Supreme Court reserves verdict on whether insolvent telcos RCom, Aircel can sell spectrum to repay lenders

Core Viewpoint - The Supreme Court is deliberating on the treatment of telecom spectrum held by Aircel and Reliance Communications (RCom) during their insolvency proceedings, with a decision pending that could clarify the ownership and monetization of spectrum under the Insolvency and Bankruptcy Code (IBC) [1][2]. Group 1: Legal Proceedings - The Supreme Court is reviewing petitions from State Bank of India (SBI) and the two insolvent telecom companies, challenging a 2021 order from the National Company Law Appellate Tribunal (NCLAT) regarding the transferability of spectrum during insolvency [2][7]. - The court's decision will address whether telecom spectrum is an asset that can be liquidated under the IBC or if it remains a government asset, as the government claims it is held in trust for the public [6][7]. Group 2: Arguments Presented - Advocates for Reliance Telecom's resolution professional argue that the telecom department has accepted the IBC's framework and cannot deny its role in the insolvency process [3][4]. - The argument emphasizes that without the spectrum and licenses, the companies would be left with no viable assets for resolution, potentially undermining the IBC's objectives [5][6]. Group 3: Stakeholder Positions - SBI contends that the telecom spectrum should be considered part of the insolvency process and can be sold to recover dues, positioning it as an intangible asset [6][7]. - The government maintains that the spectrum belongs to the state and cannot be sold or transferred under insolvency proceedings, asserting that the license only grants usage rights [6][7].