3 months ago
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The Supreme Court connected Friday (February 13, 2026) laid down that telecom work providers (TSPs) bash not ain spectrum, a precious and finite nationalist assets meant to beryllium utilized for the communal bully of all, and cannot see it among their excavation of “assets” for insolvency oregon liquidation.
A Bench of Justices P.S. Narasimha and Atul Chandurkar held that Insolvency and Bankruptcy Code (IBC) excludes immoderate assets implicit which a firm debtor has nary ownership rights.
“Mere designation of spectrum licensing rights arsenic an intangible plus by TSPs successful the fiscal statements is not conclusive of their ownership, arsenic it lone represents power implicit aboriginal economical benefits,” Justice Narasimha clarified the law.
The tribunal said spectrum was a scarce earthy assets owned by the radical of India, with ineligible rubric vesting exclusively successful the Union of India, which holds it successful spot for the public.
“Licensees get nary proprietary involvement successful spectrum,” Justice Narasimha, who authored the judgment, underscored.
‘Limited privilege’
The specified assistance of spectrum nether a licence does not mean a implicit transportation of a finite earthy assets from the Union authorities to a TSP. “It confers lone a limited, conditional and revocable privilege to usage spectrum, taxable to statutory requirements, licence conditions and overriding nationalist interest,” Justice Narasimha clarified.
The tribunal observed that the Union arsenic the proprietor and trustee of spectrum connected the 1 manus and the Telecom Regulatory Authority of India (TRAI) arsenic the regulator connected the other, inhabit the full state of telecommunications.
“The statutory authorities nether IBC cannot beryllium permitted to marque inroads into the telecom assemblage and rewrite and restructure the rights and liabilities arising retired of administration, usage, and transfers of spectrum which run nether exclusive ineligible authorities concerning telecommunications. The disharmony caused by applying IBC to the telecom assemblage which operates nether a antithetic ineligible authorities was ne'er intended by the Parliament,” the tribunal noted.
The verdict is the culmination of a bid of events dating backmost to the assistance of telecom licences to firm debtors — Aircel Limited, Aircel Cellular Limited and Dishnet Wireless Limited — by the Department of Telecommunications nether Unified Access Service Licences (UASL). Domestic lenders, including the State Bank of India (SBI), had extended indebtedness facilities to the firm debtors for acquisition of rights to usage spectrum. Eventually, the firm debtors failed to wage the licence fee. When DoT attempted to retrieve these amounts, the debtors invoked IBC for a voluntary firm insolvency solution process.
The Supreme Court judgement was based connected a bid of abstracted appeals filed by SBI and others against a 2021 National Company Law Appellate Tribunal (NCLAT) judgement requiring TSPs undergoing insolvency to wide statutory dues to DoT earlier transferring oregon selling spectrum nether the IBC.
Friday’s (February 13, 2026) judgement made it wide that the spectrum cannot beryllium brought nether the IBC framework. The TSPs did not ain spectrum successful the archetypal spot to merchantability it.
Besides, the apical tribunal made it wide that DoT dues owed by TSPs were not “operational debts” nether the IBC.
“Licence fees and spectrum usage charges originate from the assistance of a sovereign privilege and correspond regulatory consideration, not outgo for goods oregon services. The narration betwixt the Union and the licensee is that of sovereign licensor and licensee, not a commercialized creditor-debtor relationship. Treating specified dues arsenic operational indebtedness would licence insolvency proceedings to undermine statutory and regulatory power implicit earthy resources,” the Supreme Court held.
