New Delhi: The Supreme Court on Monday issued notice to Anil Ambani on a plea by Ericsson India Pvt. Ltd seeking initiation of contempt proceedings against the chairman of Reliance Communication Ltd (RCom) for allegedly not complying with its order to clear dues of 550 crore towards the completion of the asset sale with Reliance Jio Infocomm Ltd.

Ericsson had also sought that the Ambani be “detained in civil prison" unless the payment is made.

A bench headed by Justice R.F. Nariman also allowed RCom to deposit 118 crore towards its dues with the Supreme Court registry. RCom had offered to pay the amount by way of two demand drafts.

The court also highlighted the need for RCom and Reliance Jio to sit together and resolve the issue over past dues. “Sit down and resolve this between yourselves, it is not for us. Till you don’t resolve between yourself, we can’t do anything," Justice Nariman said.

The court also questioned Reliance Jio if it was willing to provide an undertaking to abide by the spectrum trade guidelines. Reliance Jio expressed difficulty in doing so. Senior lawyer Harish Salve, appearing for Reliance Jio said, “Knowing the problems with prior dues and when giving physical guarantee, we can’t take the risk."

The court was responding to a contempt petition by RCom against the department of telecommunications (DoT) claiming that it failed to furnish a no-objection certificate clearing RCom’s spectrum deal with Reliance Jio even after the court had directed it to do so.

This means that the proposed asset sale, announced in December 2017 and initially expected to be cleared by March 2018, will be delayed, affecting repayment to the lenders of RCom.

The Supreme Court had on 30 November cleared the sale of spectrum by the Anil Ambani-controlled RCom to elder brother Mukesh Ambani’s Reliance Jio on condition that the seller furnishes 1,400 crore as corporate guarantee to the government within two days. This corporate guarantee, to be furnished by Reliance Realty, a unit of RCom, was in addition to the land parcel that had to be provided as security. The Supreme Court had also asked the central government to grant a no-objection certificate within a week of receiving the corporate guarantee.

But the DoT, on its part, refused to furnish the no-objection certificate after Reliance Jio did not agree to assume payment liabilities of RCom to complete the spectrum trading deal between the two companies. Under the government’s spectrum trading guidelines, the DoT has the right to recover these dues.

The apex court had on 23 October last year asked RCom to clear the dues by 15 December, holding that interest of 12 per cent per annum would be attracted for delayed payment.

Senior executives of RCom and Reliance Jio had last month met telecom secretary Aruna Sundararajan to resolve issues flagged by the DoT around payment related to the spectrum deal between the two companies.

Reliance Jio has also extended the term of the definitive agreement for the acquisition of specified assets of RCom and its affiliates to 28 June 2019, Reliance Jio’s parent Reliance Industries Ltd said in an exchange filing on 31 December.

The RCom-Reliance Jio deal is crucial for the Anil Ambani firm as the beleaguered telecom operator, which had been struggling with a mountain of debt and a failed merger with Aircel, finally decided to wind up its wireless business in December 2017 and announced a deal with Reliance Jio in which RCom’s assets, including 122.4MHz of 4G spectrum in the 800/900/1,800/2,100 MHz bands, more than 43,000 cell towers, 178,000 route km of fibre with a pan-India footprint and 248 media convergence nodes covering 5 million sq. ft used for hosting telecom infrastructure, would be bought by Reliance Jio.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.

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