Reliance Communications Granted Extension Till Dec 15 To Pay Rs 550 Crore To Ericsson
The Logical Indian Crew India
October 24th, 2018 / 2:52 PM
Image Credit: Wikipedia
The Supreme Court on October 24 granted some relief to Anil Ambani-owned Reliance Communication. Reliance Communication has been granted a time till December 15 to repay the dues to Ericsson. On October 2, Reliance Communication had sought a 60-day extension to repay the dues of about Rs 550 crore.
Extension to pay dues
The verdict was given by a justice bench led by Justice RF Nariman. Justice Nariman said that this was the last chance for the company, and in case of further delay in payment would attract the interest of 12% per annum.
Advocate Kapil Sibal who was representing Reliance Communication said that the delay in the payment was caused by Department of Telecommunications. He claimed that the department had caused trouble for the company in its attempt to sell spectrum to Reliance Jio.
However, this claim was refuted by senior advocate Dushyant Dave, calling the allegation of the department’s role to be “completely bogey”.
Petition filed by Ericsson
Earlier this month, Ericsson, the Swedish telecom equipment maker had filed a contempt of court petition in the Supreme Court against Reliance Communications chairman, Anil Ambani. The Ambani-owned company, on September 28 asked for a 60-day extension to the previously decided deadline of September 30 to settle dues. Ericsson had petitioned in the apex court to not allow Anil Ambani and two senior executives from his group to leave the country after the alleged default in payments, The Times of India reported.
Delay in payment of dues
Anil Kher, a senior counsel representing Ericsson told the Economic Times, “We filed a contempt of court petition against Anil Ambani, who had given an undertaking in the SC that the settlement amount to Ericsson will be paid by September-end.” In a statement given to stock exchange, Reliance Communication had then called Ericsson’s petition to be unwarranted.
Ericsson had alleged that in 2014, they had signed a seven-year deal to operate and manage RCom’s nationwide telecom network, but were not paid dues to the tune of over Rs 1,000 crore.
Payment as part of business deal
Ericsson was supposed to get the payment as part of a business deal. Reportedly, the Anil Ambani group has already been battling a debt of about Rs 45,000 crore. In May, in dispute settlement at NCLAT, Ericsson had agreed to scale down its dues from Rs 1,600 crore to Rs 550 crore to be paid by September end. It was agreed upon the condition that if the company failed to pay up, it would be pushed back to insolvency proceedings at National Company Law Tribunal (NCLT) and sale of its assets would be reversed.
When Reliance Communication failed to do so, Ericsson decided to approach the top court. Ericsson said, “They have no respect for the nation, and have abused the process of law.”
Reportedly, until now RCom has sold its optic fibre and switching nodes to Jio for Rs 5,000 crore. However, the spectrum deal between RCom and Jio is stuck in a legal tussle, with the Anil Ambani-owned company appealing against the telecom department’s demand for over Rs 2,000 crore as spectrum usage charge before approving the transaction.
Written by : Shraddha Goled
Edited by : Shraddha Goled