likely to treat that as a serious governance failure. In Thrithva Healthcare, the tribunal held that an investment agreement entered into by one director without board authority was not validly executed by the company.

Second, invalid or disputed board process. In deadlocked companies, meetings and minutes matter. In Del. Seatek India, one side claimed the board meeting had been cancelled, while the other side later circulated minutes of a purported meeting and sought to act on them with the bank. That kind of procedural dispute becomes central in oppression cases.

Third, non-maintenance of records and compliance failures. Tribunals treat pending filings, missing books, absence of statutory records and unaccounted transactions as strong evidence that the company’s governance has broken down. Both cases involved serious concern about compliance failure and lack of proper records.

Buy-out is becoming the preferred remedy

The clearest takeaway is that buy-out is now the tribunal’s preferred solution in many 50:50 deadlock cases. Where the parties can no longer work together, the tribunal is reluctant to force continued co-existence.

In Del. Seatek India, the tribunal relied on the only valuation report placed on record and directed the petitioning group to purchase the other group’s shares within six months.

In Thrithva Healthcare, the tribunal appointed a valuer, gave the first buy-out option to the petitioner, and provided that if neither side acquired the other’s stake, winding-up on just and equitable grounds could follow.

This shows that, in practice, the tribunal sees buy-out as the most commercially workable way to restore order where equal ownership has become unworkable.

Interim management tools are also significant

Where the company is operational and stakeholder interests are at risk, tribunals are also willing to go beyond final relief and stabilise the business through interim orders. In Thrithva Healthcare, the board was suspended, an administrator was appointed, bank operations were placed under that administrator, and forensic audits were ordered.

That approach is significant for businesses in sensitive sectors such as healthcare, infrastructure or regulated services, where the tribunal may prioritise continuity of operations over immediate adjudication of all rival accusations.

Conclusion

A 50:50 structure without a deadlock-resolution mechanism is inherently vulnerable. Once relations deteriorate, the dispute quickly moves beyond shareholder grievance and becomes a question of whether the company can be run at all.

These decisions show that tribunals are willing to use wide powers under Sections 241 and 242 to preserve the company, protect stakeholders and impose a commercial exit where necessary. In equal-shareholding cases, oppression and mismanagement is therefore not just about unfair conduct. It is equally about corporate paralysis and the tribunal’s willingness to end it.

Oppression and Mismanagement in 50:50 Companies: When Equal Shareholding Becomes a Deadlock