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Current Affairs

Devas-Antrix agreement termed fraud

Date: 14 September 2021 Tags: Judiciary & Judgments

Issue

The National Company Law Appellate Tribunal (NCLAT) has asked Devas Multimedia Private to shutdown.

 

Background

The Bengaluru bench of the National Company Law Tribunal (NCLT) had given the order, which was upheld by the national bench.

 

Details

  • The benefits given to Devas under the 2005 agreement were considered as fraud or misstep. The fraud was committed by individuals who were out of limelight but later came to forefront.

  • A clerk, who had no knowledge in Science and Technology or functions of Devas, had signed the 2005 agreement.  He was given remuneration for signing the agreement.

  • The NCLAT has also questioned the Indian Space Research Organization (ISRO)’s commercial arm Antrix’s for allowing a clerk to sign the agreement.

 

The deal between Devas-Antrix

  • A deal worth Rs 167 crore was signed between Antrix Corporation and Devas to lease two communication satellites for 12 years.

  • Devas was supposed to provide audio-video services to mobile platforms in India using the space or S-band on ISRO’s GSAT 6 and 6A satellites. It was just a start-up back then.

  • The UPA government cancelled the deal in 2011 on the allegations of being a favored deal.  The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were tasked with investigation.

 

The National Company Law Appellate Tribunal (NCLAT)

  • It is a permanent tribunal set up for hearing appeals from the orders of National Company Law Tribunal(s) (NCLT).

  • It was constituted by the Central Government of India under Section 410 of the Companies Act, 2013. 

  • It can also hear appeals under the Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC or order passed by the Competition Commission of India (CCI).

  • The structure of NCLAT includes a Chairperson, a judicial member, and a technical member. It should not consist more than eleven members.