More Stories

Informist, Monday, Aug. 24, 2026

 

--Bks, RComm move HC over telecom dept invoking INR-8-bln bk guarantee for co 

--HC: Bks not encashing guarantees not to be considered RBI default on RComm 

--HC to hear Sept 3 bks', RComm plea vs telecom dept in bk guarantee case 

 

NEW DELHI – On the Department of Telecommunications' move to invoke YES Bank, State Bank of India, Punjab National Bank, and Canara Bank's INR-8-billion bank guarantees in the insolvency proceedings of Reliance Communications Ltd, the Delhi High Court Monday said any action of non-encashment bank guarantees by these banks will not be considered as "RBI default case", till the next date of hearing on Sept. 3. Contesting the high court's order, the Department of Telecommunications argued that this was just INR 8 billion of bank guarantee out of INR 400 billion, which is yet to be recovered in the Reliance Communication insolvency case.

 

In case it invokes the bank guarantees and the banks don't pay, they are not declared defaulters through the court's order, said the telecommunications department. Earlier, the Supreme Court had held that the spectrum is a national asset and the Centre, under the public doctrine, has contractual, sovereign right and is fully empowered to administer this right for the spectrum, said the department.  

 

The banks have argued that the invocation of notice by the telecommunications department was illegal, arbitrary, ultra vires and without jurisdiction, and was liable to be quashed. The apex court's earlier judgement only dealt with whether spectrum in the insolvency proceedings had to be treated as an asset, said the banks. As the top court's judgment does not deal with bank guarantees, the verdict is wholly irrelevant to the power sought to be exercised by the telecommunication department, said the banks. 

 

On Feb. 13, the top court had held that spectrum couldn't be transferred or sold by telecom companies in insolvency proceedings. 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 was a material resource, and its control with all its attributes, including benefits, had to be secured for citizens. 

 

In 2019, the Mumbai bench of the National Company Law Tribunal admitted a petition by Ericsson India Pvt. Ltd. to start insolvency proceedings against Reliance Communications and other related companies. Thereafter, the case has witnessed layers of litigation, with the Supreme Court in February ruling on whether spectrum has to be treated as an asset. 

 

At 1237 IST, shares of Reliance Communications Ltd. were unchanged at INR 0.80 on the National Stock Exchange. Shares of State Bank of India were down 1.3% at INR 1,035.30, those of YES Bank were down 1% at INR 22.57, Punjab National Bank's shares were down 0.6% at INR 115.89, and shares of Canara Bank were down 2% at INR 127.33.  End 

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.