The Dewas case is not as black and white as the government claims

To begin with, a partnership and a joint agreement were signed on 28 July 2003 by a memorandum of understanding (MOU) between Dewas’s sponsors, Forge Advisors LLC, Virginia and Antrix Corporation, before Dewas was incorporated in December 2004. Enterprise Proposal dated 15 April 2004. These two initial steps were taken during the Vajpayee government’s tenure to form the company to launch Digitally Enhanced Video and Audio Services (Dewas). The UPA assumed office in May 2004. Based on the recommendation of Dr. Shankara of the Center for Space Applications, it was decided that Devas would not be incorporated as a joint venture between Forge Advisors LLC and Antrix, but as an independent company, which would partner with . Antrix by leasing capacity on its satellite transponders. The company was incorporated in December 2004, and a capacity leasing agreement on Antrix’s satellite transponders was signed in January 2005.

In para 12.8 of the Supreme Court’s decision that Finance Minister Nirmala Sitharaman had trusted the UPA government to be corrupt, it is held that “the formation of the company, namely Dewas Multimedia Pvt Ltd, was for a fraudulent and unlawful purpose. The fact shows that the company was incorporated in December 2004, following the signing of the MoU on 28.07. Presentation 22.03.2004 and discussions took place thereafter. The ground work was clearly done during the period from March 2003 to December 2004 before the company was formally incorporated. Immediately after incorporation, the agreement was signed on 28.01.2005 Therefore, the first component of section 271(c) of the Companies Act, 2013, that is, the company was constituted expressly for fraudulent and unlawful purpose.”

The company was formed after preliminary meetings and a memorandum of understanding is the basis for establishing fraudulent intent, it is an illogical proposition. Yet, if that proposition is taken at face value, the concept of fraud originated in 2003 and April 2004, when the BJP-led Vajpayee government was in place.

Parts of the order of the Company Law Appellate Tribunal on which the Supreme Court judgment rests are absurd. “It is the stand of the ‘Appellant’, that the International Telecommunication Union (ITU) provided a portion of the ‘S-band frequencies’ to the Government of India during the year 1970, and in return, the Government of India delegated the authority. Department of Space ( DOS). Helped to move.[1]band spectrum to DoT for terrestrial use.”

The appellant referred to is either Dewas Multimedia Private Limited or Dewas Employees Mauritius Limited, as both are listed as appellants and the quoted para does not specify who has made this submission. It is also not clear whether the appellant actually made this absurd proposition, as the Tribunal is interpreting the submission of the appellant. The ITU does not allocate spectrum to national governments. Spectrum on the territory of a country belongs to the national government, and the government has no fear that the government will lose its right to spectrum if it does not use it. What the ITU does is suggest specific spectrum bands for specific uses, in order to harmonize spectrum usage across countries. Even though it is not binding, national governments can decide to allocate whatever frequency band they choose for any use.

Logical fallacies are then built upon such factual fallacies. Fraud has been detected in a company that does not have the technology it was set up to develop when the company was founded. The company’s shareholders included two American venture capital firms, Columbia Capital LLC and Telecom Ventures LLC. Venture capital firms routinely invest in companies not because they have developed a technology, but because the technology they propose to develop promises to make money and the team setting up the company has performance capability. keeps the promise. If there is a non-fraudulent bar product or service for which the capital being raised already existed at the time of inception of the company, all angel investors would be M/s Bunty and Babli and early investors in Facebook and Google Huh. They were thugs. Deutsche Telekom is another investor. It is axiomatic for the government and the Supreme Court to defraud the government of such investors.

The Supreme Court rejected the argument that the allegation of cheating in the CBI case initiated in 2016 has not yet been established by a trial court, on the grounds that the tribunal has concluded that there was a fraud and a criminal case. The standard of evidence of the case was different from that of the civil proceedings initiated by the CBI. This means that even if the court quashes the fraud charge brought against Dewas by the CBI, the Supreme Court will stand by its support for winding up the company on the ground of fraud.

The Companies Act 2013 allows the government to wind up a company in the public interest, on just and equitable grounds. Although no allegations of fraud were leveled when the UPA government canceled Antrix’s lease of satellite transponders to Dewas, essentially killing that company’s business model, the Supreme Court held the government on the grounds of both fraud and But permission was granted to allow the winding up of the company. on a just and equitable basis.

If a company can be terminated on fraud charges that have been established on the most specific grounds, as we saw the Tribunal, without being prosecuted and set up in a criminal court, and the Supreme Court of the country If such a proposal upholds and treats international arbitral awards as irrelevant, India’s reputation as a safe place in which to do business would be a serious knock.