Prior to that sometime in 1987, there was a big fight in UMNO for the presidency post between Maha and Tengku Razeleigh. Maha won by the skin of his teeth. He managed to garner only 51% of the votes. Thus at that time, politically he was a very weak UMNO President. Soon after the election, a few ministers resigned while a few were sacked by him including Dollah Badawi. Part of Maha's success was due to the support by Anwar, who was then the Youth Chief. Although he was knew in UMNO then, he was a force to reckon with and managed to secure the second Vice-Presidency post. If Anwar had not supported Maha, we won't be having the problem now. Of course you would by now have read from the other postings Najib's famous or infamous role in the fight.
Soon after the election, there were allegations of the result being rigged and ineligible UMNO members
taking part in the election. A few UMNO members went to court to have the result declared null and void. The case was heard at the High Court before Harun Hashim. Our Maha had a different strategy. Their lawyer then went to court and argued that UMNO was an illegal party by virtue of the fact that some branches were found to be illegal. That was the law then interpreted by the judge. It is like your hand being infected, then the whole body must be killed. UMNO was then declared an illegal party much to the chagrin of the UMNO members who wanted the judge to rule only on the legality of the UMNO election.
Soon after, UMNO Baru was formed and a lot of the old UMNO members including Tengku Abdul Rahman and Hussein Onn were barred from joining the party. Those who were refused membership then formed Semangat 46. The UMNO members who lost at the High court then filed an appeal to the Supreme Court. Tun Salleh Abas, as the Lord President found the issue before him of paramount importance for UMNO was the backbone of the government. He empannelled a nine judge bench to hear the appeal. That was when his problem started. Maha was not confident of winning the case before nine judges, some of whom were fiercely independent and included the five judges I mentioned above. A series of charges were then levelled against Tun Salleh. He was in the same situation as Anwar is in today except for the fact that the charges related to judicial misconduct which would lead only to his dismissal. As you say he was unceremoniously dismissed and the judiciary has never been the same since.
The charges were heard before a Tribunal presided by his No. 2 man who then became the Lord President when he was dismissed. Tun Salleh did try to apply to the High Court to injunct the Tribunal from hearing his case on the ground that his No.2 man was an interested party. His application was heard before Ajaib Singh and lawyers all around agreed that he made a very 'ajaib' decision, just like the Nalla's case. Tun Salleh failed in his application.
The five judges above convened a Supreme Court hearing to overule Ajaib's decision on application by the lawyer Aziz Addruse. They made a ruling prohibiting the Tribunal form submitting its report to the YDA. The five judges then got themselves suspended instead and were charged for judicial misconduct. A Tribunal was assembled and three Supreme Court Judges were eventually dismissed for discharging their judicial duty.
When the No.2 man became Lord President, the UMNO case were heard by a five man judges. As expected, they upheld the High court decision. A detailed account on this issue could be obtained from Tun Salleh's account of the incident in his book Black May( if I'm mistaken). As for the operation Lallang, it happened sometime in Oct.1987, after theUMNO election where about 106 politicians, social activists and others were detained under the ISA. You can read this in Lim Kit Siang's Homepage under archives section-Human rights.
History is repeating itself. Let's hope that Allah protect those who are right this time.