SC tells Anil Ambani to pay Ericsson Rs453 cr in 4 weeks or face jail
20 February 2019
The Supreme Court has held industrialist Anil Ambani guilty of contempt for failing to pay up Rs453 crore dues to its contractor Ericsson as directed by the court, but said he would get exemption from imprisonment if he pays up the amount in four weeks.
The court pulled up Reliance Communications chairman for what it called a "cavalier attitude" and fined him and two of his directors Rs1 crore each.
"Anil Ambani and others breached their undertaking," the court said, calling it "willful disobedience" of its order that they should repay Swedish telecom equipment maker Ericsson. In a statement, a Reliance Communication Limited spokesperson said: "We respect the Supreme Court judgement. The RCom Group shall comply with the same."
Accordingly, the Supreme Court ruled that the Rs180 crore already deposited by Reliance Group in the court registry be given to Ericsson. It also said any unconditional apology given by Reliance will be rejected as the company had "breached the undertaking and order".
Ericsson India signed a seven-year deal with RCom in 2014 to manage and operate its network. Last year, it went to the Supreme Court against Anil Ambani's company over unpaid dues of Rs550 crore.
Ericsson had argued before the court that while the Reliance Group had the money to invest in the Rafale jet deal, it had failed to clear its dues, a charge which was vehemently denied by the Anil Ambani-led company.
Anil Ambani's Reliance Defence is one of the offset partners of Dassault, the maker of the Rafale jets for which India and France signed a deal in 2016.
Anil Ambani had told the top court that with the failure of an assets sale deal with older brother Mukesh Ambani's Reliance Jio, his company had entered insolvency proceedings and was not in control of the funds. The assets sale was stalled after the government refused to provide immunity to Mukesh Ambani's firm from any past-payment liabilities.
RCom had also told the court that it had tried to move "heaven and earth" to ensure Ericsson gets its dues but was unable to do so because of the failed assets sale.
Ericsson filed the contempt petition against Anil Ambani, Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani.
On October 23, the court had asked RCom to clear its dues by December 15, warning that delayed payment would mean an interest of 12 per cent a year.
Ericsson had sought a court direction to Anil Ambani and the lenders forum to follow its order and hand over Rs550 crore with interest from the asset sale proceeds.