SC Seeks Response From Anil Ambani on Ericsson’s Contempt Petition

Ericsson has also sought that Anil Ambani and two others be “detained in civil prison.”

Updated
Business
3 min read
File photo of Anil Ambani. 
i

The Supreme Court on Monday, 7 January, issued a notice to Reliance Communication Ltd (RCom) Chairman Anil Dhirubhai Ambani and others on a contempt petition filed by Ericsson India over non-payment of dues.

A bench headed by Justice RF 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.

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 R Com to deposit a demand draft of Rs 118 crore in the registry.

Ericsson India Seeks ‘Detention in Civil Prison’

On 5 January, Ericsson India Pvt Ltd had moved the apex court, seeking initiation of contempt proceedings for the second time against RCom chairman for allegedly not complying with its order to clear its dues.

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 crores along with interest thereon in terms of the order dated October 23, 2018", the plea said.

In civil prison, people are kept in jail but not with under-trials, and the diet money for their maintenance is paid to the authorities by the opposite party which is in litigation.

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 December 15, 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.

Plea Claims Ambani & Others ‘Abused Process of Law’

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.

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 May 30 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 August 3 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.

(This story was auto-published from a syndicated feed. No part of the story has been edited by The Quint.)

(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)

We'll get through this! Meanwhile, here's all you need to know about the Coronavirus outbreak to keep yourself safe, informed, and updated.

Liked this story? We'll send you more. Subscribe to The Quint's newsletter and get selected stories delivered to your inbox every day. Click to get started.

The Quint is available on Telegram & WhatsApp too, click to join.

Published: 
Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!