NCLAT asks RCom to approach NCLT for Rs 577-cr refund from Ericsson, allows resolution professional to appeal in case of adverse order

Reliance Communications (RCom) is presently going through the Corporate Insolvency Resolution Process under the supervision of the Mumbai-bench of National Company Law Tribunal.

Press Trust of India September 19, 2019 09:10:47 IST
NCLAT asks RCom to approach NCLT for Rs 577-cr refund from Ericsson, allows resolution professional to appeal in case of adverse order
  • The RP had filed and interim application with the NCLAT contending that Ericsson should return the money paid by it

  • RCom had paid a sum of Rs 577 crore to Ericsson India after the Supreme Court had directed it to pay

  • In February this year, the SC held Anil Ambani and two of his top executives guilty of contempt of court

New Delhi: The NCLAT on Wednesday declined RCom's resolution professional's (RP) plea seeking refund of Rs 577 crore from Swiss firm Ericsson, and directed the RP to approach the Mumbai-bench of NCLT for the same.

Reliance Communications (RCom) is presently going through the Corporate Insolvency Resolution Process under the supervision of the Mumbai-bench of National Company Law Tribunal.

The RP had filed and interim application with the NCLAT, contending that Ericsson, which is only an operational creditor of the company, should return the money paid by it, as RCom is now under the resolution process.

NCLAT asks RCom to approach NCLT for Rs 577cr refund from Ericsson allows resolution professional to appeal in case of adverse order

Representational image. Reuters.

However, a two-member NCLAT-bench headed by Chairperson Justice S J Mukhopadhaya asked that the RP may raise all arguments for refund of money before the NCLT.

It also said that the RP may file an appeal before it, in case of adverse order by the NCLT on this issue.

"We are not inclined to take this interim application…," said the NCLAT.

RCom had paid a sum of Rs 577 crore to Ericsson India after the Supreme Court had directed it to pay.

In February this year, the apex court held Rcom's promoter Anil Ambani and two of his top executives guilty of contempt of court for wilfully failing to pay the dues of Ericsson.

On 30 April this year, RCom withdrew the cases, which challenged an NCLT order that allowed insolvency resolution process against the company, from the NCLAT.

RCom in May last year had filed a petition before the NCLAT against the NCLT order on an insolvency plea moved by Ericsson.

The Mumbai-bench of NCLT on May 15, 2018, admitted an insolvency petition filed by Ericsson against RCom and two of its subsidiaries -- Reliance Infratel and Reliance Telecom.

The NCLAT on 30 May 2018, had stayed the operations of NCLT orders.

Ericsson India had in September 2017 moved insolvency petitions against RCom, Reliance Telecom, and Reliance Infratel before the NCLT for failing to pay their dues amounting to nearly Rs 1,500 crore.

It is estimated that RCom has been reeling under debt of over Rs 46,000 crore.

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.

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

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