Punishing RCom and its chairman Anil Ambani for showing "cavalier" attitude in submitting an undertaking to the highest court and then dishonouring it.
The Supreme Court (SC) on Wednesday held industrialist Anil Ambani guilty of contempt and ordered him to be sent to jail for three months if he fails to pay Rs 453 crore to the Swedish firm Ericsson within four weeks.
The order was made applicable to two other directors of the Anil Dhirubhai Ambani Group (ADAG) – Satish Seth and Chaya Virani – who were named in the contempt petition filed by Ericsson India which had dues to the tune of Rs 550 crore pending from Reliance Communications (RCom). Earlier, RCom had deposited Rs 118 crore with the SC. The Court directed this amount to be given to Ericsson within a week.
Punishing RCom and its chairman Anil Ambani for showing "cavalier" attitude in submitting an undertaking to the highest court and then dishonouring it.
The SC bench of Justices RF Nariman and Vineet Saran rejected Ambani's unconditional apology. The bench imposed a fine of Rs one crore each on the three contemnors, which they were asked to deposit in four weeks with the Supreme Court Legal Services Committee. If they default, they will suffer one month prison term, the order said.
Soon after the judgment, a statement issued by the RCom spokesperson said, "We respect the judgment of the SC. The RCom Group shall comply with the same." The undertaking by the three contemnors was given to apex court on August 9, 2018. It clearly said that within 120 days an amount of Rs 550 crore with 12 per cent interest will be paid to Ericsson. In October, when the period lapsed, Court extended the window period by two months, with the deadline set for December 15, 2018.
However, in January, the RCom moved an application that the payment was subject to sale of assets to Reliance Jio. The deal failed to materialise due to which the company defaulted on its undertaking and Court order as well. Spotting this development, the bench said, "We have seen that whereas those undertakings were unconditional, these undertakings are now conditional upon sale of assets of the companies.
Ericsson's lawyers alleged that introduction of this condition showed that the RCom had no intention of abiding by their commitment given to Court. Ambani said that despite their efforts, the deal with Reliance Jio for sale of spectrum could not go through, as a result of which, the company succumbed to corporate insolvency resolution process before the National Company Law Tribunal.
The Court said, "It is clear that the three Reliance Companies had no intention, at the very least, of adhering to the time limit of 120 days or to the extended time limit of 60 days plus... undertakings given on the footing that the amount of Rs 550 crore would be paid only out of the sale of assets was false to the knowledge of the three companies. This itself affects the administration of justice, and is therefore, contempt of court."
Tough Times
- Two other directors of Anil Dhirubhai Ambani Group (ADAG) – Satish Seth and Chaya Virani also named in contempt plea petition filed by Ericsson India
- Reliance Communications (RCom) has not paid dues to the tune of Rs 550 crore
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 "Anil Ambani")
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