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Anil Ambani Avoids Prison As Reliance Clears Ericsson Dues Before SC Deadline

LIVELAW NEWS NETWORK
18 March 2019 12:35 PM GMT
Anil Ambani Avoids Prison As Reliance Clears Ericsson Dues Before SC Deadline
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With Reliance Communications paying Rs.462 crores to Ericsson before the deadline fixed by the Supreme Court, its Chairman Anil Ambani has avoided imprisonment, reports the Economic Times. As per the ET report, Ericsson's lawyer confirmed receipt of the payment.On February 20, the Supreme Court had held Ambani and three Reliance companies guilty of contempt of court for not complying with...

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With Reliance Communications paying Rs.462 crores to Ericsson before the deadline fixed by the Supreme Court, its Chairman Anil Ambani has avoided imprisonment, reports the Economic Times. As per the ET report, Ericsson's lawyer confirmed receipt of the payment.

On February 20, the Supreme Court had held Ambani and three Reliance companies guilty of contempt of court for not complying with the undertaking to settle the Rs.550 crores dues of Ericsson. The bench of Justices R F Nariman and Vineet Saran had granted an opportunity to Ambani to purge contempt by paying Ericsson the balance amount after deducing the Rs.118 crores already deposited in the Court. The court went on to add that the default will result in Ambani facing three months imprisonment.

The time set by SC would have expired on March 19, and with the dues being cleared, Ambani can heave a sigh of relief.

The Swedish gear-maker had initiated insolvency process against RCom as an operational creditor. On May 30, 2018, the NCLAT directed Reliance to pay Rs. 550 crores to Ericsson on the basis of settlement between both the companies.

This was defaulted and the matter reached the Supreme Court, where RCom undertook to pay the amount.

But the undertaking was not honoured, making Ericsson file a contempt petition, alleging that Reliance group  "wilfully and consciously" defied the order dated August 3 of the top court and the undertaking given before it to pay up by September-end. The apex court had on October 23 had given one last opportunity to RCom for clearing the settlement amount, by setting December 15 as the deadline. When this deadline was also missed, the SC issued contempt notice to Ambani on January 6. The bench was not prepared to accept the offer of part-settlement made by RCom for Rs. 118 crores.

Last week, Reliance had approached the National Company Law Appellate Tribunal seeking a direction to State Bank of India to release the amount of Rs.260 crores of income tax refund held by it in trust on behalf of all creditors of Reliance Communications(RCom) to enable the telecom company to pay Rs.450 crores to Ericsson India Private Ltd.

In the judgment pronounced on Friday, the NCLAT noted that that the payment of dues of Rs. 550 Crores to Ericsson by three Reliance Companies is not linked with the assets of the SBI or any other Bank, who are third parties to the settlement between the three Reliance companies and Ericsson. 

Taking note of these circumstances, the NCLAT bench headed by former SC judge Justice S J Mukhopadhyaya said that SBI cannot be directed to release the amount to enable Reliance to settle its account with Ericcson. "...no direction can be given to any party to the settlement (particularly the third party) to perform certain duties to ensure settlement between other parties", observed the bench.



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