Anil Ambani flies in private jets, has money for Rafale but no money to pay Rs 550 cr dues, asks Ericsson lawyer

Supreme Court has on Wednesday reserved its judgement on a contempt plea filed against Reliance Communication (RCom) chairman Anil Dhirubhai Ambani and and two others by Ericsson India over not clearing its dues of Rs 550 crore.

A bench of justices R F Nariman and Vineet Saran said it is reserving its verdict.

During the hearing, senior advocate Dushyant Dave, appearing for Ericsson India, said there was wilful disobedience of apex court's orders and contempt action should be initiated against them.

Dave told the bench of judges that the RCom and its group companies must be treated as one entity, according to media reports. A report in the Financial Express said. Dushyant Dave, appearing for Ericsson, argued that they (Ambani and other contemnors) “live like emperors… Fly in private jets and live in grand mansions. Surely they can pay. They have money to pay in Rafale, but don’t want to honour the SC order. How are they in all conceivable deals when they can’t pay Rs 550 crore…. They think they are god’s gift to mankind”.

Senior advocate Mukul Rohatgi, appearing for Anil Ambani and RCom, countered the argument and said no contempt was made as no orders of the apex court were violated. He argued there was no unconditional undertaking to pay Ericsson Rs 550 crore.

Ambani was present in the court for the second day.  Rohatgi pointed out that the matter was now in the bankruptcy court, according to a report in The Economic Times. “I am now nobody. It is all over. It is not in my hands now,” said Ambani.

Anil Ambani reached the Supreme Court in the morning to appear in the case. Three contempt cases have been filed by Ericsson against Ambani.

He appeared before the apex court on Tuesday also in the same case.

Ambani, Reliance Telecom Ltd chairman Satish Seth and Reliance Infratel Ltd chairperson Chhaya Virani appeared before a bench of Justices R F Nariman and Vineet Saran in pursuance to the contempt notice issued against them.

Case so far

Early this month, RCom decided to opt for insolvency proceedings following its failure to sell assets for paying back its lenders, the Anil Ambani-led telecom firm said.

The company had chalked out plans to sell assets for about Rs 25,000 crore and use it for clearing debt of around 40 lenders.

File image of Reliance Group chairman Anil Ambani. Reuters.

File image of Anil Ambani. Reuters.

RCom was expecting to realise Rs 975 crore from sale of spectrum to Jio which it promised to use paying dues of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel.

Reliance Jio, however, declined to take over any past liability of RCom for which the Department of Telecom may raise demand in future.

Contempt proceedings

Ericsson India had moved the Supreme Court seeking initiation of contempt proceedings for the second time against chairman of Reliance Communication Ltd, Anil Ambani for allegedly not complying with its order to clear dues of Rs 550 crore.

Besides seeking contempt proceedings against RCom chairman and two others, Ericsson has also sought that they be “detained in civil prison” unless they purge themselves by making the payment.

It also sought directions to the Ministry of Home Affairs to prevent Ambani, Reliance Telecom Ltd chairman Satish Seth and chairperson of Reliance Infratel Ltd Chhaya Virani from leaving the country.

“The contemnor named above having committed and guilty of contempt of court be directed to be detained in civil prison unless the aforesaid contemnors purge themselves by making payment of Rs 550 crore along with interest thereon in terms of the order dated 23 October, 2018,” the plea said.

Earlier, the Supreme Court of India had issued notice to Ambani and others on a contempt petition filed by Ericsson India over non-payment of its dues.

A bench headed by Justice R F Nariman sought a response from Ambani and others in four weeks.

Appearing for RCom, senior Advocates Kapil Sibal and Mukul Rohatgi asked the court to accept Rs 118 crore towards outstanding dues to Ericsson India to establish its bonafide.

The counsel appearing for Ericsson, however, refused to accept the amount and said the entire outstanding sum of Rs 550 crore should be deposited. The bench then directed RCom to deposit a demand draft of Rs 118 crore in the registry. The apex court had on 23 October last year asked RCom to clear the dues by 15 December saying that delayed payment would attract an interest of 12 percent per annum.

“It is respectfully being brought to the notice of this court that respondents have not paid payment of Rs 550 crore as ordered and as undertaken by 15 December, 2018 or even thereafter. Clearly, the respondents have committed a gross contempt of this court deserve to be punished for the same,” said the petition filed through advocate Bhargava V Desai.

The plea claimed that Ambani and two others have “abused the process of law to the hilt and caused grave damage to the interest of justice“.

It alleged that RCom has sold its assets and money received was not used to clear the dues and was “illegally pocketed“.

The plea sought direction to Ambani and the lenders forum to hand over Rs 550 crore with interest, as directed by the 23 October order, from the sale proceeds.

The apex court had on 23 October given one last opportunity to RCom for clearing the settlement amount. It had said that Ericsson can revive its contempt plea against Reliance if the amount is not paid by 15 December, 2018.

In its first contempt plea, Ericsson sought action against Ambani and others for failing to pay Rs 550 crore towards settlement to the company by September-end last year.

The company had alleged that RCom has “wilfully and consciously” defied the order dated August 3 of the top court and the undertaking given before it to pay up by September-end.

Ericsson India, which had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, had alleged that it had not been paid the dues of over 1,500 crore and challenged the debt-ridden firm before National Company Law Appellate Tribunal (NCLAT).

The top court had perused the 30 May last year interim order of the NCLAT and noted that Ericsson India was willing to settle its debt of over Rs 1,500 crore for a sum of Rs 550 crore which was to be paid by RCom within 120 days.

It had on 3 August last year allowed RCom to sell assets covering spectrum, fibre, telecom towers and certain real estate assets for an aggregate value of approximately Rs 25,000 crore.

With PTI inputs

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Updated Date: Feb 14, 2019 10:26:17 IST

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