No respite for RCom: Supreme court denies more time to clear Rs 550cr dues to Ericsson

No respite for RCom: Supreme court denies more time to clear Rs 550cr dues to Ericsson

The Supreme Court on Thursday refused to give more time to Reliance Communications (RCom) to clear dues of Rs 550 crore it owes to Swedish telecom equipment manufacturer Ericsson India.

A bench led by Justice Rohinton Nariman allowed RCom to withdraw its plea after it refused to entertain its senior counsel Kapil Sibal’s request for further extension of time.

Sibal told the apex court that RCom has failed to pay only because the spectrum sale to Reliance Jio Infocomm hasn’t gone through. However, senior counsel Dushyant Dave, appearing for Ericsson, opposed the RCom’s stand, reiterating that the commitment to pay Rs 550 crore was not conditional upon RCom selling it assets.

The apex court had on October 23 given Rcom time till December 15 to clear the pending dues of Rs 550 crore to Ericsson India. RCom through its chairman Anil Ambani had earlier undertaken to clear the dues of its operational creditor by September 30.

“You (RCom) ask for a reasonable period, we will give you and after that, it’s over,” Justice Nariman had said, adding that the delayed payment will attract an interest of 12% per annum and will be paid from the due date of September 30.

It had also told Ericsson that contempt proceedings can be revived against RCom if payments were not made by December 15.

Ericsson India had earlier sought to initiate contempt against RCom promoter Anil Ambani and others for failure to comply with the apex court’s August order.

RCom and Ericsson had on May 30 settled the debt of Rs 1,150 crore for Rs 550 crore which was to be paid within 120 days ie by September 30. “This bogey of DoT’s nod is being raised to avoid paying money. They have already sold assets worth thousands of crore,” Dave had told the Bench.

The NCLT had on May 15 admitted the insolvency petition file by Ericsson in lieu of recovering pending dues of Rs 1,150 crore. However, RCom amicably settled the dispute with the Swedish company by offering `550 crore before the tribunal in May.

Ericsson had signed a seven-year deal long back in 2014 to operate and manage RCom’s nationwide telecom network. After RCom failed to pay for its supplies procured from Ericsson, the later initiated insolvency proceedings against it before NCLT to recover Rs 1,150 crore. However, the bench will hear RCom and its subsidiary Reliance Telecom’s plea to initiate appropriate contempt proceedings against DoT for “willfully and deliberately disobeying” its November 30 order that directed DoT to grant No Objection Certificate (NoC) to the firms by December 7 to trade its spectrum with Reliance Jio Infocomm.