The Supreme Court on Wednesday held Reliance Communication (RCom) chairman Anil Ambani and two others guilty of contempt of court for violating its order by not paying dues of Rs 550 crore to Ericsson, and said they faced a three-month jail term if Rs 453 crore was not paid to the telecom equipment maker in four weeks.
The Supreme Court held that the RCom chairman, as well as Reliance Telecom chairman Satish Seth and Reliance Infratel chairperson Chhaya Virani, breached the undertaking given to the apex court and related orders.
The apex court said Ambani and the others will have to purge contempt by paying Rs 453 crore to Ericsson in four weeks. A bench comprising Justices R F Nariman and Vineet Saran said if the 'contemnors' failed to make the payments within the specified period, they will undergo a jail term of three months. Ambani, Seth and Virani were present in the courtroom when the verdict was pronounced.
CNBC-TV18 caught up with Mohit Saraf, senior partner at Luthra & Luthra and HP Ranina, corporate lawyer to discuss the verdict.
Saraf said, "After the Supreme Court order, there are not too many options for Anil Ambani Group as they have to probably pay money. Contempt is for wilful disobedience and we all know that the company has got into insolvency. A few years back, the Supreme Court had said very clearly that if there is a contempt proceeding and if there is a serious difficulty, then the contempt proceedings are not maintainable. So, I think there is a little bit of a complication, but probably the court felt that wilful disobedience is a big issue."
Ranina said, "It is a very difficult situation. Anil Ambani is in hot water and there is no question about it. The important point is that RCom has also been held in contempt and they have been directed to pay this amount of money. So, RCom has to bring in the money and there is no other solution as Anil Ambani cannot settle out of court. Therefore, the company has to be funded and the only way it can be funded is by Anil Ambani bringing in money from his own pocket."