The Supreme Court held three Reliance companies guilty of contempt of court for reneging on an undertaking to pay £55 million to Swedish telecom company Ericsson, and said failure to pay the balance £45.3 million by March 20 will mean three months’ jail for group chairman Anil Ambani. In the first-ever instance of holding a big industrialist liable for imprisonment for failing to clear dues, a bench of Justices R F Nariman and Vineet Saran said: “We are of the view that contempt of the Supreme Court needs to be purged by payment of the sum of £55 million together with interest till date in four weeks.”
“As stated by Reliance ADAG’s January 21 letter (to Ericsson), subject to any calculation error, an amount of £45.3 million must be paid to Ericsson in addition to deposit of £11.8 million made (by R-ADAG) in the SC registry. The registry is directed to pay over £11.8 million to Ericsson within a period of one week,” the bench said.
While directing Reliance Communications, Reliance Telecom and Reliance Infratel to pay £45.3 million, it said, “In default of such payment, the chairman (Anil Ambani) who has given undertakings to the SC will suffer three months’ imprisonment.” The Supreme Court also castigated Anil Ambani for showing a “cavalier attitude to the highest court of the land”.
Writing the judgment for the bench, Justice Nariman fined the three companies £100,000 each and ordered them to deposit the sum in four weeks with the SC registry, which in turn will hand it over to the SC legal services committee. Failure to pay the fine amount would result in month-long imprisonment for chairpersons of RCom (Ambani), RTL (Satish Seth) and RITL (Chhaya Virani).
Ambani's advocate Mukul Rohatgi said that the company would honour the judgment. Under a January 25, 2013 agreement, Ericsson was to provide operation, maintenance and management of network services to RCom. When the Swedish company received no payment for services rendered by it, it had moved NCLT on May 7, 2017against RCom under the Insolvency and Bankruptcy Code. A year later, the NCLAT had, on May 30, 2018, recorded a statement on behalf of Reliance companies that £55 million would be paid in 120 days to Ericsson as full and final settlement of the £150 million claim.
