NEW DELHI: Anil Ambani-led Reliance Communications (RCom) on Tuesday withdrew its petition challenging a National Company Law Tribunal (NCLT) order that allowed insolvency resolution process against the company. The debt-laden telecom firm had on February 1 decided to file for insolvency. The National Company Law Appellate Tribunal permitted a plea by RCom to readmit insolvency proceedings under the Insolvency and Bankruptcy Code.
“We allow the appellant (RCom) to withdraw the appeal. The interim order on stay of insolvency proceedings stands vacated,” said a twojudge bench led by Justice SJ Mukhopadhaya Swedish telecom equipment manufacturer Ericsson, which received its dues of `550 crore from RCom following a Supreme Court order, had opposed the move by RCom.
This is because there is a possibility that Ericsson India may have to refund the entire amount it got from RCom if insolvency proceedings against the latter restarted. RCom had paid `458.77 crore to Ericsson, to avoid a potential three-month jail term for its chairman Anil Ambani on March 18, a day before the deadline set by the apex court was to expire.
Ericsson had in September 2017 moved insolvency petitions against RCom and its two subsidiaries, Reliance Telecom and Reliance Infratel, at the Mumbai bench of NCLT for failing to pay their dues of around `1,500 crore. Meanwhile, RCom, which had struck a deal with Mukesh Ambani’s Reliance Jio to sell its spectrum and other assets to raise funds, had to call off the deal.
While RCom eventually paid off dues to Ericsson, the company on February decided to go for insolvency proceedings. Its board had noted that despite the passage of so much time, the lenders had received zero proceeds from the proposed asset monetisation plans and the overall debt resolution process was yet to make any headway.