NCLAT Refuses To Entertain Devas Shareholder's Appeal Against NCLT Order Appointing Provisional Liquidator On Antrix's Plea

The National Company Law Appellate Tribunal(NCLAT), Chennai Bench, has refused to entertain an appeal filed by Devas Mauritius Employees Private Ltd - a shareholder of Devas Multimedia Private Ltd - challenging the order passed by the National Company Law Tribunal (NCLT), Bengaluru bench, which appointed a Provisional Liquidator for Devas while admitting a winding up petition filed by ISRO-arm Antrix Corporation Ltd.The NCLAT however granted liberty to the appellant, a 3.48% shareholder of Devas Multimedia , to file necessary application before the NCLT to get itself impleaded in the case to raise objections to the winding up plea.The Appellate Tribunal observed that the Tribunal has only passed an order of admission, which cannot be regarded as having affected the interests of the appellant, and added that the appellant has an opportunity to raise its objections before the NCLT."It is relevantly pointed out that just because an 'Order of Admission' is passed at the initial stage, the Appellant's interest is not likely to be affected or prejudicial because latent and patent reason that still it may get an opportunity to be heard when its Petition is Allowed", a bench of Justice Venugopal M(Judicial Member) and Balvinder Singh(Technical Member) held.It was on January 19 that the National Company Law Tribunal, Bengaluru, admitted the petition filed by Indian Space Research Organization's commercial arm Antrix Corporation Ltd to wind up Devas Multimedia under Sections 271 and 272 of the Companies Act 2013. The NCLT also appointed a provisional liquidator for Devas Multimedia after making a prima facie observation that its incorporation was done in a "fraudulent manner" and that it had "resorted to various frauds, misfeasance, connivance with officials in obtaining contract dated 28.01.2005 from Antrix".Devas Employees Mauritius Ltd., a 3.48% shareholder in Devas and also an investor approached the NCLAT against the appointment of the Provisional Liquidator on the ground that principles of natural justice were violated as they were not given adequate opportunity under the provisions of the Companies Act. Opposing this, Antrix Corporation argued that a cumulative reading of 271, 272 and 273 of the Companies Act allows the NCLT to appoint a provisional liquidator even without giving an opportunity of being heard if it is convinced of sufficient cause. Antrix also argued that the entire Appeal Memorandum did not contain a single ground of defense against the multiple allegations of fraud apparent against Devas. Lastly Antrix argued that, NCLT is an original adjudicating authority and the allegations of fraud can be decided by the NCLT and Devas can contest their case before NCLT if they can defend the case on fraud. The Provisional Liquidator, now handling the affairs of Devas submitted through his first report filed before the NCLT that it appears the company is a paper company and a complete sham entity with no business interests. Similar submissions were also made on behalf of MCA. The NCLAT dismissed the appeal filed by the shareholder/investor of Devas against the appointment of provisional liquidator stating that the can effectively be contested by them before the NCLT in the main petition by impleading themselves within two weeks.Senior Advocate PS Raman appeared for Devas Employees Mauritius Ltd before the NCLAT. Antrix was represented by Solicitor General Tushar Mehta and N Venkataraman, Additional Solicitor General, along with Chandrasekhar Bharti & Rohan K.George.On January 18, the Central Government had authorized Shri.Rakesh Shashibhushan, Chairman-cum-Managing Director of Antrix to present a petition to wind up Devas multimedia on the grounds specified under Section 271(1)(c) of the Companies Act.In 2011, the Devas-Antrix agreement of 2005 was annulled by the Centre in the backdrop of the 2G scam and allegation. On October 27, 2020, a federal court in the US had confirmed a $1.2 billion compensation awarded to Devas by an arbitration tribunal of the International Chamber of Commerce over the cancellation of the 2005 agreement between Antrix and Devas to build and launch two satellites to provide multimedia services. The Supreme Court of India had in November, until further orders, kept in abeyance the implementation of the US federal court order.Click here to read/download the order

NCLAT Refuses To Entertain Devas Shareholder's Appeal Against NCLT Order Appointing Provisional Liquidator On Antrix's Plea

LIVELAW NEWS NETWORK

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

LIVELAW NEWS NETWORK

NCLAT Refuses To Entertain Devas Shareholder's Appeal Against NCLT Order Appointing Provisional Liquidator On Antrix's Plea

LIVELAW NEWS NETWORK

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

LIVELAW NEWS NETWORK

This is a premium content
Available exclusively to
Our subscribers