The Supreme Court on Wednesday held Reliance Communication Chairman Anil Ambani and two more directors guilty of contempt of court in a petition filed by Ericsson India against him over non-payment of dues worth over Rs 550 crore.
In its judgement, the Supreme Court said that Anil Ambani and the two directors had to pay Rs 453 crore to Ericsson India in four weeks, failing which they could be jailed for at least three months.
The other two directors who have been found guilty include Reliance Telecom Chairman Satish Seth and Reliance Infratel Chairperson Chhaya Virani.
The SC also imposed a fine of Rs 1 crore each on them. If they fail to deposit the fine, one-month jail will be awarded, said the Supreme Court.
The court rejected RCom and Ambani's unconditional apologies saying they had shown a cavalier attitude to the administration of justice.
"Unconditional apology by Reliance can't be accepted given the attitude of the deponent to the highest court of the land. Three Reliance companies had no intention of payment of money, it amounts to contempt," SC said.
On October 23 last year, the court had asked RCom to clear the dues by December 15, adding that delayed payment would attract an interest of 12 per cent per annum. The plea by Ericsson had sought the court to direct Ambani and the lenders forum to hand over the Rs 550 crore with interest from sale proceeds as per the October 23 order.
A bench of Justices RF Nariman and Vineet Saran on February 13 had reserved its judgement after Ericsson India alleged the Reliance Group had money to invest in the Rafale jet deal but was showing reluctance in clearing its dues. The charge was vehemently denied by RCom.
Senior advocate Dushyant Dave, who appeared for Ericsson India argued that there was wilful disobedience on the part of Anil Ambani and co. of Supreme Court's orders and that contempt action should be initiated against them. Mukul Rohatgi, who appeared for RCom counter-argued that no orders of the apex court were violated and hence there was no contempt.
“We respect the judgment of the Hon’ble Supreme Court. The RCom group shall comply with the same,” said RCom in a statement.
Ericsson had sought contempt action by way of remanding them to civil prison and had also urged the court to seize the personal assets of Ambani and recover its dues.
Ambani, who was directed to be present during the two day long hearing on the contempt case, was present in court when the ruling was delivered.
Ambani told the top court that with the failure of its assets sale deal with elder brother Mukesh Ambani-led Reliance Jio his company has entered insolvency proceedings and is not in control of the funds.
Reliance Communications (RCom) had told the court they had tried to move "heaven and earth" to ensure Ericsson gets its due but was unable to do so due to failure of assets sale deal with Jio.
His lawyer Mukul Rohtagi had argued that Ambani could not be held personally liable for the dues of a listed company.
The contempt plea was filed against Ambani, Reliance Telecom chairman Satish Seth, Reliance Infratel chairperson Chhaya Virani and SBI chairman
The insolvency proceedings against the company will now go ahead.