antrix: CA’s clean slip can’t stop Co’s fold: Supreme Court | India News – Archyworldys

NEW DELHI: Lately Antrix-Devas In a ruling, the SC ruled that a company winding-up procedure for fraud cannot be stopped by shareholders on the basis of reports from competent authorities or auditors clean note or report non-detection of fraud during the period in question.
The SC dismissed arguments by Devas and its shareholders that since the auditors’ reports of 2012, 2016, 2017 and 2020 it had been certified that “no fraud to or by the company was found or reported during the course of the audit,” according to the Antrix Deva’s business wasn’t terminated for fraud.
“The auditor’s report cannot be relied on as gospel truth nor as a legal remedy against the company,” the court said.
Writing of Judgment, Justice V Ramasubramanian, part of a bench that includes Justice Hemant Gupta, said: “The auditors/chartered accountants are not experts in criminal law, nor in the technology that was the subject of the agreement between them Antrix and devas. The statements of the competent authorities are always provided with certain additional information such as “according to the information and explanations given to us in the course of our audit” or “to the best of our knowledge and belief and according to the information and explanations given to us’.” The bank added: “The statement in the auditor’s report corresponds to the information given to them or the information selected to the best of their knowledge and belief.”
That’s what the SC said CBI registered a TANNE for the offenses under Section 420, read with Section 120B of the IPC on March 16, 2015, almost four years after the closing of the transaction. “Antrix officials, as well as government officials, were also implicated in the FIR for offenses under the Anti-Corruption Act 1988. Therefore, the complainants cannot allege breach of law on the grounds that the termination of the agreement in 2011 was not due to fraud when the fraud itself was discovered years later,” it said.
It also dismissed the liquidation defense on the grounds that Antrix also failed to raise the fraud defense during the ICC arbitration. The Chamber said: “The arbitration began in 2013 and the award itself was adopted on September 14, 2015. Antrix cannot be expected to allege fraud in the arbitration, even before the fraud is discovered.” It noted ASG N Venkataraman’s argument that all Devas shareholders were accused by the CBI in the criminal proceedings. But the CBI wasn’t even able to serve them a subpoena, he said.
The bank said: “People who avoid a criminal prosecution subpoena cannot be heard to claim they must have been heard in the dissolution motion. Using their citizenship/residency abroad, the Shareholders are pursuing proceedings to enforce (i) the ICC Arbitration Award in India; and (ii) BIT Awards abroad, even if CBI is unable to serve subpoenas for five years.”

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