The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday dismissed Reliance Communications Ltd’s (RCom’s) plea seeking a refund of nearly ₹325 crore from Swedish telecom equipment maker Ericsson India Pvt. Ltd., part of the ₹550 crore that the Reliance Group paid in 2019 to purge a Supreme Court contempt order.
The tribunal held that the payment did not violate insolvency norms, and was made solely to comply with the Supreme Court’s directions and not for any insolvency-linked settlement.
“We do not find any merit in the contention of the applicant that the money paid to Ericsson pursuant to the NCLAT stay order is required to be refunded… The petitions filed by the resolution professional of the corporate debtor against Ericsson India Private Limited (operational creditor) are dismissed and disposed of,” the order stated.
Contempt ruling
The case stems from the 2019 Supreme Court contempt ruling in which the court held RCom, Reliance Telecom Ltd and Reliance Infratel Ltd—and their executives—guilty for failing to honour a settlement with Ericsson and repeatedly missing court-mandated payment deadlines. To purge the contempt ruling and prevent its senior officials from being imprisoned, the Reliance Group ultimately paid ₹550 crore to Ericsson.
Later, resolution professional Anish Niranjan Nanavaty approached the NCLT seeking a partial refund, arguing that paying Ericsson in full amounted to preferential treatment, since the operational creditor recovered its entire claim ahead of secured financial lenders.
However, the NCLT rejected the plea, noting that the funds paid to Ericsson did not come from the assets of the insolvent companies, but from other Reliance group entities. Because the corporate insolvency resolution process (CIRP) estate was never depleted, the tribunal concluded that the payment could not be treated as a preferential transaction or a violation of the moratorium under the Insolvency and Bankruptcy Code (IBC).
RCom had sought only ₹325 crore, not the full ₹550 crore, as that portion was considered attributable to RCom and Reliance Telecom. The remaining amount pertained to Reliance Infratel or other group entities, which were not part of the present petition.
Ericsson argued that the RP’s claim was “misconceived”, emphasising that the payment flowed strictly from the Supreme Court’s contempt order, not the 2018 NCLAT interim order that had contemplated a refund if appeals were dismissed. It said any challenge to the payment should have been taken up before the Supreme Court itself.
The dispute dates back to a 2013 network maintenance agreement under which Ericsson claimed more than ₹1,500 crore in unpaid dues. After repeated defaults, Ericsson initiated insolvency proceedings, eventually leading to contempt action against RCom’s executives. RCom entered bankruptcy in 2019 with debt exceeding ₹46,000 crore.
