# In the matter of Reliance Telecom Ltd. C.P. (IB)-1386-(MB)-2017

> NCLT judgment dated 2018-05-17. Citation: TCN-2018-NCLT-01395. Ericsson India Pvt. Ltd. filed three separate Company Petitions (1385/2017, 1386/2017, and…

- **Court:** NCLT
- **Order date:** 17 May 2018
- **Citation:** TCN-2018-NCLT-01395
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/reliance-telecom-ltd-cp-ib-1386-mb-2017-10938862

## Summary

### Background

Ericsson India Pvt. Ltd. filed three separate Company Petitions (1385/2017, 1386/2017, and 1387/2017) under Section 9 of the Insolvency & Bankruptcy Code, 2016, against Reliance Infratel Ltd. (RITL), Reliance Telecom Ltd. (RTL), and Reliance Communications Ltd. (RCom), respectively. These petitions were filed due to the failure of the Reliance companies to pay Ericsson for services rendered under a Managed Services Agreement (MSA) dated 25.01.2013. The total outstanding dues as of 31.03.2017 amounted to ₹9,78,72,06,974. Ericsson sought initiation of the Corporate Insolvency Resolution Process (CIRP) against each of the Reliance companies for their respective defaulted amounts: ₹427,21,40,509 against RITL, ₹114,54,46,238 against RTL, and ₹436,96,20,227 against RCom.

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## Facts

Ericsson India Pvt. Ltd. provided telecommunications services to Reliance Communications Ltd. (RCom), Reliance Telecom Ltd. (RTL), and Reliance Infratel Ltd. (RITL) under a Managed Services Agreement (MSA) dated 25.01.2013. RCom holds 96% stake in RITL and 100% stake in RTL. As of 31.03.2017, the total outstanding dues from the three companies amounted to ₹9,78,72,06,974. The individual outstanding amounts were: ₹427,21,40,509 from RITL, ₹114,54,46,238 from RTL, and ₹436,96,20,227 from RCom. Reliance repeatedly assured Ericsson that it would pay the outstanding amounts. On 26.12.2016, Reliance emailed Ericsson a liquidation schedule. On 28.12.2016, Reliance gave an undertaking to make monthly payments from April 1, 2017, and clear the entire overdue by September 20,

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## Issues and analysis

### Issue 1: Whether the debt is in …

**Ratio:** The existence of debt is determined by the admission of the debt by the corporate debtor

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**Reasoning:** Reliance sent a letter on 28.04.2017 confirming the outstanding amount as of 31.03.2017.

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**Interpretation:** The court interprets that an admission of debt, coupled with a lack of dispute

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**Application:** Reliance's confirmation letter and payment requests serve as evidence of the

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## Parties

- **Judges:** B.S.V. Prakash…; RavikumarDu…
- **Appellants:** Ericsson India…
- **Respondents:** Reliance Infratel…

## Timeline

- **2013-01-25 — Managed Services…**: Ericsson and Reliance entered into a…
- **2017-03-31 — Outstandin…**: Total outstanding dues from Reliance to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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