The Centre on Thursday annulled the controversial deal between the Indian Space Research Organisation's commercial arm Antrix Corporation and Bangalore-based Devas Multimedia.

The Cabinet Committee on Security (CCS), headed by Prime Minister Manmohan Singh, paved the way for annulling the agreement by declaring that the government will not be able to provide the orbit slot in S-Band to Antrix for commercial purposes, including for its existing contractual obligations, in view of strategic requirements.

At a hurriedly called press conference, Union Law Minister Veerappa Moily said that in the light of the policy decision taken by the CCS, the agreement “shall be annulled forthwith.''

Asked about the possible impact of the annulment, he said: “We have thoroughly examined the matter and ultimately we have come to the conclusion that, under the provisions of the agreement and the law governing that, it can be annulled.''

On Devas' “threat” to go to court, he said the government was ready for any legal case. “Even if they go to court, they are not likely to succeed.''

Under the deal, Antrix was to provide 70 MHz of the scarce S-Band wavelength to Devas for its digital multimedia services. This was to be done by leasing 90 per cent of the transponders in satellites GSAT-6 and GSAT-6A that are proposed to be launched by ISRO. Devas, in turn, was to pay Antrix a total of $ 300 million over 12 years.

The agreement was signed on January 28, 2005. Consequently, the Department of Space (DoS) got the Cabinet approval for the building of GSAT-6 at a cost of Rs.269 crore and GSAT-6A at a cost of Rs. 147 crore under the Commission's delegated powers.

There were complaints about the manner in which the deal was entered into and the way in which it was being operationalised.

It was found that the DoS got the approvals for building the satellites without making any reference to the fact that they were to be utilised primarily for Devas' benefit. There were also apprehensions that the government could face a heavy revenue loss owing to the deal.

The matter came up before the Space Commission at a meeting on July 2 last year. The high-power panel directed the DoS to instruct Antrix to annul the contract on the ground that there was a tremendous increase in the demand for allocation of space-based spectrum for strategic needs and societal applications.

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