The Joint Lenders’ Forum, headed by the State Bank of India (SBI), on Tuesday (12 March) stated before the National Company Law Appellate Tribunal (NCLAT) that Reliance Communications (RCom) should have to pay Ericsson on its own without saddling its previous debts on creditors, reports Financial Express. The bank has denied RCom’s request to released Rs 266 crore of the company’s income-tax refunds.
Senior counsel Neeraj Kishen Kaul, who was arguing on behalf of SBI, contended that the funds did not belong to RCom.
“An ‘errant’ firm is wanting public money from the Retention and Trust Account formed in 2017, that is prior to initiation of any IBC proceedings against it, to clear its debts. No encumbrances can be created on the tax refund of Rs 60 crore received in this account on which only the lenders have a lien. You gave undertaking to the SC and NCLAT,” Kaul told the two-member bench of the tribunal headed by Justice S J Mukhopadhyay.
Kaul also mentioned how the Supreme Court has found the three Reliance firms in the contempt of court order to pay Rs 550 crore plus interest.
“The SC has nowhere said that the money will come from the Retention and Trust account. You (Reliance firms) are conveniently trying to pass on your liability on us as you are being guilty and your chairmen will have to go to jail,” he argued.
The bench responded that any insolvency plea against RCom cannot be initiated till the time there is a final settlement with Ericsson, questioning whether the lending group’s stance would stand as per provisions of the Insolvency and Bankruptcy Code if proceedings under the Act start.
The court also criticised SBI for creating a false impression about the valuation of the RCom-Jio deal which had fallen through.
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