The National Company Law Appellate Tribunal (NCLAT) on Monday reiterated that Ericsson may have to refund Rs 578 crore that the Swedish telecom equipment maker has recovered as dues from Reliance Communications (RCom) in case insolvency proceedings are triggered against the debt-ridden firm. Hearing the RCom-Ericsson matter, the bench headed by its chairman Justice SJ Mukhopadhaya said, “Why should one party take the amount and other creditors suffer and why should banks suffer? Why should the Indian economy suffer?”
On May 16, 2018, the National Company Law Tribunal’s Mumbai bench had admitted Ericsson’s insolvency plea against RCom and two of its arms seeking to recover unpaid dues. However, on May 30, NCLAT granted a conditional stay on insolvency proceedings against these firms.
The NCLAT also said that it would decide on the merits of RCom’s plea to allow an insolvency case against the company. “We may either quash RCom bankruptcy proceedings in the NCLT or allow bankruptcy case to proceed,” it said. The bench has listed the matter for a further hearing on April 30. The Supreme Court had, on February 20, held RcoM chairman Anil Ambani and two others guilty of contempt for violating its order by not paying dues of Rs 550 crore to Ericsson. The apex court had said they would face a three-year jail term if the company failed to pay up within four weeks.
Around the same line of its May 30, 2018 order, the NCLAT had, in an interim order on March 13, 2019, said even if RCom pays the settlement amount to Ericsson, but the insolvency proceedings are triggered against the company, Ercisson will have to refund. The appellate tribunal also said it would consider the reply filed by the Department of Telecom (DoT) over the RCom’s plea against the showcause notice issued by it over spectrum charges due on April 30, the next date of hearing. “DOT’s reply would be considered on April 30. Let us be very clear which are the assets of corporate debtor, whether they have some right of asset. Can you take away licence? If yes, what is the value of the company (Rcom) then,” the NCLAT said.