20/02/2019 10:57 AM IST | Updated 20/02/2019 12:54 PM IST

Anil Ambani Held Guilty Of Contempt In Ericsson Case, Must Pay Dues In 4 Weeks Or Face Jail

The court said Anil Ambani and the directors would go to jail for three months if they did not pay Rs. 453 crore to Ericsson within four weeks.

Danish Siddiqui / Reuters

Reliance Group chairman Anil Ambani and two directors were held guilty of contempt by the Supreme Court on Wednesday, on a plea filed by Ericsson India over not clearing its dues of Rs 550 crore.

The court said Ambani and directors Satish Seth and Chhaya Virani would go to jail for 3 months if they did not pay Rs. 453 crore to Ericsson within four weeks, ANI reported.

Ambani, Seth and Virani were present in the courtroom when the verdict was pronounced, PTI reported. 

A bench of Justices RF Nariman and Vineet Saran had on 13 February reserved its judgement when Ericsson India had alleged that the Reliance Group has money to invest in the Rafale jet deal but they were unable to clear its Rs 550-crore dues, a charge which was vehemently denied by the Anil Ambani-led company.

On Wednesday, the bench said if the ‘contemnors’ failed to make the payments within the specified period, they will undergo a jail term of three months.

The apex court also directed Reliance Communication, Reliance Telecommunication and Reliance Infratel to deposit Rs 1 crore each in four weeks to the apex court registry. If not, the chairpersons of these companies will have to undergo additional jail term of one month.

It directed that Rs 118 crore already deposited by Reliance Group in the apex court registry be disbursed to Ericsson within a week.

“From undertakings given by Reliance Group’s top brass, it appears they have wilfully not paid the amount to Ericsson despite orders and undertakings given,” it said.

The apex court specified that any unconditional apology given by Reliance needs to be rejected as they have breached the undertaking and order.

The bench said the three Reliance companies did not adhere to the 120 days deadline and 60 days extra given by the apex court to pay the Rs 550 crore to Ericsson.

It said the undertakings given in the court were false to the knowledge of the court and affected the administration of justice.

After the verdict, senior advocate Mukul Rohatgi, who appeared for Ambani, said he respects the decision of the apex court and expressed confidence that the group will honour the directions on payment of dues to Ericsson.

“We respect the Supreme Court’s order. We have faced our difficulties. However, the court ruled the way it has ruled,” Rohatgi told PTI.

“I am sure Rcom will honour the Supreme Court’s order,” Rohatgi added.

Ambani had on 13 February told the top court that with the failure of its assets sale deal with elder brother Mukesh Ambani-led Reliance Jio his company had entered insolvency proceedings and was not in control of the funds.

Reliance Communications (RCom) had told the court they had tried to move “heaven and earth” to ensure Ericsson gets its due but was unable to do so due to failure of assets sale deal with Jio.

The contempt plea had been filed against Ambani, Reliance Telecom chairman Satish Seth, Reliance Infratel chairperson Chhaya Virani and SBI chairman.

The court on 23 October 2018 had asked RCom to clear the dues by 15 December 2018, saying delayed payment would attract an interest of 12 per cent per annum. 

The plea by Ericsson had sought that the court direct Ambani and the lenders forum to hand over the Rs 550 crore with interest from sale proceeds as per the October 23 order.

(With PTI inputs)