A day after accepting termination of the Memorandum of Understanding reached by the two sides in 2003, Shishir Bajaj went on an offensive by increasing his stake in Bajaj Hindusthan Ltd (BHL), a company in which the opposition camp of brother Rahul had also hiked his stake earlier this year.

Shishir, chairman and managing director of the country's largest sugar maker, consolidated his stake in the company to 45.65 per cent through open market purchase by picking up an additional 4.75 per cent for an estimated Rs 123.48 crore (Rs 1.23 billion).

The company's share price closed nearly 10 per cent down on the Bombay Stock Exchange on Thursday at Rs 170.35.

The move comes a day after Shishir's lawyers informed their counterparts in Rahul's camp about agreeing to end the June 2003 settlement agreement which was never implemented.

"Your client's breaches of the family settlement has caused prejudice and loss to our clients," Shishir's lawyers said in a letter to Rahul camp, agreeing to end the pact.

"...our clients having spent significant time and spent huge amounts in seeking enforcement and implementation of the family settlement in regard to which our clients reserve the right to adopt appropriate proceedings as they may be advised," they said.

As per the MoU, Bajaj Hindusthan and Bajaj Consumer Care Ltd was supposed to have gone to Shishir.  According to the letter sent by Shishir's lawyers, Rahul Bajaj had purported to terminate the agreement on October 17, 2006.

When contacted, Rahul Bajaj declined to comment saying he has not seen the letter. Shishir's side was also tight lipped over the issue, stating the matter was already pending before the Company Law Board.

Earlier in March this year, Rahul's camp increased stake in BHL to 11.9 per cent which he had described as part of "treasury operations". This was decried by his nephew Kushagra Bajaj, who said it smelled of a hostile takeover.

The two warring sides have been locked in a legal battle over the division of the Bajaj empire before CLB, which has fixed October 22 for hearing the matter.

Last month, there were fickle hopes of an out-of-court settlement with both sides seeking time from the CLB during a three-day hearing to hammer out an amicable solution.

When the CLB resumes hearing on the four-year-old case, the two sides are supposed to report about the progress their peace talks. But having failed to reach an agreement, the Board will proceed further as the case is in the last stages of hearing.