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Anil Ambani, RCom guilty of contempt of court, rules SC
Why in news?
- The Supreme Court on Wednesday found Reliance Communications Ltd. (RCom) and its chairman Anil Ambani and two other group firms guilty of contempt of court.
- To pay off dues worth ₹550 crore to Swedish telecommunications equipment major Ericsson.
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What is the issue:
- The dispute stemmed from an agreement between Ericsson and RCom in January 2013.
- In this Ericsson agreed to provide RCom managed services like operation, maintenance, and management of RCom’s network.
- Ericsson had raised invoices from time to time in consideration of the services provided but received no payment from RCom.
- A Bench ordered RCom to “purge” the contempt by paying a balance of ₹453 crore of dues to Ericsson within four weeks.
- If not, Mr. Ambani and chairpersons would have to serve a sentence of three month of imprisonment.
- The court said the three chairpersons had given conditional undertakings on behalf of their respective companies in order to “wriggle” out of the commitment to the court.
Contempt of court:
- The undertakings given on the footing that the amount of ₹550 crore would be paid only out of the sale of assets was false to the knowledge of the three Reliance companies,
- This itself affects the administration of justice, and is, therefore, contempt of court, the Bench held.
Source
The Hindu