In a major blow to Reliance Communications chairman Anil Ambani, the Supreme Court on Wednesday held him and two other directors guilty in a contempt of court petition filed by telecom equipment maker Ericsson India over not clearing its dues.

Coming down heavily on Ambani and his firms, a bench led by Justice RF Nariman said Ambani and the other two directors have to pay Rs 453 crore to Ericsson India within four weeks, failing which they will have to serve a three-month prison term. The court also imposed a fine of Rs 1 crore on each of them and if the amount is not deposited within a month, then an additional one-month prison term will be awarded.

The other two directors are Satish Seth, chairman of Reliance Telecom, a wholly-owned subsidiary of RCom and Chhaya Virani, chairperson of Reliance Infratel.

The court also directed that the amount of Rs 118 crore, already deposited by Reliance Group in the Supreme Court registry, will be paid to Ericsson.

The Ambani firm was supposed to pay Ericsson India’s dues worth `550 crore.

In a statement issued after the SC order, RCom said, “We respect the judgment of the Hon’ble Supreme Court. The RCom Group shall comply with the same.”

The basic contention of Anil Ambani was that his firms tried to sell their assets to elder brother Mukesh Ambani’s Reliance Jio, but the deal could not materialise. Subsequently, his company has entered insolvency proceedings and is not in control of funds.

Reliance Communications had entered into a `25,000-crore deal with Jio under which it was selling its spectrum, towers and fibre to the latter. The deal had been approved by the SC, but the department of telecommunications did not accord its approval to it. This was because the buyer, Reliance Jio, refused to stand guarantor for any past dues of RCom which may come to light in future. The spectrum trading guidelines under which the deal was being done requires the buyer/seller to stand as a guarantor for any dues which may come up in future.

With the deal collapsing, RCom could not get funds to pay the dues of Ericsson India. However, the court refused to accept the plea that the company or Ambani’s earlier undertaking to it was in anyway linked to the success of its deal with Jio.

“There is no doubt whatsoever that the three Reliance companies have wilfully not paid the sum of `550 crore plus interest and have thus breached the undertakings given to this court…We are also of the view that wilful default is made out,” Justice Nariman held.

“We are of the view that any unconditional apology given that there was no intention to make any wrongful undertaking or that the undertaking was submitted bonafide must be rejected. It is clear that this reply affidavit clearly demonstrates the cavalier attitude of Ambani to the highest court of the land,” Justice Nariman stated in the 41-page judgment.

The order said that linking the payment of `550 crore to the sale of assets of the Reliance companies “is a deliberate misstatement made in the undertakings as well as the applications for extension of time filed before this court, which was done with the purpose of circumventing its orders”.

The apex court on October 23 asked RCom to clear the dues by December 15, 2018.

The court, however, dismissed the contempt petition against the State Bank of India chairman, saying no contempt will lie against him as the Ericsson transaction and the sale of assets by the Joint Lenders’ Forum were completely independent of each other. It also said the Ericsson’s stand that the SBI chairman was also bound to have handed over its dues was “patently incorrect as SBI had nothing to do with this payment”.

Ericsson India had alleged collusion between lenders and RCom. The judges also noted that “they did its utmost to lend a helping hand, so that, independently of these orders, sale of assets could also be affected”.