The Supreme Court has rejected an appeal filed by Devas Multimedia challenging a National Company Law Appellate Tribunal (NCLAT) Order to wind up the company.
The appellant, Devas Multimedia has challenged an order of winding up passed by the National Company Law Tribunal under Section 271(c) of the Companies Act, 2013 which was confirmed by the National Company Law Appellate Tribunal on appeals, the company in liquidation, namely, Devas Multimedia Private Limited, through its exDirector has come up with an appeal in Civil Appeal and one of the shareholders of the company in liquidation, namely, Devas Employees Mauritius Private Limited (DEMPL) has come up with another appeal.
The appellant has contended 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. Therefore, 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.
It was contended that the actual motive behind Antrix seeking the winding up of Devas, is to deprive Devas, of the benefits of an unanimous award passed by the ICC Arbitral tribunal presided over by a former Chief Justice of India and the two BIT awards and that such attempts on the part of a corporate entity wholly owned by the Government of India would send a wrong message to international investors.
The bench comprising Justice Hemant Gupta and Justice V Ramasubramanian dismissed the appeal filed by Devas Multimedia Pvt Ltd.
“We do not know if the action of Antrix 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 INR 579 crores, the investors can hope to get tens of thousands of crores of rupees, even after siphoning off INR 488 crores,” the Apex Court observed.
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