SC upholds NCLAT order to wind up Devas
GS Paper - 2 (Polity)
The Supreme Court 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 space arm Antrix Corporation aimed to deliver video, multimedia and information services via satellite to mobile receivers in vehicles and mobile phones across India.
What SC said
- The court stated that it is 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 appeal filed by Devas.
- The court stated 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”.
- The National Company Law Tribunal had ordered winding up of Devas on 25 May 2021 on a petition by Antrix. This was affirmed by NCLAT on 8 September 2021.
- In arbitral proceedings, the International Chamber of Commerce (ICC) Arbitral Tribunal passed an award on 9 September 2015 directing Antrix to pay Devas $562.5 million with simple interest at 18% per annum.
- Devas contended in its appeal before SC that the actual motive behind Antrix seeking winding up of Devas was to deprive Devas of the ICC Tribunal award, and that it would send a wrong message to international investors.
- The apex court did not agree with Devas’s submission that the FIR by CBI for offences punishable under Section 420, read with Section 120B IPC, has not yet been taken to its logical end.