Supreme Court reserves its verdict

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Supreme Court reserves its verdict The Supreme Court today reserved its verdict in the contempt petition filed by Ericsson against Anil Ambani and Reliance Communications for alleged violation of the orders passed by the Court.

The matter was heard by a Bench of Justices Rohinton Nariman and Vineet Saran. Senior Advocate Mukul Rohatgi appeared for Anil Ambani, while Senior Advocate Kapil Sibal appeared for the Directors of Reliance companies.

Senior Advocate Dushyant Dave appeared for Ericsson.

Dave contended that the failure of Reliance to pay the Rs. 550 crore as promised in its undertaking to the Court was deliberate and willful contempt of court.

“It is like a tenant who agrees to vacate a house but later says he cannot because he could not find alternative accommodation.”

He said that the money, which was realised from the sale of assets of Reliance to Jio, was given to the Department of Telecom (DoT) instead of Ericsson. He also alleged that the contemnors have made profits due to the rise in share prices after the deal with Jio.

Dave also pointed out other projects that have been handed over to other Reliance companies controlled by Anil Ambani.

“They have money for Rafale. Somebody who is getting involved in every conceivable project has no money to pay Rs. 550 crore to us and honour this Court’s order.”

Dave said that Reliance has an obligation towards the Supreme Court in light of the undertaking given to the Court and the various orders passed pursuant to it.

Dave also attacked Ambani saying that,

“They fly in private jets and have huge houses but no money. it is unfortunate that extraordinary citizens can take the court for a ride like this. They are not ordinary citizens. They are getting advice from the best lawyers in the country. This is no ordinary contempt like that committed by a tenant or a farmer.”

Mukul Rohatgi, appearing for Anil Ambani, placed heavy reliance on the submission that the undertaking given by Reliance was not an unconditional one. It was his submission that the undertaking given in Supreme Court was pursuant to an extraordinary order for the benefit of all, as otherwise, the matter would have continued under the Insolvency and Bankruptcy Code (IBC).

“For the benefit of all concerned, an extraordinary order was passed. The IBC proceedings were halted.

If your Lordships look at the last line of the undertaking, it says that in case the payment is not made to Ericsson the appeal will be dismissed. As per the undertaking, there will be sale of assets of Reliance Communication to Jio and the proceeds will be given to the Banks and Ericsson.”

Rohatgi said that in case the payment was not made within the stipulated time, the consequence was that the appeal in the  Supreme Court would fail.

“If it does not fructify, the appeal will fail. That is all. There was no blanket undertaking to pay Ericsson. The undertaking was conditional. To say that it was unconditional is a travesty of justice”, he said.

Regarding the allegation that the Rs. 780 crore obtained from the sale to Jio was given to DoT instead of Ericsson, Rohatgi said that it was given by the lenders to the DoT in order to avoid cancellation of license, and that Reliance Communications did not take that decision.

Further, he said that the sale was to bring in Rs. 18,100 crores, but only Rs. 780 crores was realised. Moreover, another deal with Jio fell through, he submitted.

Senior Advocate Kapil Sibal, appearing for Reliance Communications, also made similar submissions stating that the process pursuant to the Supreme Court order was an experiment which did not fructify.

Dushyant Dave in his rejoinder submissions rebutted Rohatgi’s and Sibal’s arguments. He referred to subsequent orders passed by Supreme Court in which the Court repeatedly ordered Reliance to pay Rs. 550 crore to Ericsson.

“This was no experiment as Rohatgi and Sibal have said. Rohatgi says it was an attempt to settle. But later orders of this Court extending the deadline to pay make it clear that it was not an experiment. The petitioners have taken advantage of time. Now they cannot say it was an experiment.”

Senior Advocate Neeraj Kishan Kaul, appearing for the Chairman of State Bank of India, also opposed the contempt plea.

After a day-long hearing, the Court reserved its judgment.

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