(Reuters)
(Reuters)

Supreme Court reserves verdict in Ericsson’s contempt plea against RCom

  • Ericsson had filed the contempt plea against Anil Ambani, two others for non-clearance of dues worth 550 crore
  • The Supreme Court had on 23 October 2018 asked RCom to clear dues by 15 December 2018

The Supreme Court on Wednesday reserved its verdict on Ericsson’s contempt plea against Reliance Communications Ltd (RCom) and its chairman Anil Ambani for “wilful disobedience" of the court’s earlier orders to pay dues of 550 crore to the Swedish telecom equipment maker.

A bench comprising Justices R.F. Nariman and Vineet Sarain reserved its verdict after hearing arguments from parties for more than five hours. Ericsson has moved three contempt petitions against RCom.

Ambani could not be made personally liable for the dues as RCom is a public listed company with lakhs of shareholders and an individual director or the entire group could not be held liable for liability of the company, Mukul Rohtagi, appearing for RCom, told thecourt. RCom did not make any unconditional undertaking, he said. The offer was conditional on sale to Reliance Jio, which did not come through from the department of telecommunications (DoT), he said. Rohtagi also denied allegations of RCom having received 5,000 crore from Jio and told the court that only 780 crore has been received under the failed deal, an amount that was used by lender banks.

Ericsson, however, said the company was making huge profit but was not paying its dues. “He has money to invest in Rafale but does not want to honour the commitment given to the court," Dushyant Dave said, appearing for Ericsson.

Ericsson had asked the court to direct Ambani to submit 550 crore along with interest of 12% per annum and urged that till then, his investment in firms, including Reliance Capital Ltd, Reliance Inceptum Pvt Ltd, and Reliance Innoventures Pvt Ltd, be frozen.

The court orders mentioned by Ericsson include those of 3 March 2018, 23 October 2018, and 7 January 2019.

Ericsson also sought contempt proceedings against Reliance Infratel Ltd, its chairperson Chhaya Virani, Reliance Telecom Ltd, its chairman Satish Seth, and State Bank of India. It also sought that Ambani be “detained in civil prison" until the payment is made.

In January, the apex court highlighted the need for RCom and Reliance Jio to sit together and resolve the issue of past dues and asked Reliance Jio if it was willing to provide an undertaking to abide by the spectrum trade guidelines. Reliance Jio had expressed difficulty in doing so.

The Supreme Court had on 30 November cleared spectrum sale by 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.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in 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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