A day after the Supreme Court held that Bengaluru-based Devas Multimedia be wound up, even though it had obtained favourable international arbitral awards worth a tidy sum against Isro’s commercial arm Antrix Corporation, finance minister Nirmala Sitharaman on Tuesday accused the then UPA government of entering into a ‘fraudulent and scandalous’ deal with Devas in 2005, which led to allocation of the defence department’s valuable S-band spectrum to the firm for ‘pittance’.

Addressing a press conference here, the FM said the Narendra Modi government is now fighting the relevant cases in multiple fora to save taxpayers’ money. Devas shareholders are pursuing Indian assets abroad to recover $1.29 billion that international arbitration tribunals awarded over the satellite contract that was cancelled in 2011. They have also got a French court order for freezing Indian properties in Paris and are seeking Air India funds in Canada.

Even though the criminal aspects of the case are yet to be decided legally and Devas is equipped with the arbitral awards, the Supreme Court on Monday held that, “if the seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas, every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards etc, are all infected with the poison of fraud. A product of fraud is in conflict with the public policy of any country including India.”

The Bengaluru bench of the NCLT had in May ordered winding up of Devas and had also appointed a provisional liquidator, saying the firm was incorporated with a fraudulent motive to collude and connive with the then officials of Antrix to get bandwidth from it. The NCLT’s order was also upheld by the National Company Law Appellate Tribunal (NCLAT) in September.

Quoting the SC verdict that “comprehensively upheld” liquidation of Devas Multimedia on grounds that it was incorporated with fraudulent intentions, Sitharaman said the 2005 agreement was “a fraud on people of India, fraud against the country”. She pointed out that 70 Megahertz of S-band spectrum, including 10 Mhz reserved for defence purposes, were to be transferred to Devas as per the fraudulent agreement.

Devas initiated arbitration against the annulment of the pact at the International Chambers of Commerce (ICC). Two separate arbitrations were also initiated under the Bilateral Investment Treaty (BIT) by Mauritius investors in Devas Multimedia under the India-Mauritius BIT and by Deutsche Telekom — a German company — under the India- Germany BIT. India lost all three disputes and has to pay a total of $1.29 billion in damages.

An SC Bench comprising justices Hemant Gupta and V Ramasubramanian, while dismissing Devas’ appeal against its winding up, said “we find all the grounds of attack to the concurrent orders of the NCLT and NCLAT to be unsustainable”.

Rejecting the contentions that the actual motive of Antrix was to deprive Devas of the benefits of a unanimous award passed by the International Chamber of Commerce (ICC) arbitral tribunal in 2015, the judges said that “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 `579 crore, the investors can hope to get tens of thousands of crores of rupees, even after siphoning of `488 crore.”

–with PTI inputs