BackNCLAT asks Devas Multimedia shareholder to approach NCLT
On Jan 19, the Bengaluru bench of the NCLT had admitted the petition by Antrix Corporation, the commercial arm of ISRO, for winding up Devas Multimedia and has appointed a provisional liquidator for the company
PremiumNEW DELHI : The National Company Law Appellate Tribunal (NCLAT) has asked Devas Employees Mauritius to approach NCLT to raise its objection over the court's decision to admit a petition by Antrix Corporation seeking winding up of Devas Multimedia.
While disposing of its plea, the Chennai bench of the NCLAT has directed Devas Employees Mauritius to file an interlocutory application and be a party in the ongoing matter at the NCLT.
On January 19, the Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted the petition by Antrix Corporation, the commercial arm of Indian Space Research Organisation (ISRO), for winding up Devas Multimedia and has appointed a provisional liquidator for the company.
It had also directed the provisional liquidator to take control of the management, properties and actionable claims of Devas Multimedia.
The NCLT order was challenged before the NCLAT by Devas Employees Mauritius, which holds 3.48% of issued equity share of Devas Multimedia.
Devas Employees Mauritius has submitted that being a shareholder of Devas Multimedia, being its constituent Board Member and owner and hence it has a say in the manner in which the company, its affairs, management etc are carried out.
According to the petitioner, the NCLT order of January 19, affects its right to participate in the affairs’ and management of Devas Multimedia.
However, the NCLAT observed: "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."
The NCLAT Chennai bench, which consisted Member (Judicial) Justice Venugopal M and Member (Technical) Balvinder Singh directed it to file an application before NCLT, to be a party into the main matter.
“….deems it fit and proper in ‘Directing’ the ‘Appellant’ to file necessary ‘Interlocutory Application’ before the ‘Tribunal’ (NCLT) seeking permission to implead itself in the main pending Company Petition setting out necessary facts/reasons for the same," said NCLAT in its order passed on February 11.
It further said NCLT shall provide ‘reasonable opportunity of being heard’ to the respective sides by “adhering to the ‘Principles of Justice’, and to pass an order ascribing reasons on merits, of course, in the manner known to ‘Law’ and in accordance with ‘Law’.
The appellate tribunal said this order is “without traversing / and not delving deep into the controversies centering around the pending" main petition and granted liberty to Devas Employees Mauritius “to raise all factual and legal pleas before the ‘Tribunal."
In its plea Devas Employees Mauritius had contended that Antrix Corporation had not filed any separate application for appointing ‘Provisional Liquidator’ and their reliefs were just mentioned in the petition filed before the tribunal’.
However, rejecting its claims, Antrix Corporation submitted before the NCLAT that it had served a notice both on the company petition and the application for the appointment of a ‘Provisional Liquidator. Their counsel had not only appeared on behalf of ‘Devas’ and also made submissions which were taken on record by the ‘Tribunal’.
Antrix also submitted that NCLT was empowered to pass appropriate ‘Ad-Interim Orders’ at the stage of ‘Admission’.
Devas Multimedia was incorporated on December 17, 2004.
According to the winding up petition filed by the commercial arm of ISRO before NCLT, the then officials of Antrix Corporation including its the then chairman had executed contract dated January 28, 2005.
This was finally terminated on February 25, 2011, as it was obtained fraudulently in connivance of the then officials. The investigating agencies - CBI and Enforcement Directorate - have unearthed fraud in executing of the agreement, Antrix said.
CBI had later filed chargesheets and ED had initiated PMLA proceedings. Even the MCA had also initiated an investigation into the affairs of Devas Multimedia but a stay was granted by the Delhi High Court.
In its petition, Antrix Corporation submitted that it itself was a "victim of the fraud and corruption" to which its then chairman and other officials were a party, and on account thereof has suffered an arbitral award on September 14, 2015 running into more than half a billion dollars, which with interest, comes to more than a billion dollars today.
It has preferred an appeal before the High Court of Delhi, against the arbitral award.
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