RELIANCE COMMUNICATION LIMITED & ORS. versus STATE BANK OF INDIA & ORS.

RELIANCE COMMUNICATION LIMITED & ORS. versus STATE BANK OF INDIA & ORS.

The three Reliance Companies wilfully defaulted on their unconditional undertakings to pay INR 550 crore to Ericsson within the prescribed time limit, substituted them with conditional undertakings linked to asset sale, and failed to pay, thus committing contempt of court; the contempt needs to be purged by payment as ordered, failing which imprisonment will follow.

Parties
Petitioner: Reliance Communication Limited & Ors.; Respondent: State Bank of India & Ors.
Jurisdiction
India
Judgment Date
20 February 2019
Procedural Posture
Writ Petition (civil) With Contempt Petitions / Judgment
Outcome
Contempt petitions disposed of; Reliance Companies held guilty of contempt.
Legal Topics
Corporate Insolvency Resolution Process, Undertakings to Court, Contempt Proceedings, Settlement and Payment Orders
Insolvency Law Contempt of Court Corporate Law Corporate Insolvency Resolution Process Undertakings to Court Contempt Proceedings Settlement and Payment Orders

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Parties

Reliance Communication Limited & Ors.

Petitioner

State Bank of India & Ors.

Respondent

Procedural Posture

Writ Petition (civil) With Contempt Petitions / Judgment

Legal Issues

  1. 1 Whether the Reliance Companies committed contempt of court by failing to pay INR 550 crore to Ericsson as per undertakings and Supreme Court orders.
  2. 2 Whether the undertakings given were conditional upon sale of assets, contrary to previous unconditional undertakings.
  3. 3 Whether contempt proceedings lie against the Chairman of SBI.

Ratio Decidendi

The three Reliance Companies wilfully defaulted on their unconditional undertakings to pay INR 550 crore to Ericsson within the prescribed time limit, substituted them with conditional undertakings linked to asset sale, and failed to pay, thus committing contempt of court; the contempt needs to be purged by payment as ordered, failing which imprisonment will follow.

Court Disposition

Contempt petitions disposed of; Reliance Companies held guilty of contempt.

Orders

  • Registry directed to pay INR 118 crore deposited to Ericsson within one week.
  • Reliance Companies directed to pay INR 453 crore to Ericsson within four weeks from judgment date to purge contempt; in default, Chairmen face three months’ imprisonment.