New Delhi: The Supreme court verdict on Devas issues has again shown how the Congress Party has repeatedly created national level scams, Finance Minister Nirmala Sitharaman has said.
Launching an attack against the Congress Party, Sitharaman said the erstwhile United Progressive Alliance (UPA) government had signed an agreement that was replete with inconsistencies.
The Supreme Court, on January 17, junked an appeal filed by Devas Multimedia challenging an order to wind up the company. A bench comprising Justice Hemant Gupta and Justice V Ramasubramanian dismissed the appeal filed by Devas Multimedia Pvt Ltd. This was the final judgement against Devas in its legal fight with Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO).
“The Supreme Court has given a comprehensive order. This is a proof of how the Congress Party, when in power, misuses its position and lows the sale of resources of India for a pittance,” Finance Minister Nirmala Sitharaman said. She added that 85 percent of the funds have been siphoned off.
The National Company Law Appellate Tribunal (NCLAT) upheld the earlier order of the Bengaluru bench of the National Company Law Tribunal (NCLT), which had on May 25, 2021, directed winding up of Devas Multimedia and appointed a provisional liquidator for the purpose. The NCLT’s direction came over a petition filed by Antrix Corporation.
The NCLT had said Devas Multimedia was incorporated with a fraudulent motive to collude and connive with the then officials of Antrix Corporation to get bandwidth from it by entering into an agreement in 2005, which was subsequently cancelled by the government. This order was challenged by Devas Multimedia and its shareholder Devas Employees Mauritius Private Ltd before the Chennai bench of NCLAT, which dismissed the petition.
“The agreement was signed by the erstwhile UPA government in 2005, and post the agreement, it took 6-full years for the UPA itself to cancel the order in 2011. Even when they cancelled it, glimpses of what was completely wrong, against national security – that it was a fraud against the people of India – was obvious. Just a couple of months before the cancellation, a sitting minister was arrested in the UPA government,” Sitharaman stressed.
Arbitration headache
She said even internationally arbitral orders are upcoming just to highlight ‘what this greed of the UPA has done.’ “They may have cancelled the order in 2011, but our Government under PM Modi is fighting in every court to make sure this fraud doesn’t go away,” she said.
Sitharaman said the government will highlight the latest Supreme Court verdict at international fora where arbitration proceedings are ongoing. Devas Multimedia is currently seeking to recover $111 million compensation over the failed 2005 deal.
Investors in Devas Multimedia are pursuing seizure of funds deposited with the International Air Transport Association (IATA) by Air India, and the Airports Authority of India. On January 8, the Superior Court of the province of Quebec in Canada identified Air India as an alter ego of GoI and allowed the preliminary seizure of 50 percent of its IATA funds.
The same Canadian court had last year allowed the freezing of Airports Authority of India (AAI) and Air India (AI) assets on the appeal of Mauritius investors in the Devas company.
Long legal road
According to Devas, what the agreement intended to achieve was first-of-its-kind and tremendous innovation. As a result, Devas introduced and utilised technologies like never before and was a huge revenue generator for Antrix. Devas Multimedia was incorporated on December 17, 2004. Devas Multimedia was incorporated on December 17, 2004.
According to the winding-up petition filed by the commercial arm of ISRO before NCLT, the then officials of Antrix Corporation including its then chairman had executed a contract dated January 28, 2005. This was terminated on February 25, 2011, as it was obtained fraudulently in connivance of the then officials. Investigating agencies CBI and Enforcement Directorate have unearthed fraud in executing the agreement, Antrix had said.
The CBI later filed a charge sheet and ED had initiated PMLA proceedings. The Ministry of Corporate Affairs (MCA) had also initiated an investigation into the affairs of Devas Multimedia but a stay was granted by the Delhi High Court.
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