Finance

Ericsson Seeks Contempt Action Against Anil Ambani Over Rs. 550 Crore Dues

Ericsson India Pvt Ltd on Friday moved the Supreme Court seeking initiation of contempt proceedings for the second time against Chairman of Reliance Communication Ltd (RCom) Anil Dhirubhai Ambani for allegedly not complying with its rules to clear dues of Rs. 550 crore.

Besides seeking contempt proceedings against RCom chairman and two others, Ericsson has also sought that they are “detained in civil prison” unless they purge themselves by creating the payment.

It also sought directions to the Ministry of Home Affairs to avoid Mr. 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 creating 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 undertrials and the diet money for their maintenance is paid to the authorities by the opposite party which is in litigation.

The top court had on October 23 last year asked RCom to clear the dues by December 15 saying that postponed payment would attract the interest of 12 percent per annum.

“It is respectfully being brought to the notice of this court that respondents have not paid a payment of Rs. 550 crore as said and as undertaken by December 15, 2018, or even thereafter. Clearly, the respondents have committed a gross contempt of this court to deserve to be punished for the same,” said the petition filed through advocate Bhargava V Desai.

The plea claimed that Mr. Ambani and two others have “abused the process of law to the hilt and caused grave damage to the interest of justice”.

It stated 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 Mr. Ambani and the lender’s forum to hand over Rs. 550 crores with interest, as confirmed by the October 23 order, from the sale proceeds. The Supreme Court had on October 23 given one last opportunity to RCom for clearing the settlement sum.

It had stated that Ericsson can revive its contempt plea against Reliance if the amount is not paid by December 15, 2018. In its first contempt plea, Ericsson sought action against Mr. Ambani and others for failing to pay Rs. 550 crore towards a settlement to the company by September-end last year.

The company had confirmed that RCom has “willfully 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 confirmed that it had not been paid the dues of over 1,500 crores 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 crores 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, fiber, telecom towers and certain real estate assets for an aggregate value of estimated Rs. 25,000 crore.

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