RCom chairman Anil Ambani reaches Supreme Court in contempt petition filed by Ericsson India

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

FP Staff February 12, 2019 11:29:34 IST
RCom chairman Anil Ambani reaches Supreme Court in contempt petition filed by Ericsson India
  • RCom chairman Anil Ambani has reached the Supreme Court to appear in a contempt petition filed by Ericsson India

  • The case deals with not clearing Ericcson's dues of Rs 550 crore

  • NCLAT allowed Ericsson to file its objection by 8 February over RCom;s plea to proceed with insolvency process

Reliance Communications chairman Anil Ambani has reached the Supreme Court on Tuesday (today) to appear in a contempt petition filed by Ericsson India over not clearing its dues of Rs 550 crore. Three contempt cases have been filed by Ericcson against Ambani.

On February 4, the National Company Law Appellate Tribunal (NCLAT) allowed telecom gear maker Ericsson India to file its objection by 8 February over Reliance Communications plea to proceed with insolvency process.

A two-member bench headed by Chairman Justice S J Mukhopadhaya also said that until further orders of the NCLAT or the Supreme Court, no one can sell, alienate, or create third party rights over RCom's assets.

"Until further orders, the Appellants, corporate debtor (RCom), Respondent(Ericsson India), guarantors or any third party will not sell, transfer or alienate any moveable or immoveable property of RCom nor invoke any guarantee or mortgage or any other instrument without prior permission of this appellate tribunal or Supreme Court," the NCLAT said.

The appellate tribunal has directed to list the matter on February 12 for orders.

Reliance opts for insolvency

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.

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 proceeedings

Ericsson India had moved the Supreme Court seeking initiation of contempt proceedings for the second time against Chairman of Reliance Communication Ltd, Anil Dhirubhai 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.

SC bench seeks response from Ambani in 4 weeks

Earlier, the Supreme Court of India had issued notice to Anil 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 R Com, 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

RCom chairman Anil Ambani reaches Supreme Court in contempt petition filed by Ericsson India

Anil Ambani, Chairman, Reliance Communications. Reuters file photo

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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