The National Company Law Appellate Tribunal (NCLAT) on Wednesday reserved its verdict on a plea moved by Reliance Communications (RCom) to release tax refunds worth nearly Rs 260 crore, held in a trust and retention account with the lenders of the company. Nearly 40 lenders of the company, including the State Bank of India (SBI) have opposed RCom’s plan to use this money to pay off Ericsson contending that the funds for paying the latter must come from a different source. The banks are trustees of the account.
On Wednesday, SBI reiterated that it held the first right over the tax refunds which had come into the account. The joint lenders's forum led by SBI had on Tuesday also said that they should not be blamed for failing to recover Rs 37,000 crore from the sale of assets of RCom.
“It failed because Jio declined to pay RCom’s past debts,” Senior Advocate Neeraj Kishan Kaul appearing to SBI had said, adding it was up to RCom to make provisions to pay Ericsson, whether the deal happened or not.
The hearing in NCLAT on Wednesday saw heated arguments between the senior counsels for RCom and SBI. RCom alleged that SBI had approached the SC with a plea that the hearings be transferred from NCLAT since the appellate tribunal was misinterpreting the directions given by the top court in the matter. The bank, Senior Advocate Kapil Sibal appearing for RCom said, went to SC without informing it first. SBI, however, said that it had approached the top court just to protect its rights in case the NCLAT order in the plea moved by RCom went against it.
RCom wanted to use the tax refunds of nearly Rs 260 crore, parked in the retention and trust account, to pay off Ericsson India as a part of the total payment of Rs 550 crore that it has to make to the latter. The payment by RCom to Ericsson has to be made as part of the Supreme Court’s (SC’s) orders in which it had held Ambani guilty of contempt of court.
On February 20, the apex court had held Ambani and two others guilty of contempt of court for wilfully violating its order by not paying Rs 550-crore dues to Ericsson. RCom has time till March 19 to pay off Ericsson to purge the contempt and avoid a jail term for Ambani and two of his top executives.