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Informist, Tuesday, Apr. 21, 2026

 

NEW DELHI – The State Bank of India, on behalf of the committee of creditors of Aircel Ltd., Aircel Cellular Ltd. and Dishnet Wireless Ltd., Tuesday filed a review petition in the Supreme Court against its Feb. 13 verdict that spectrum cannot be transferred or sold by telecom companies for insolvency proceedings. State Bank of India said that the Supreme Court's judgement suffered from patent errors on the face of the record which went to the root of the issue.

 

The apex court's verdict has resulted in manifest injustice and wrong being caused to the stakeholders, including the committee of creditors, warranting exercise of review jurisdiction of the court, said State Bank of India. The top court has not dealt with the issue of whether the lenders to Aircel entities held a valid and legitimate security interest over the spectrum and the licences by virtue of a rupee loan facility agreement, the indentures of mortgage and other agreements between the parties, said the bank.

 

Further, the top court has not answered whether the bank's security interest can be enforced under the Insolvency and Bankruptcy Code, 2016, whether the insolvency proceedings against Aircel entities were initiated with bona fide intent in genuine financial distress, and whether Department of Telecommunication was an operational creditor of the Aircel entities, said SBI. These answers will have material bearing on the status of lenders as secured or unsecured creditors, the status of Department of Telecommunication as a creditor and the treatment of government dues in the insolvency of a telecom service provider, said the bank.

 

The top court's verdict was likely to compel banks and financial institutions to undertake a fundamental overhaul of their credit appraisal and risk evaluation frameworks insofar as they related to lending to the telecom sector and comparable sectors such as mining, hydropower and infrastructure whose viability was contingent on rights granted by the State, said SBI. Banks and financial institutions may grow increasingly reluctant to finance such commercial ventures, which will have consequential and cascading repercussions for the investment climate and pace of infrastructure development across the country, said the bank.

 

The state-owned lender said that the top court's verdict would likely have significant ramifications on the present and future insolvencies of companies which operate in regulated sectors, including companies which were engaged in oil and gas exploration, mining, power generation or any sector whose commercial value was principally derived from rights granted by the State. Thus, the verdict caused irreparable prejudice not only to the lenders' legitimate financial interests, most of which were public sector banks, but equally to the public exchequer at large with consequential and far-reaching ramifications on the overall financial health of the economy, especially the telecom sector, said the bank.

 

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, 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. Last month, the resolution professional of Reliance Communications Ltd. had also filed a review plea against the top court's verdict.

 

Tuesday, shares of State Bank of India closed 0.4% higher at INR 1,111.85 on the National Stock Exchange, and shares of Reliance Communications ended 1% higher at INR 1.01.  End 

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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