Home India Supreme Court upholds NCLAT order to wind up Devas

Supreme Court upholds NCLAT order to wind up Devas

Devas Deal

The Supreme Court on Monday upheld the National Company Law Appellate Tribunal (NCLAT) order winding up Devas (Digitally Enhanced Video and Audio Services) Multimedia Private Limited, which in association with ISRO’s house arm Antrix Corporation aimed to ship video, multimedia and data providers by way of satellite tv for pc to cellular receivers in automobiles and cell phones throughout India.

The court docket acknowledged that it’s a case of “fraud of a huge magnitude which cannot be brushed under the carpet, as a private lis (suit)”.

A bench of Justices Hemant Gupta and V Ramasubramanian dismissed the attraction filed by Devas. The court docket acknowledged that the “finding of the Tribunal, (a) that a public largesse was doled out in favour of Devas, in contravention of the public policy in India; (b) that Devas enticed Antrix/ISRO to enter into an MoU followed by an Agreement by promising to provide something that was not in existence at that time and which did not come into existence even later; (c) that the licenses and approvals were for completely different services; and (d) that the services offered were not within the scope of SATCOM Policy etc. are actually borne out by records”.

Writing for the bench, Justice Ramasubramanian mentioned, “If the seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas, every part of the plant that grew out of those seeds, such as the Agreement, the disputes, arbitral awards, etc., are all infected with the poison of fraud”.

The National Company Law Tribunal had ordered winding up of Devas on May 25, 2021 on a petition by Antrix. This was affirmed by NCLAT on September 8, 2021.

In arbitral proceedings, the International Chamber of Commerce (ICC) Arbitral Tribunal handed an award on September 9, 2015 directing Antrix to pay Devas $562.5 million with easy curiosity at 18% each year.

Devas contended in its attraction earlier than SC that the precise motive behind Antrix looking for winding up of Devas was to deprive Devas of the ICC Tribunal award, and that it will ship a flawed message to worldwide traders.

The apex court docket mentioned it discovered no benefit within the argument.

The judgement mentioned that “a product of fraud is in conflict with the public policy of any country including India. The basic notions of morality and justice are always in conflict with fraud and hence the motive behind the action brought by the victim of fraud can never stand as an impediment.”

The prime court docket mentioned it doesn’t know if the motion of Antrix in looking for winding up of Devas might ship a flawed message to the neighborhood of traders, however added that “allowing Devas and its shareholders to reap benefits of their fraudulent action may nevertheless send another wrong message… that by adopting fraudulent means and by bringing into India an investment in a sum of Rs 579 crore, the investors can hope to get tens of thousands of crores, even after siphoning off Rs 488 crore”.

Devas had managed to deliver funding of Rs 579 crore into India, however Rs 488 crore was later taken exterior the nation for organising subsidiary within the US.

The apex court docket didn’t agree with Devas’s submission that the FIR by CBI for offences punishable underneath Section 420, learn with Section 120B IPC, has not but been taken to its logical finish.