Fraud can be a continuing cause for winding up a company under Section 271(c) of the Companies Act, 2013, allowing the Tribunal to validate the winding process independent of traditional limitations.

JUDGMENT :

V. Ramasubramanian, J.

1. Challenging an order of winding up passed by the National Company Law Tribunal under Section 271 (c) of the COMPANIES ACT , 2013 (for short the 2013 Act), which was confirmed by the National Company Law Appellate Tribunal on appeals, the company in liquidation, namely, Devas Multimedia Private Limited, through its ex-Director has come up with an appeal in Civil Appeal No.5766 of 2021 and one of the shareholders of the company in liquidation, namely, Devas Employees Mauritius Private Limited (hereinafter referred to as DEMPL) has come up with another appeal in CA No.5906 of 2021.

2. We have heard Shri Mukul Rohtagi, learned senior counsel appearing for the company in liquidation, Shri Arvind P. Datar, learned senior counsel appearing for the shareholder-appellant, Shri N. Venkataraman, learned Additional Solicitor General appearing for Respondent No. 1 herein, which is the company which moved the Tribunal for winding up the company in liquidation and Shri Balbir Singh, learned Additional Solicitor General appearing for the Union of India.

3. Brief Background

3.1 The first respondent in these appeals, namely, Antrix Corporation Limited (hereinafter referred to as Antrix), incorporated on 28.09.1992 under the COMPANIES ACT , 1956, is the commercial arm of the Indian Space Research Organisation (ISRO for short) which is wholly owned by the Government of India and coming under the administrative control of the Department of Space.

3.2 On 28.07.2003, Antrix entered into a Memorandum of Understanding with Forge Advisors, LLC, a Virginia Corporation. The intent, as spelt out in the MOU, was to make both parties become “strong and vital partners in evaluating and implementing major new satellite applications across diverse sectors including agriculture, education, media and telecommunications”. Apart from other things, the MOU contemplated Forge Advisors to provide a broad array of advisory services that included near-term tactical projects in the areas of sales, marketing, business development, strategic partnership negotiations and other related business areas and long term projects in the areas of corporate strategy, market opportunity assessment, business case development for new services, launch of new application services etc.

3.3 On 22.03.2004, Forge Advisors made a presentation proposing an Indian joint venture, to launch what came to be known as “DEVAS” (Digitally Enhanced Video and Audio Services). It was projected in the said proposal that DEVAS platform will be capable of delivering multimedia and information services via satellite to mobile devices tailored to the needs of various market segments such as(i) consumer segment,comprising of entertainment and information services to digital multimedia consoles in cars and vehicles;(ii) commercial segment,comprising of high value information services to Commercial Information Devices in commercial transport vehicles; and(iii) social segment,comprising of Developmental Information Services to Rural Information kiosks in underserved areas.

3.4 The presentation dated 22.03.2004 was followed by a proposal dated 15.04.2004. The proposal was to form “a strategic partnership to launch DEVAS, a new service that delivers video, multimedia and information services via satellite to mobile receivers in vehicles and mobile phones across India”. The proposal dated 15.04.2004 indicated that DEVAS was conceived as a new National Service, expected to be launched by the end of 2006, that would deliver video, multimedia and information services via satellite to mobile receivers in vehicles and mobile phones across India¹[Paragraph 1 of the Executive Summary of the Proposal dated 15.04.2004]. The proposal contemplated the formation of a joint venture and an obligation on the part of ISRO and Antrix to invest in one operational SB and satellite with a ground spac