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8. Appearing for the Petitioners, Mr. Jaideep Gupta, learned Senior Advocate, submitted that the Schedule of work in the Agreement entered into between APTS and APAKSH provided that the project was to be completed and commissioned within 65 weeks, which was to end on 31st December, 2006. It also stipulated that connectivity upto the district and all mandal levels was to be completed in a phased manner within a period of seven months from the date of execution of the contract. Mr. Gupta submitted that towards that end the Respondent No.1 placed orders for supply of optic fibre cables on its sister concern, AKSH Broadband Limited, the Respondent No.5, which subsequently merged with AKSH Optifibre Limited, the substituted Respondent No.5, represented by the Respondents Nos. 2 to 4, for completion of the project. Mr. Gupta submitted that despite the fact that over a crore of rupees had been contributed by the Respondent No.1 to the Respondent No.5 towards the execution of the EPC contract, it had not achieved connectivity in any of the 23 districts of the State in terms of the Agreement dated 21st April, 2005, executed by APTS. Mr. Gupta submitted that AKSH Broadband Limited had used its sister concern, AKSH Optifibre Limited, prior to its merger, to dump useless and defective cable and to store them as part of the stores of AKSH Broadband Limited and siphoned out the monies from APAKSH Broadband Limited, purportedly for execution of the EPC contract, but without any tangible benefit to the Respondent No.1.

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(v) Vest the day-to-day administration of the 1st respondent company in a Committee of Directors comprising of a nominee from each group viz., petitioners, APTS and 5th respondent; and pass such other order(s) as the Hon'ble Board deems fit and proper in the circumstances of the case."

31. The allegation on the basis of which such reliefs have been prayed for basically is that the EPC Contractor AKSH, the Respondent No.5, which is also the majority shareholder in the Respondent No.1 Company, had mismanaged the funds and operations of the Company and the work on the project was delayed on account of the various acts of omission and commission on the part of AKSH. The reliefs prayed for have been opposed on behalf of the Respondents contending that the contractual obligations under the EPC Contract did not fall within the scope of Sections 397 and 398 of the above Act and the right of the Petitioners as shareholders was in no way affected, particularly, when the Petitioner No.2 was a Director and Vice- Chairman and a member of the Managing Committee constituted to monitor the implementation of work of the project and at no point of time had he made any grievance with regard to the EPC Contract. That apart, he had chaired the meetings of the Board and operated the bank accounts and payments made to AKSH by the Respondent No.1 Company had in most cases been done by him on behalf of the Company.

32. It is on the said foundation that a case of oppression and mismanagement has been attempted to be made out by the Petitioners. However, in the facts of the case it becomes difficult to take a different view as has been expressed both by the CLB as also by the High Court.

33. Admittedly, the Respondent No.5 is a majority shareholder in the Respondent No.1 Company and at the same time the EPC Contract has also been given by the Respondent No.1 Company to the Respondent No.5, to which transaction the Petitioner No.2, Shri R.V.R. Chowdary, was also a party in his capacity as Vice-Chairman of the Respondent No.1 Company. Besides being a party to the decision to give the EPC Contract to the Respondent No.5, the Petitioner No.2 was also instrumental in payment of large sums of money being made to the Respondent No.5 which estops him from alleging that the Respondent No.2 Company had been siphoning off the funds of the Respondent No.1 Company without diligently performing its part of the contract. There is substance in Mr. Raghavan's submissions that the EPC Contract given to the Respondent No.5 by the Respondent No.1 was a commercial contract and stands outside the ambit of Sections 397 and 398 of the Companies Act. Failure to act in terms of the contract cannot be said to have amounted to either oppression or mismanagement by the Respondent No.1. At best it can be said that the Respondent No.1 had been used as a tool or mechanism by the Respondent No.5 to acquire benefits for itself, which in the instant case, does not appear to be so, having regard to the fact that one of the Petitioners in the Company Petition was himself responsible for such payments being made.

35. From the submissions made on behalf of the respective parties and the materials on record, the point which falls for consideration in this appeal is as to whether a case of oppression and mismanagement by the majority shareholders against the minority shareholders had been established or not.

36. Whether there is any truth in Mr. Gupta's submissions as to the siphoning of funds by the Respondent No.5 Company from the Respondent No.1 Company, which had been set up as a Special Purpose Vehicle and in which the Respondent No.5 was a majority shareholder, holding about 60% of the equity shares has not been properly established. On the other hand, the materials on record indicate that the Petitioner No.2, who is a Director of the Petitioner No.1 Company, which is also a shareholder in the Respondent No.1 Company, had functioned as a Vice President of the Respondent No.1 Company and had also chaired 8 of its Meetings including the Meeting held on 21st April, 2005, in which the decision was taken to award the EPC Contract to the Respondent No.5 Company. Further more, the Petitioner No.2 had signed most of the cheques by which payments were made to the Respondent No.5 Company for supply of materials under the EPC contract. It does not lie in the mouth of the Petitioner to now contend that the funds of the Respondent No.1 Company had been siphoned by the Respondent No.5.