Companies

RCom-Ericsson case: NCLAT declines to direct SBI to release ₹259 crore

PTI New Delhi | Updated on March 15, 2019 Published on March 15, 2019

Just days ahead of the expiry of the Supreme Court deadline to Anil Ambani to clear RCom’s dues to Ericsson, the NCLAT on Friday refused to direct State Bank of India to release ₹ 259 crore in income-tax refunds to make such a payment, saying it does not have the jurisdiction to do so.

The apex court has asked the RCom group to pay ₹ 453 crore in four weeks, by March 19, failing which Ambani will have to go to jail.

“... in an appeal filed under Section 61 of the ‘I&B Code’ (the Insolvency and Bankruptcy Code), no direction can be given to any party to the settlement (particularly the third party) to perform certain duties to ensure settlement between other parties,” the NCLAT bench of Chairman Justice SJ Mukhopadhyaya and member (Judicial) Justice Bansi Lal Bhat said.

It said that since the case in this regard is also before the apex court, the NCLAT is “not vacating the interim order dated May 30, 2018, nor passing any direction to refund any amount to anyone or other party, till some order is passed by the Supreme Court”.

Per the interim order, the ‘Financial Creditors’/ ‘Joint Lenders Forum’ with whom the assets of the RCom have been mortgaged, have been allowed to sell the assets of the company and deposit the total amount with the lenders forum. However, if the appeals before NCLAT are rejected, the lenders and creditors, including Ericsson, will have to return the total amount in the account of RCom for further proceedings.

Reliance Communications has filed an appeal before NCLAT to direct SBI to release income-tax refunds of ₹259.22 crore that the company has received in a trust and retentionship account with the public sector bank.

SBI and other lenders to RCom had opposed the move.

RCom lawyer Kapil Sibal, during the hearing of the case, had said that the company will borrow the rest of the amount from banks to make the payment of ₹453 crore to Ericsson.

RCom has already paid ₹118 crore to Ericsson.

Published on March 15, 2019
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