In February, the Supreme Court docket had given a ruling in a longstanding IBC case that telecom service suppliers (TSPs) don’t personal spectrum, a public useful resource, and so can not embody it amongst their pool of ‘property’ for insolvency or liquidation.
Reliance Communications has filed a evaluation petition difficult an earlier Supreme Court docket judgement that excluded spectrum as an ‘asset’ for insolvency and liquidation. The corporate requested for a keep on the ruling, arguing that the correct to make use of spectrum is an ‘intangible asset’ and can’t be faraway from the purview of the Insolvency and Chapter Code.
Anish Niranjan Nanavaty, Decision Skilled of Reliance Communications, within the 182-page plea argued that the exclusion of spectrum from the insolvency framework would deem the Code unworkable for the telecom sector and all different enterprises dependent upon government-granted rights to make use of sovereign sources, together with mining, hydropower and infrastructure sectors. This, in flip, will discourage banks from offering monetary help to any business challenge involving government-allocated pure sources.
Proper as asset
In February, the Supreme Court docket had given a ruling in a longstanding IBC case that telecom service suppliers (TSPs) don’t personal spectrum, a public useful resource, and so can not embody it amongst their pool of ‘property’ for insolvency or liquidation. It dominated that the Code excludes any property over which a company debtor has no possession rights.
In response, the plea argued the corporate by no means claimed possession of spectrum as a pure useful resource and stated, “The asset into consideration shouldn’t be the spectrum itself however the legally enforceable proper to make use of spectrum, which vests within the licensee during the licence and is able to business exploitation. Telecom corporations constantly recognise such rights of their monetary statements as intangible property forming the spine of their enterprise worth.”
It additionally identified how the Division of Telecommunications (DoT) recognises this proper of telcos to make use of spectrum as an asset below the Tripartite Settlement. Telecom corporations rely upon continued spectrum for its community infrastructure, subscriber providers, enterprise connectivity options and income streams. The exclusion of spectrum from the insolvency course of would then render the CIRP framework unworkable for such sectors. Contemplating this, DoT can not concurrently contend that the asset producing its dues lies exterior the insolvency framework, stated the corporate.
Liquidation issues
Nanavaty argued that if such a core operational asset of the corporate is excluded from the insolvency property, the corporate must go for liquidation, defeating the first goal of the Code to supply decision to burdened corporations.
“This shall have profound adverse impression on general credit score enlargement within the economic system with domino impact on capital funding local weather and infrastructure growth,” stated the plea.
Earlier, businessline had reported on Reliance Communication’s Committee of Collectors (CoC) finishing up an in depth evaluation on the judgement and talks of the DoT presumably submitting a evaluation petition on the corporate’s excellent AGR dues.
Inner inconsistencies
The plea additionally claims inner inconsistencies within the judgement concerning spectrum responsibilties. If spectrum is a sovereign useful resource, the liabilities arising from its grant should additionally journey with the useful resource. As an alternative, the judgment permits DoT to reclaim spectrum as a sovereign useful resource in addition to implement your entire spectrum-related debt in opposition to the Company Debtor inside CIRP, stated the plea.
“This structural asymmetry grants de facto super-priority to DoT, opposite to the statutory waterfall mechanism and the precept of equitable remedy of collectors embedded within the Code,” stated the plea.
The plea burdened this level contemplating the court docket judgement had failed to find out DoT’s standing below the Code by permitting the federal government’s enchantment “partially”. It thus argues that the court docket disrupts the unified construction of the Code and renders the insolvency framework ineffective for telecom and equally located enterprises.
Revealed on March 15, 2026
