Nirmala Sitharaman, India’s finance minister, called the decision a “fraud on the people of India and a scam against the country.” The government is battling the fraud in every court to ensure that it does not go unpunished.
Finance Minister Nirmala Sitharaman did not mince her words when she called the Supreme Court’s order upholding the National Company Law Appellate Tribunal (NCLAT)’s decision on the 2005 Antrix-Devas deal as “proof of the Congress’ misuse of power”.
The satellite deal in 2005 was struck between the Indian Space Research Organisation (ISRO’s) commercial arm Antrix and the Bengaluru-based start-up Devas Multimedia, to deliver video, multimedia and information services via satellite to mobile receivers in vehicles and mobile phones across India.
Antrix was to build, launch and operate two satellites and lease out 90 per cent of the satellite transponder capacity to Devas. The start-up would then use it to offer hybrid satellite and terrestrial communication services in the country.
A bench of Justices Hemant Gupta and V Ramasubramanian had dismissed the appeal filed by Devas on the NCLAT order to wind up of the start-up stating that it is a case of “fraud of a huge magnitude which cannot be brushed under the carpet, as a private lis (suit)”. This legal battle between Antrix and Devas had been going on for ten years.
Commenting on the SC verdict, the finance minister Nirmala Sitharaman said the deal was a fraud on the people of India and a fraud against the country. “The fraud in the Antrix-Devas deal was obvious and the Supreme Court’s order was proof of the Congress’ misuse of power,” she said, according to newspaper reports.
“It’s a fraud of the Congress, for the Congress and by the Congress,” she added. According to the FM, this is what the greed of the UPA has done. “The government is fighting in every court to make sure the fraud doesn’t get away,” pointed out Sitharaman.
They were fighting to save the taxpayers’ money which would have gone to pay for the Antrix-Devas deal, which she described as scandalous.
Further, Sitharaman said that after the deal was cancelled in 2011 and arbitration began, Antrix was asked to appoint an arbitrator to defend the government but it never did.
The Antrix Devas deal included 70 MHz of S-band spectrum worth ₹ 1,000 crore, which is only to be used by security forces and government-run telecom companies.
The then Congress government cancelled the deal for security reasons. But in 2016, the CBI charged former ISRO chief G Madhavan Nair and other officials for allegedly facilitating a gain of ₹578 crore to Devas. Devas had invested around ₹579 crore into India, but ₹488 crore was later taken outside the country for setting up subsidiary in the US.
Devas’ foreign investors went to international courts. In arbitral proceedings, the International Chamber of Commerce (ICC) Arbitral Tribunal passed an award on September 9, 2015 directing Antrix to pay Devas $562.5 million with simple interest at 18 per cent per annum. In 2020, a US court upheld the ICC’s order ruling that Antrix had to pay $1.2 billion to Devas. The Supreme Court however put the order on hold.
In 2021, the government directed Antrix to start a winding-up petition against Devas under the Companies Act. The National Company Law Appellate Tribunal upheld an order to wind up Devas Multimedia.
Meanwhile, Devas had 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. But the apex court said it found no merit in the argument.
The judgement said 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.”
On January 17, 2022, the SC upheld the order adding that 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.