HC defreezes Nokia's assets; paves way for sale to Microsoft

 In a major relief to handset maker Nokia, the Delhi High Court today defreezed the assets of the Finnish firm India, including in Chennai, paving the way for their sale to Microsoft.

The court, however, imposed certain conditions on Nokia India and its parent firm Nokia Corporation Finland.

Nokia had pleaded before the high court for a direction to the Income Tax department for lifting of the stay on transfer of assets, including the Chennai manufacturing plant, in view of its USD 7.2 billion global deal with Microsoft.

A bench of justices Sanjiv Khanna and Sanjeev Sachdeva said "we permit and allow sale of assets by Nokia India to Microsoft/Microsoft International."

The bench at the same time asked Nokia India and Nokia Corporation(Corp) to fulfil certain conditions.

"Nokia Finland will be bound by the statement that they shall be jointly liable and shall pay tax demand determined and payable under Section 201/201(1A), interest and penalty thereon.

"Nokia Finland shall be liable to pay taxes including penalty and interest due and payable by them as determined under the Income Tax Act," the bench said.

Directing Nokia to deposit a minimum of Rs 2,250 crore in an escrow account, the court said "details of which will be furnished to the IT department within one month of the agreement with Microsoft/Microsoft International.

"The amount of deposit will go up or increase upon higher consideration being received from Microsoft as per valuation report."

The court also clarified saying "Rs 2250 crore or the higher amount, which will be deposited in the escrow account, at the option of the respondents may not be adjusted or appropriated against tax demands including interest and penalty relating to TDS/order under Section 201/201(1A) or tax demands determined and payable by Nokia Finland...."