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Anil Ambani guilty of contempt, told to pay fine

20 February 2019

The Court, however, has given an opportunity to Reliance companies to purge contempt by paying Rs 453 crore to Ericsson within 4 weeks, failing which Anil Ambani will be sent to prison for three months.

Supreme Court also imposed a penalty of Rs 1 crore on Anil Ambani. In case of failure to deposit the fine of Rs. 1 crore, each of the three Directors of the companies will have to undergo one month imprisonment. Senior advocate Dushyant Dave, appearing for Ericsson India, argued that the court had ordered RCom to pay the amount by September 30 and their failure to pay despite extensions constituted contempt of the top court's order.

Earlier this month, RCom told the court that a deal to sell fibre and tower assets to Reliance Jio failed, prompting RCom to turn to bankruptcy courts for debt resolution and hence was not in a position to pay the dues.

The court, however, dismissed Ericsson's contempt plea against the State Bank of India chairperson, who had headed the joint lenders' forum comprising of 46 financial creditors of the RCom group.

Though the bench had specifically made it clear that personal appearance is not dispensed with, the copy of the order uploaded in the official website of the top court stated personal appearance is dispensed with.

"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, as was given by way of indulgence, by the order dated October 23, 2018", the court said.

In 2014, Ericsson India had signed a seven-year deal to operate and manage RCom's nationwide telecom network.

Ericsson had filed the case against Anil Ambani in 2018 for not clearing its dues of Rs 550 crore.

Rohatgi expressed confidence that the bunch will respect the directions on payment of dues to Ericsson.

On 23 October previous year, the top court had asked RCom to clear the dues by 15 December, 2018, stating that delayed payment would attract interest of 12 percent per annum.

Shares of Reliance Group companies fell sharply after the Supreme Court's verdict. This still leaves a gap of Rs 177 crore - leaving aside the question for the moment on whether RCom will have to pay Rs 550 crore plus interest.

Anil Ambani guilty of contempt, told to pay fine