Congress should explain its role in Devas-Antrix deal, says FM Nirmala Sitharaman citing SC order

The Congress government didn’t appoint any arbitrator after Devas went for international arbitration even after it was reminded to appoint one, finance minister Nirmala Sitharaman said.

She further slammed the Congress for not invoking the national security clause.

“This kind of selling of primary endowments like wavelengths, satellites or spectrum band, giving it away to private parties and making money from private parties & making a deal out if it marks the feature of the Congress govts,” Nirmala Sitharaman said on the Devas-Antrix issue.

Sitharaman said that the Modi government is fighting to save the taxpayers’ money which would otherwise have gone to pay for the scandalous Antri-Devas deal. She said that the arbitration tribunals have awarded $1.2 bn plus cost and interest on pleas by Devas shareholders against cancellation of Antrix deal.

The Supreme Court dismissed the appeal from Devas challenging the NCLAT order for winding up of the company.

“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.

“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 bench said.

The commercial arm of ISRO, Antrix, had filed a winding up petition before the NCLT.

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.

Devas challenged the order in NCLAT which dismissed the petition.

Devas was incorporated in 2004 and in January 2005 it entered into an agreement with Antrix under which the commercial arm of ISRO will launch two satellites and lease out S band spectrum to Devas which would use it for hybrid satellite and terrestrial communication services.

In 2011, the then UPA-II government cancelled the deal citing “national security” reasons. This after the UPA government faced allegations of quid pro quo or a sweetheart deal.

The top court said it does not know if the action of Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO), in seeking the winding up of Devas may send a wrong message to the community of investors.

“But allowing Devas and its shareholders to reap the benefits of their fraudulent action, may nevertheless send another wrong message namely that by adopting fraudulent means and by bringing into India an investment in a sum of Rs 579 crores, the investors can hope to get tens of thousands of crores of rupees, even after siphoning off Rs 488 crore,” the bench said.

The apex court refused to agree with the submission of Devas that the criminal complaint filed for the offences punishable under Section 420 read with Section 120B IPC, has not yet been taken to its logical end.

“It is contended that in case the officials of Antrix and shareholders of Devas are acquitted after trial, the clock cannot be put back if the company is now wound up. Attractive as it may seem at first blush, this contention cannot hold water, if scrutinised a little deeper.

“The standard of proof required in a criminal case is different from the standard of proof required in the proceedings before NCLT. The outcome of one need not depend upon the outcome of the other, as the consequences are civil under the Companies Act, 2013 and penal in the criminal proceedings,” the bench said.

(With inputs from PTI)