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Details of Devas-Antrix agreement were ‘suppressed’ by some officials

Documents submitted by the Centre to the National Company Law Appellate Tribunal reveal that details related to the agreement between Devas Multimedia and Antrix were suppressed by certain officials between 2005 and 2010.

During the court proceeding arguing for the winding down of Devas Multimedia, the Additional Solicitor General cited evidence from the 104th Space Commission Meeting held in May 2005; the Cabinet note prepared in November 2005 by the Department of Space; approval of the Union Cabinet in December 2005; and 124th TAG meeting held on February 20, 2006, to show that material facts were deliberately suppressed.

-Benefits Devas-
The ASG contended that the outcome of these meetings and events resulted in benefit for Devas under the Devas Antrix agreement in January 2005.

“Neither the agreement dated 28.01.2005 nor the existence of Devas was mentioned and deliberated…the benefit, if any, that accrued to Devas in light of the above meetings and events, resulted from fraudulent activities flowing out of the suppression of material facts,” the ASG argued.

In an agenda item prepared by the DoS for the 104th Space Commission Meeting, it was stated that “a significant portion of the capacity of the spacecraft would be committed for lease to a service provider on appropriate commercial terms. DoS has already been approached by a service provider, who had undertaken to lease the capacity over a life period” – here the DoS did not mention the name of the service provider.

Finding merit in that submission, the NCLAT said: “Further, when an agreement dated 28.01.2005 had already been signed after fixing the terms therein, it was fraudulently misrepresented that the capacity would be committed on appropriate commercial terms.”

According to the NCLAT, the expression ‘a service provider’ clearly establishes the concealment of the existence of Devas, and this prevented the space commission from knowing for whom it was approving the satellite.

Based on the note, the Space Commission also approved the design and manufacture of the GSAT_6/INSAT-4E satellite, for which ₹269 crore of public money was to be allotted. The NCLAT points out that under the Devas Antrix agreement on January 28, 2005, Devas would have been the only private player enjoying the capacity. “However, the Space Commission neither reviewed the agreement dated 28.01.2005 nor knew who was going to utilise the capacity. It was misrepresented that ‘a service provider’ would utilise the capacity, instead of spelling out Devas explicitly,” the NCLAT observed.

After the approval from the Space Commission going forward to get approval from the Union Cabinet, suppression from the DoS went further. In a Cabinet Note prepared by the DoS in this regard, it was stated “ISRO is already in receipt of several firm expressions of interest by service providers to utilise this satellite capacity on commercial terms”.

Here also the NCLAT points out that neither the Devas Antrix agreement nor the existence of Devas is mentioned. Touting the expression “several firm expressions of interest by service providers”, the NCLAT said: “It is an undisputed fact that Devas was the only player to utilise the capacity in the GSAT-6/INSAT-4E satellite. After completely knowing this undisputed fact, fraudulent misrepresentation is made in the Cabinet Note”.

NCLAT said that these resultant misinterpretations by the DoS to the Space Commission and the Union Cabinet mean that decisions by these cannot confer any benefits to Devas under the Devas Antrix agreement of January 28, 2005. This is why the NCLAT rejected the argument of Devas that it has a right over the satellite approved by the Cabinet. These deliberations played a major role in NCLAT’s decisions to wind down Devas. The Hindu BusinessLine

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