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Ericsson-RCom case: Supreme Court holds Anil Ambani guilty of contempt, asks him to pay dues of Rs 453 cr in 4 weeks

  • Supreme Court said that Anil Ambani did not willfully pay Rs 550 crore dues

  • RCom chairman will be sent to jail for thee months in case of default in payment

  • Court slaps Rs 1 crore penalty on Ambani and others

The Supreme Court on Wednesday held Reliance Communication (RCom) chairman Anil Dhirubhai Ambani and others guilty of contempt in a plea filed by Ericsson India over not clearing its dues of Rs 550 crore.

The Supreme Court said that Anil Ambani did not willfully pay Rs 550 crore dues it owed to Ericsson India. He had a cavalier approach, the court observed.

The apex court held that the RCom chairman and Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani breached the undertaking given to the apex court and the related orders.

The apex court asked Reliance Telecom and Reliance Infratel to pay Rs 1 crore each in four weeks to apex court registry.

A bench comprising of Justices RF Nariman and Vineet Saran said that if the contemnor failed to make the payments within the specified period, they they will undergo a jail term of three months.

The RCom chairman and others will have to purge contempt by paying Rs 453 crore to Ericsson in four  weeks, the Supreme Court said.

The court directed that Rs 118 crore already deposited by Reliance Group in apex court registry be disbursed to Ericsson.

From undertakings given by Reliance Group's top brass, it appears they have willfully not paid the amount to Ericsson despite orders, said the court.

The Supreme Court said that any unconditional apology given by Reliance needs to be rejected as they have breached the undertaking and order.

 Ericsson-RCom case: Supreme Court holds Anil Ambani guilty of contempt, asks him to pay dues of Rs 453 cr in 4 weeks

File image of Reliance Group chairman Anil Ambani. Reuters.

Soon after the court order, Reliance Communication said it respects the Supreme Court judgment and the company shall comply with same, reported CNBC-TV18.

On 13 February, a bench of Justices RF Nariman and Vineet Sharan said it was reserving the verdict after hearing all the parties — Anil Ambani, RCom, Ericsson and others.

Senior advocates Kapil Sibal and Mukul Rohatgi appearing for Ambani then countered that no contempt of court was made by Ambani. Rohatgi contended that there was no violation and no wilful defiance of the apex court's order.

He further added that allegations of RCom having received Rs 5,000 crore from Jio was incorrect.

The counsel told the court that RCom is a public listed company with lakhs of shareholders and neither an individual director nor the entire group can be made liable for liability of the company.

Senior advocate Dushyant Dave, appearing for Ericsson, argued that Anil Ambani has personal assets worth thousands of crores and must pay the balance of Rs 550 crores dues as per court undertaking.

“They (Anil Ambani and two others) live like emperors...No one has the intention to honour the order of the SC...They think they are god's gift to mankind. They have money to be invested in Rafale. But he doesn’t want to honour the SC order,” Dave said.

Anil Ambani-led RCom had earlier agreed to deposit Rs 118 crore but the Swedish telecom equipment maker Ericsson refused to accept. The top court had asked the RCom chief to deposit the amount in its registry.

Ericsson had also requested the home ministry to issue directions to prevent Ambani, Reliance Telecom Ltd chairman Satish Seth and Reliance Infratel Ltd chairperson Chhaya Virani from leaving the country.

On 23 October last year, the top court had asked RCom to clear the dues by 15 December, 2018, stating that delayed payment would attract interest of 12 percent per annum.

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

Perusing the NCLAT May last year order, the apex court had noted that Ericsson India was willing to settle its debt of over Rs 1,500 crore for a sum of Rs 550 crore, and it has to be paid by RCom within 120 days.


With inputs from agencies

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Updated Date: Feb 20, 2019 13:49:00 IST