In an important step back to Anil Ambani, the National Companatory Appellate Tribunal (NCLAT) on Friday refused to authorize the state bank of India to release the amount of Rs.260 crores in income tax refund in confidence on behalf of everyone. creditors of Reliance Communications (RCom) to enable the telecom company to pay Rs.450 crores to Ericsson India Private Ltd according to the instructions of the Supreme Court.
On February 20, the Supreme Court found Rcom President Anil Ambani and three Reliance companies guilty of contempt for the judge for not complying with the commitment to settle Rs.550 assets from Ericsson. The bank of Justices R F Nariman and Vineet Saran Ambani had offered the opportunity to dispel contempt by paying Rs.453 crores (Rs.118 crores was previously deposited in SC) to Ericcson within four weeks, failing which he will receive three months in prison.
"The RCom group aims to clear the contempt of this Court by paying the sum of INR 453 crore to Ericsson within four weeks from today. In the absence of such payment, the presidents will have those commitments to this Court done three months in prison, "the SC had ordered.
In this context, the application was moved before NCLAT requested the release of Rs.260 Crores' income taxes.
The NCLAT on 30 May 2018 had suspended the insolvency proceedings against RCom at the instance of Ericson, an operational creditor. The stay was granted on the basis of the comments from the financial creditors that they will not benefit from the insolvency process; instead, they sought permission to sell the mortgaged assets of Reliance companies. A Joint Lenders Forum was formed consisting of all financial creditors, with SBI as the leading bank. Reliance agreed that it would settle Ericsson's bills by paying Rs.550 crores within 120 days.
Accordingly, the NCLAT on May 30, 2018, stayed in the insolvency process, allowed the lenders to sell the pledged assets and put the proceeds in a blocked account at SBI, and drove Reliance to transfer Rs.550 crores to Ericson within 120 days Pay .
The payment to Ericsson had failed and the case went to the Supreme Court, which ultimately resulted in the contempt order of February 20.
Senior lawyer Kapil Sibal, who had also appeared in SC for Reliance, submitted to NCLAT that in order to comply with the guidelines of the SC, payment can only be made from the bank accounts of Reliance, the business debtor. The point of view of the lenders for not releasing the amount is contrary to the decision of the SC, filed Sibal.
The Joint Lenders Forum opposed the request for release of Rs.260 crores on the Trust and Retention Account (TRA) of SBI to settle the contribution from Ericsson. They stressed the need to resume the insolvency process because the attempts to liquidate the secured assets did not materialize.
After hearing the case for three days, the Tribunal had ordered orders on Thursday.
In the verdict pronounced on Friday, it is noted that that is the payment of contribution from Rs. 550 Crores for Ericsson by three Reliance Companies is not linked to the assets of the SBI or another Bank, which are third parties to the settlement between the three Reliance and Ericsson. In the order of May 30, the Tribunal had registered two sets of settlements: one between Reliance and Ericsson and another between Reliance and lenders.
The NCLAT bank led by former SC judge Justice S J Mukhopadhyaya has taken note of these circumstances and said that SBI cannot be ordered to release the amount to allow Reliance to settle its account with Ericcson.
"… no party to the settlement (in particular the third party) can perform certain tasks to ensure settlement between other parties", the bank observed.
It also said that the Tribunal did not give orders because the Supreme Court seized the case.
"… as the Supreme Court appeals to this case, we do not leave the preliminary decision of May 30, 2018 and we do not indicate any direction to repay any amount to any party until an order has been approved by the Hon & # 39; ble Supreme Court ".
In fact, Reliance orders from the Supreme Court will have to request release of the refund amount from SBI. However, the SC has closed the holidays for Holi and will not resume its activities until 25 March. As the deadline for fulfilling the rights of Ericsson is March 19, it remains to be seen whether Reliance is rushing to SC's holiday college to intervene urgently.
Read the order