Spectrum can't be transferred, sold by telcos: Supreme Court

Core Viewpoint - The Supreme Court ruled that telecom spectrum is a scarce public resource and cannot be transferred or sold under the Insolvency and Bankruptcy Code (IBC), marking a significant win for the government and a setback for lenders involved with Aircel Ltd [7]. Group 1: Legal Framework and Court Rulings - The court stated that the bankruptcy code cannot guide the restructuring of ownership and control of spectrum, emphasizing that its control must be secured for citizens [1][7]. - The court dismissed appeals from the State Bank of India-led committee of creditors and others, who argued that spectrum, as an intangible asset, could be monetized under the insolvency process [7]. - The court found that spectrum allocated to telecom service providers (TSPs) cannot be subjected to IBC proceedings, reinforcing that the statutory regime under IBC should not interfere with the telecom sector's legal framework [4][7]. Group 2: Implications for Telecom Sector - The court criticized the lenders' interpretation of the law as "myopic," stating that the entirety of the telecom sector cannot be governed by the IBC due to differing subjects and purposes of the statutes involved [5][7]. - The tripartite agreement between the Department of Telecommunications (DoT), TSPs, and banks is designed to secure financial assistance for phone companies while protecting lender interests, but lenders are barred from operating services [6][7]. - The court highlighted that while the telecom license may be conditionally transferable to protect lender interests, such transfers remain under the licensor's regulatory control [6][7]. Group 3: Ownership Rights and Asset Classification - The IBC explicitly excludes assets over which corporate debtors do not have ownership rights from the resolution framework, aligning with the 2015 Bankruptcy Legislative Reforms Committee Report that states not all assets can be liquidated [6][7].