• Litigation
• 2 min read

Reliance Communications files review plea against SC order on spectrum sale under IBC

The company, through its resolution professional, said the judgement suffers from errors and failed to address and render the findings on several fundamental issues that were raised before the court, thereby necessitating a review.

• ET Bureau

• Published On Mar 16, 2026 at 11:30 AM IST

Reliance Communications (Rcom) has filed a review petition in the Supreme Court against the latter’s February 13 order, which stated that spectrum can’t be sold and transferred by companies under the Insolvency and Bankruptcy Code (IBC) as it’s a scarce public resource.

The company, through its resolution professional, said the judgement suffers from errors and failed to address and render the findings on several fundamental issues that were raised before the court, thereby necessitating a review.

“The judgment threatens to fundamentally disrupt credit markets, as banks will inevitably recalibrate their risk assessment for any project involving governmental allocation of natural resources,” the petition said, a copy of which has been seen by ET.

Advt It said by excluding spectrum from the insolvency framework, the entire IBC code has become unworkable for the telecom sector and for all enterprises dependent upon government-granted rights to use sovereign resources, including mining, hydropower, and infrastructure sectors.

The Supreme Court order marked a win for the government and defeat for lenders to companies like Rcom and Aircel. In the order, the top court made it clear that IBC cannot be the guiding principle for restructuring ownership and control of spectrum, which is a material resource, and its control with all its attributes, including benefits, have to be secured for citizens.

The SC had dismissed appeals by the State Bank of India-led committee of creditors (CoC), UV Asset Reconstruction Co as well as the resolution professionals running Aircel units, Rcom and Reliance Telecom. They had contended that spectrum is an intangible asset.
The Department of Telecommunications (DoT) had taken the stand that spectrum belongs to the people, being a valuable natural resource, and thus should return to the government. The court held that “spectrum allocated to TSPs (telecom service providers) and shown in their books of account as an ‘asset’ cannot be subjected to proceedings under IBC.”

Advt “The statutory regime under IBC cannot be permitted to make inroads into the telecom sector and rewrite rights and liabilities arising out of administration, usage and transfers of spectrum that operate under the legal regime related to the sector.”

Through the review petition, clarity is sought on issues where ambiguity is left in terms of how to operate the IBC code going forward in the light of the judgement.

The petitioners have highlighted several errors in the judgement including its failure to give effect to the statutory protection under Section 14 of the code. “The Impugned judgment holding that spectrum lies outside the insolvency framework altogether renders this protection nugatory-an outcome directly contrary to Parliament's express mandate,” it said.