Supreme Court holds Anil Ambani, Reliance Communications guilty of contempt

The Supreme Court, on February 20. 2019, held Reliance Communications and its Chairperson Anil Ambani guilty of contempt of court in the petition filed by Ericsson.

The judgment was rendered by a Bench of Justices Rohinton Nariman and Vineet Saran. The Bench held that three Reliance companies had no intention to pay the money it owed Ericsson, and that their conduct amounted to contempt.

The Court further held that the unconditional apology given by Reliance cannot be accepted, in light of its cavalier attitude towards the highest Court of the land.

Reliance Communications, headed by Anil Ambani, has therefore been directed to pay Ericsson Rs. 453 crore within four weeks. This is in addition to the Rs. 118 crore which Reliance had undertaken to deposit with the Court Registry.

In case of failure to pay, Chairperson Anil Ambani, who gave the undertaking to pay, will have to undergo three months’ imprisonment, the Bench stated.

Additionally, a fine of Rs 1 crore was imposed on each of the companies, who have to deposit the same with the Supreme Court Registry. In case of failure to deposit the fine of Rs. 1 crore, each of the three Directors of the companies will have to undergo one month imprisonment.

The contempt petition was filed by Ericsson, contending that Reliance had committed gross contempt by disobeying orders of the Supreme Court, which had directed it to pay Rs. 550 crores to Ericsson towards settlement of dues.

On August 3, the Supreme Court had ordered that the payment of Rs. 550 crore be made on or before September 30.

Subsequently, Reliance sought an extension of time for making the payment, which was allowed by the Supreme Court. On October 23, the Court said that as a “last opportunity”, it will allow Reliance to make the payment along with interest before December 15, 2018.

Before the expiry of the said date, Reliance once again filed an application for extension of the deadline, but the same was withdrawn on December 14 after it realized that the Court was not inclined to entertain the application.

Ericsson thereafter sought the initiation of contempt proceedings against Reliance Communications and Anil Ambani for violation of the Supreme Court orders of August 3 and October 23.

In the petition filed through advocate Bhargava V Desai, Ericsson had prayed that Anil Ambani, Chairperson of Reliance Communications, be detained in civil prison till the dues along with interest are cleared.

During the course of the hearing, Senior Counsel Dushyant Dave, arguing for Ericsson, had submitted that Ambani had money to invest in Rafale Jets, but continued to fail to pay  dues to Ericsson.

Senior Counsel Mukul Rohatgi represented Anil Ambani. Two Directors of the Reliance Group – Satish Seth and Chhaya Virani – were represented by Senior Counsel Kapil Sibal. Senior Counsel  Neeraj Kishan Kaul appeared for the Chairperson of State Bank of India.