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Ericson Case: Anil Ambani held guilty of contempt, directed to pay 453 Crore in 4 weeks

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Anil Ambani has been directed to pay a sum of Rs 453 crore to Ericsson within 4 weeks failing which he will have to face a jail term of 3 months.
Anil Ambani
Anil Ambani held guilty in Ericsson Case, asked to pay the dues in 4 weeks. (PTI)

Anil Ambani, along with two directors of the Reliance Communications has been held guilty of contempt for not paying Rs 550 crore to the Swedish telecom firm, Ericson. Reliance Communications chairman Anil Ambani and others were accused by the complainant of not clearing its dues.

The Supreme Court also imposed a fine of Rs 1 crore on each of three Reliance group companies; Reliance Telecom Ltd, RCom and Reliance Infratel Ltd. In case of failure of the payment, each of the directors of these three firms will have to face one-month imprisonment. A 2-judge bench comprising Justice Rohinton Nariman and Justice Vineet Saran pronounced its verdict stating that RCom had no intention to pay the dues it owed Ericsson. It also struck down the RCom and Ambani’s unconditional apologies.

“Unconditional apology can’t be accepted given the attitude of the deponent to the highest court of the land. Three Reliance companies had no intention to pay the money, and it amounts to contempt” quoted the top court.

The bench had earlier on 13th February 2019 reserved its judgement in the matter where Ericsson India had accused Reliance Group of not clearing its dues of Rs 550 crore despite having money to invest in Rafale deal, a charge which was denied by Ambai-led firm.

To get rid of the contempt, Anil Ambani will have to pay Rs 453 crore to Ericsson India along with Rs 118 crore that the firm had undertaken to deposit with the Court Registry. He has been given 4 weeks to clear the dues, failing which, Ambani will have to face a jail term of 3 months.

Ambani told the Apex Court that they had tried every possible thing to ensure Ericsson gets its dues but failed to do so due to the failure of assets sale deal with Reliance Jio, a company now being run by Anil Ambani’s elder brother Mukesh Ambani. He said that he was no longer in control of the funds.

The top court, on August 3, 2018, had directed Reliance group to pay Rs 550 crore to Ericsson on before September 30, 2018. However, the deponent had sought an extension of time for the same. The Supreme Court, on October 23, 2018, allowed the Reliance group to make the payment along with interest of 12 per cent per annum before December 15, 2018.

Before the final date expires, Reliance filed an extension application once again but withdrew it on December, 14 realizing that the Court was in no mood to entertain the application.

Ericsson had filed the contempt petition against Anil Ambani, Reliance Telecom chairman Satish Seth, Reliance Infratel chairperson Chhaya Virani and SBI chairman stating that Reliance had disobeyed the SC’s order to pay the latter a sum of Rs 550 crores to settle the case. Ericsson then sought contempt proceedings against Reliance Communications and Anil Ambani for not following the Supreme Court orders of August 3 and October 23.

Mukul Rohatgi, former Attorney General of India, represented Anil Ambani before the court. And on the other hand, it was Dushyant Dave who appeared on behalf of Ericsson India. Senior Advocate Kapil Sibal represented Chhaya Virani and Satish Seth. For SBI Chairperson, Niraj Kishan Kaul appeared before the court.

Read Full Judgement Here

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