INCABLE NET (ANDHRA) LIMITED Vs. APAKSH BROADBAND LTD.

JUDGEMENT

(1.) THE appellants herein (hereafter "the petitioners") filed company petition being C. P. No. 69 of 2006, before the Company Law Board (CLB), Additional Principal Bench, Chennai. It was under Sections 397, 398, 402 and 403 of the Companies Act, 1956, (the "Act", for brevity) alleging mismanagement and oppression by the majority shareholders of the first respondent -company. They prayed for various reliefs including reconstitution of board of directors of first respondent. By an order, dated December 17, 2007, Incable Net (Andhra) Ltd. v. Apaksh Broadband Ltd., [2008] 142 Comp Cas 860 (AP) the learned Company Law Board disposed of company petition declining to grant reliefs to the petitioners. Against the said order, present company appeal is filed under Section 10F of the Act.

(2.) THE short fact of the matter may be noticed for better appreciation of the submissions of the counsel. First respondent M/s. APAKSH Broadband Limited ("APAKSH", for brevity) is a company registered under the Act in the State of Andhra Pradesh. Its business is in the field of telecommunications, information technology and entertainment. Its entire authorised capital of Rs. 175 crores is issued and fully/partly subscribed (10,19,62,500 equity shares fully paid -up and 19,80,37,500 shares of Rs. 3 paid). The first petitioner is an incorporated company and the second petitioner is its managing director. All the petitioners hold fully paid up shares in APAKSH and allegedly constitute forty per cent. of the total number of members of the first respondent. Respondents Nos. 2 to 4 are directors of APAKSH. Respondent No. 5 holds 10,17,87,500 fully paid -up shares equivalent to 57 per cent. in APAKSH. In addition to these, petitioners group was allotted 7,38,75,000 partly paid shares and the fifth respondent was allotted 12,41,62,500 partly paid shares.

(3.) THEY alleged that majority equity holders and EPC contractor AKSH mismanaged funds and operation of the company. Their contention was that project was delayed due to various acts of commission and omission on the part of AKSH and project implementation remained incomplete even after expiry of the project implementation period, i.e., December, 2006.