The State Bank of India (SBI), on behalf of lenders to the bankrupt Aircel group, has approached the Supreme Court of India seeking a review of its earlier judgment that barred telecom spectrum from being treated as an asset under insolvency proceedings, warning of far-reaching implications for the banking system and infrastructure financing.
In a review petition, SBI argued that the ruling contains errors apparent on the face of the record and fails to address key legal questions framed earlier by the court. It said the judgment overlooked issues central to lenders, including the treatment of spectrum usage rights and the classification of government dues under the Insolvency and Bankruptcy Code.
The February ruling had upheld the government’s position that spectrum, as a sovereign asset, cannot be treated as a tradable or transferable asset during insolvency resolution.
SBI contended that the court’s narrow focus on whether telecom companies invoked insolvency to avoid licence dues resulted in incomplete adjudication. It argued that the judgment failed to rule on whether lenders hold a valid security interest over spectrum usage rights and whether such rights can be monetised in insolvency proceedings. The petition said the judgment had not rendered findings on several material questions that have a direct bearing on the status of lenders and the treatment of government dues.
The dispute traces back to the insolvency of Aircel and its group entities in 2018, following defaults on loans of over Rs 130 billion to a consortium led by SBI. During the resolution process, lenders sought to treat spectrum usage rights as assets, while the Department of Telecommunications maintained that dues must be cleared before any transfer.
