Updated: January 22, 2021 4:14:21 am
A bench of the National Company Law Tribunal (NCLT) in Bengaluru has admitted a petition filed by Antrix Corporation, ISRO’s commercial arm, for the liquidation of the space start up Devas Multimedia and has permitted a provisional liquidator to take control of the latter’s assets.
Antrix and Devas have been engaged in legal battles in India and the US since the February 11, 2011, cancellation of a January 28, 2005, deal for ISRO to launch two communication satellites for Devas to provide digital multimedia services to mobile phones.
The petition filed with the NCLT comes three months after the confirmation by a US federal court of an international arbitration award to the tune of $ 1.2 billion to Devas as compensation for cancellation of the 2005 deal by the Indian government.
Antrix has sought liquidation of Devas on the grounds that the start up firm perpetrated a fraud in connivance with former Antrix officials to bag the satellite deal in 2005.
The “provisional liquidator is permitted to initiate appropriate action in accordance with extant provisions of the Companies Act to take control of management of R1 company (Devas Multimedia) and to take custody or control of all the property effects and actionable claims to which R1 company is entitled or appears to be entitled to and take such steps and measures as may be necessary to protect and preserve the properties of R1 company and avoid misuse of its property,” the NCLT bench said in its January 19 order admitting the Antrix petition.
“We direct the existing management of R1 company to extend full cooperation to the provisional liquidator to carry out his duties under the extant provision of companies act 2013,” the bench said.
During the hearing of the petition lawyers for Devas Multimedia objected to the liquidation plea saying it has come a long time after the dispute had arisen and that there is no urgency at present.
The bench also stated that its order would not prejudice rights of the companies in litigations in the Delhi High Court and the Supreme Court. The case is posted for hearing again on Feb 8, 2021.
In the petition, Antrix said various statutory authorities have unearthed the fraud in the executing of the 2005 agreement. “The fraud is the subject matter of investigation by two premier investigating authorities of the country, the CBI and the Enforcement Directorate,” it said.
The tribunal said the petition and arguments by Antrix lawyers proves prima facie that the company Devas had engaged in fraud. The NCLT bench has observed that “it is unheard of that a company incorporated hardly one and half months earlier is awarded a contract from the government of India without having any technical expertise in the field”.
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