Bombay HC dismisses petition by RCom against YOU Telecom

RCIL had in February 2009 filed a legal petition against YOU Telecom for allegedly not paying Rs37 lakh in dues for services provided

Khusboo Narayan

Mumbai: The Bombay high court on Friday dismissed a winding-up petition filed by Reliance Communications Infrastructure Ltd (RCIL), a subsidiary of Reliance Communications Ltd (R-Com), against YOU Telecom India Pvt. Ltd. RCIL had in February 2009 filed a legal petition against YOU Telecom for allegedly not paying Rs37 lakh in dues for services provided. It had also sought 30% interest for delayed payment.
“We have demonstrated the court that service was not up to mark and there were series of emails of such complaints that were made to RCom. In fact RCom has admitted deficiency in its services. Under such circumstances the alleged amount should not be treated as debt against the company and any order such as winding up may not be passed,” E.V.S. Chakravarthy, chief executive officer of YOU Telecom, wrote in an email statement.

“We have also represented the court that the dispute pertains to service providers and hence RCom should have approached appropriate forum (say TDSAT) for the same. The Honourable Court was kind enough to dismiss the petition and directed RCom to approach appropriate forum for any relief....,” he added.

An immediate comment could not be had from Rcom.

YOU Telecom, a broadband service provider owned by Citigroup Venture Capital International, Citigroup Inc.’s private equity arm for growth capital, had in 2007 entered into a contract for bandwidth infrastructure, RCIL said in its petition to the court