The Supreme Court on Wednesday reserved judgement on Ericsson’s contempt petitions against Reliance Communications and its chairman Anil Ambani, over the telecom operator’s failure to comply with its assurance in court to clear Rs 550 crore of arrears to the Swedish equipment supplier.
The daylong arguments saw Ericsson accusing RCom of avoiding the payment, despite having funds and its chairman living “like an emperor”, and Ambani claiming that there was no “no wilful defiance” on his part and also that he wasn’t personally liable to pay the dues. Arguing on behalf of Ambani, who was present in the court for the second day, senior lawyer Mukul Rohatgi pointed out that the matter was now in the bankruptcy court. “I am now nobody. It is all over. It is not in my hands now,” he said.
Ericsson, represented by senior advocates Dushyant Dave and Anil Kher, said RCom had earlier offered to settle the dues only to prevent insolvency. It urged the court to take tough action against RCom and its directors, and also consider the entire Reliance Group of Anil Ambani as one company. It claimed that RCom had received Rs 780 crore by selling some assets and paid the government for spectrum, but not the equipment supplier.
Ambani tried to pay the money but could not generate funds, Rohatgi said, while arguing that there was no such thing as affixing responsibility on the entire group or one person. RCom is a listed company with thousands of investors and the liability is on the directors and not on Ambani personally, he said.
RCom, which was represented also by senior lawyer Kapil Sibal, urged the court to let the proceedings under the bankruptcy law to go on and allow Ericsson to argue its claims there. As an operational creditor, Ericsson will be low in order of priority of creditors seeking dues there. Sibal and Rohatgi were assisted by lawyer Mahesh Agarwal.
“Judgement reserved,” a two-judge bench, comprising Justices RF Nariman and Vineet Saran, said after arguments concluded.
The court was hearing three contempt petitions filed by Ericsson against directors of three Reliance Group companies and also the State Bank of India chairman over RCom’s failure to pay up despite undertakings to the court. SBI is the lead lender to RCom, which is facing claims of Rs 46,000 crore.
Arguing for SBI, senior advocate Neeraj Kishan Kaul objected to the lenders’ forum being dragged into the contempt case. “I have not violated the court orders,” he said.
Rohatgi dubbed RCom’s effort to pay Ericsson as an experiment which failed. “We were expected to get Rs 18,000 crore from (Reliance) Jio from the sale of assets. It did not go through,” he said.
“No one likes to lose his company. Unfortunately, RCom has fallen on bad days. I tried to save it but couldn’t,” he said. “Now it’s up to the IRP (interim resolution professional). I am like any other person who has lost his company,” Rohtagi said, even as Ambani stood and watched.
A man who has money and cannot pay can be made liable, but not someone who tried but couldn’t generate the funds, he said. “I did not intend to deceive. It was just an impossible task,” he said, referring to Ambani’s attempts to avoid RCom going to insolvency.
Source: Economic Times