The Supreme Court, in its recent ruling, held that spectrum allocated to Telecom Service Providers (TSPs), even if reflected in their books of account as an “asset”, cannot be subjected to proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). The judgment has significant implications for assets that arise from a concession, grant, privilege, or licence by the State.
The Rationale
Spectrum is not an asset under the IBC
Telecom spectrum is a sovereign resource. Licensees enjoy only a regulated and conditional right of use; they do not enjoy legal ownership. The recognition…