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Informist, Sunday, Mar. 15, 2026

 

NEW DELHI – The resolution professional of Reliance Communications Ltd. has filed a review plea in the Supreme Court against the latter's Feb. 13 verdict that spectrum cannot be transferred or sold by telecom companies in insolvency proceedings. Seeking a stay on the Supreme Court's February verdict, the resolution professional, Anish Niranjan Nanavaty, said that the right to use spectrum is an 'intangible asset' and cannot be removed from the purview of the Insolvency and Bankruptcy Code, 2016.

 

Excluding spectrum from the insolvency law would deem the 2016 Code unworkable for the telecom sector and all other enterprises dependent upon government-granted rights to use sovereign resources, including mining, hydropower and infrastructure sectors, he said. The verdict, in turn, will discourage banks from providing financial assistance to any commercial project involving government-allocated natural resources, he added.

 

The asset under consideration is not the spectrum itself but the legally enforceable right to use spectrum, which vests to the licensee for the duration of the licence and is capable of commercial exploitation, said the officer. Telecom companies consistently recognise such rights in their financial statements as intangible assets forming the backbone of their enterprise value, the officer said.

 

The officer argued that if spectrum, a core operational asset of the company, is excluded from the insolvency estate, Reliance Communications would have to go for liquidation, defeating the primary objective of the insolvency law  to provide resolution to stressed companies. This would have a profound negative impact on overall credit expansion in the economy with a domino effect on capital investment, climate and infrastructure development, said the officer.

 

Allowing the plea of the Department of Telecommunications, the top court had earlier rejected appeals by the State Bank of India-led committee of creditors of Aircel Ltd., and others against a verdict by the National Company Law Appellate Tribunal. The appellate tribunal had ruled in 2021 that spectrum could be transferred by a telecom company only if the government's dues with respect to the asset were cleared. The apex court had said that the Insolvency and Bankruptcy Code, 2016, couldn't be the guiding principle for restructuring the ownership and control of spectrum, which is a material resource, and its control with all its attributes, including benefits, have to be secured for citizens.  

 

On Friday, shares of State Bank of India ended 3.5% lower at INR 1,047.00 on the National Stock Exchange, and shares of Reliance Communications Ltd. ended 4.1% higher at INR 1.01.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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