The National Company Law Appellate Tribunal (NCLAT) on Monday allowed telecom gear maker Ericsson India to file its objection by February 8 over Reliance Communications’ plea to proceed with insolvency process. A two-member bench headed by Chairman Justice S J Mukhopadhaya also said that until further orders of the NCLAT or the Supreme Court, no one could sell, alienate, or create third party rights over RCom’s assets.
“Until further orders, the Appellants, corporate debtor (RCom), Respondent(Ericsson India), guarantors or any third party will not sell, transfer or alienate any moveable or immovable property of RCom nor invoke any guarantee or mortgage or any other instrument without prior permission of this appellate tribunal or Supreme Court,” the NCLAT said.
The appellate tribunal has directed to list the matter on February 12 for orders. During the proceedings, senior advocate Dushyant Dave appearing for Ericsson opposed the withdrawal of petitions filed by three Reliance Group employees against an NCLT order.
On this, NCLAT said, “Taking into consideration the nature of the case, we allow the Respondents (Ericsson India) to file their short reply affidavit by February 8, 2019.”
The NCLAT’s order came on Monday, over the urgent mentioning done by three Reliance Group employees – Satish Seth, Punit Garg and Suresh Madihally Rangachar – seeking withdrawal of their appeals against the orders of the Mumbai bench of the National Company Law Tribunal (NCLT).
On May 15, 2018, the Mumbai bench of NCLT had admitted an insolvency petition filed by Ericsson against Reliance Communications and two of its subsidiaries seeking to recover unpaid dues.
However, on May 30 NCLAT granted a conditional stay on insolvency proceedings against RCom and its subsidiaries — Reliance Infratel and Reliance Telecom. The tribunal had directed RCom and its subsidiaries to pay Rs 550 crore to Ericsson India in 120 days, failing which it will direct insolvency proceedings against the company.
On February 1, RCom had informed that it has decided to opt for insolvency proceedings following its failure to sell assets for paying back its lenders. RCom even failed to sell spectrum to Mukesh Ambani’s Reliance Jio, a deal that was expected to bring some relief to the cash-strapped company.