The Supreme Court on Friday held that spectrum cannot be treated
as a corporate asset capable of being restructured under the Insolvency and
Bankruptcy Code (IBC), placing it beyond the insolvency asset pool.
“We hold that Spectrum
allocated to TSPs (Telecom Service Providers) and shown in their books of
account as an ‘asset’ cannot be subjected to proceedings under Insolvency and
Bankruptcy Code, 2016," a bench of Justice PS Narasimha and Justice AS
Chandurkar said in their ruling.
Framing the constitutional context, the court observed, “We
could demystify the legal challenge by first understanding spectrum as a
material resource, precisely as what our Constitution refers to as the material
resource of the community.”
The judgment arose from the insolvency of Aircel Limited, Aircel
Cellular Limited and Dishnet Wireless Limited. After defaulting on licence fee
and spectrum usage charges, the companies entered voluntary insolvency in 2018.
The Department of Telecommunications (DoT) filed claims of nearly ?9,900 crore
towards unpaid dues. Lenders led by State Bank of India argued that spectrum
usage rights, reflected as intangible assets, could be dealt with under the IBC
framework.
The SC judgement has cleared the path for DoT to take back
airwaves allocated to Aircel and Reliance Communications and Videocon, said
sources aware of the development, who added that the DoT was examining the apex
court's order and would begin proceedings of taking the spectrum back soon.