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NCLAT reserves order in RCom-Ericsson payment case

Press Trust of India  |  New Delhi 

Law Appellate Wednesday reserved its order on a petition by which has approached the seeking the release of income tax refunds to clear dues of

Lenders of RCom have opposed the plea, saying that it will lead to outgo of public money for settling payment of a private party.

After hearing both the sides, the NCLAT bench headed by S J Mukhopadhaya reserved the order in the case.

The said that both the parties should see the case as a resolution process rather than seeing it as a suit and principle of resolution is to save the company so that creditors get the maximum from assets.

He said that in case liquidation proceedings are invoked against RCom then all the creditors including will have to pay back the amount that they have received from RCom and projected valuation of company's asset of Rs 38,000 crore may fall to Rs 2,000-3,000 crore.

"will get 20-30 per cent from it," Mukhopadhaya said.

The NCLAT bench was hearing the petition of RCom to release Rs 259.22 crore received from income from the Trust and Retention Account (TRA) held with the

All receivables of RCom are deposited in TRA account on which lenders have control.

appearing for appealed for payment to be made to Ericsson from the TRA.

Lenders of RCom led by opposed the application of the company.

appearing for SBI argued for rejection of the RCom's appeal, contending that it will lead to outgo of public money for settling payment of a private party.

He said that RCom asset monetisation deal failed because refused to take responsibility of past dues of the firm before the DoT and hence it is not liable to make payment on behalf of RCom.

RCom has been asked by both the and the NCLAT to pay Rs 550 crore to Ericsson.

The company has paid Rs 118 crore to Ericsson and if it fails to pay the rest of the amount then RCom group may have to face three-month jail term for the contempt of court order.

Sibal said if Rs 259 crore is released from TRA, RCom will look at raising rest of the amount to clear entire payment of Ericsson.

The has given RCom to pay Ericsson by March 19.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 13 2019. 23:00 IST