Singhanias had the fear of old mistakes of joint management, practiced prior to 1994, getting repeated after the death of partner Piaggio's owner Giovanni Agnelli in December last year, company sources said.

It was this fear that made the Singhanias exercise a clause in the 1994 joint-venture agreement, which gave the Indian promoters total managerial control of the company and the right to acquire Agnelli's stake in the event of his death, sources said.

After failing to acquire Piaggio's stake, the Indian promoters of the country's second-largest scooter-maker - DK Singhania, LK Singhania, Sanjiv Shriya and others - last week filed a suit at the Kanpur civil judge's court for implementation of the joint venture agreement (JVA).

Terming the interpretation of Singhaniasto buy them out this way as "erroneous", Piaggio's India representative, Mario Emprin said the Italian firm "will oppose such interpretation of the JVA in all the necessary forums in order to safeguard its position". Earlier this month, Singhanias had written to Piaggio asking for the 23.6 per cent shares, stating it was merely exercising rights as per the JVA.

It was only after Piaggio's reply, where it stated that this interpretation was erroneous, did the Indian partner decide to move court, sources said.

This "buy out" clause was inserted in the new JVA only because problems were envisaged by the Indian promoter, particularly since Piaggio had made an unsuccessful bid to buy out Singhanias' stake in 1994. The earlier JVA did not work as two people with absolutely diverse management policies and thinking could not work together, more so because the management was divided equally. Since the joint management concept failed, Singhanias and Agnelli, who in 1994 returned to the top post in Piaggio after abrief stint in a Spanish subsidiary, decided to change the management structure with the Indian promoter, they said.

Accordingly the Singhanias got four directors on the company board as against three of Piaggio, with none of them holding any executive position, after the revised JVA.