Supreme Court Dismisses Reliance Communications Review Plea on Telecom Spectrum Sale Under IBC — September 14, 2026

In a decisive setback for the lenders of debt-ridden telecom operators, the Supreme Court of India has rejected the review petitions filed by Reliance Communications Limited (RCom) and its subsidiary Reliance Telecom Limited (RTL), upholding its ruling that telecom spectrum cannot be treated as an ordinary corporate asset or sold under the Insolvency and Bankruptcy Code (IBC).

A two-judge bench comprising Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar dismissed the review petitions, observing that no error apparent existed in the apex court's earlier February 13, 2026 judgment to warrant a review under Order XLVII Rule 1 of the Supreme Court Rules. The bench also turned down requests for an open-court oral hearing. The order, passed on July 28, 2026, and uploaded on September 8, 2026, was disclosed by RCom in a regulatory filing under Regulation 30 to stock exchanges.

Core Legal Stance: Spectrum as a Sovereign Trust

The apex court's February 13 judgment had established that airwaves allocated to telecom service providers (TSPs)—even if recorded in their books of accounts as assets—cannot be subjected to insolvency proceedings or transferred to third parties to settle debt under the IBC.

The court reiterated that spectrum is a scarce natural and sovereign resource held by the government in public trust for citizens. Consequently, the statutory framework of the IBC cannot override the Department of Telecommunications' (DoT) regulatory oversight or rewrite statutory dues and liabilities arising out of spectrum licensing and usage.

In its review plea, RCom and resolution professionals argued that excluding spectrum rights from the resolution process renders the IBC unworkable for infrastructure sectors that rely on government-allocated resources, such as telecom, mining, and hydropower. However, the top court found no merit in reopening the verdict.

Direct Impact on RCom's Resolution Plan

The dismissal directly derails the resolution framework submitted for RCom and RTL. RCom has been undergoing the Corporate Insolvency Resolution Process (CIRP) since June 2019 under court-appointed Resolution Professional Anish Niranjan Nanavaty.

Key details of the pending insolvency resolution include:

• The resolution plans submitted for RCom and RTL fundamentally hinged on monetising and assigning the right to use their spectrum allocations to recover dues.
• Applications seeking final approval of these resolution plans remain sub-judice before the National Company Law Tribunal (NCLT), Mumbai Bench.
• RCom disclosed to exchanges that it is currently examining the full operational and financial implications of the Supreme Court's order on the pending resolution plans.

Implications for Indian Banks and Creditors

The finality of the Supreme Court's decision poses significant ramifications for Indian credit markets, particularly state-run lenders led by the State Bank of India (SBI). Lenders had sought to include spectrum in the liquidation and insolvency pool to recover thousands of crores in outstanding loans.

With airwaves officially excluded from the IBC resolution pool, lenders will face substantially steeper haircuts on telecom exposures. The verdict also strengthens the government's position across other regulatory disputes, ensuring that sovereign dues and natural resources take precedence over financial creditors' recovery claims under the IBC.

Tags: Reliance Communications Insolvency and Bankruptcy Code Supreme Court of India Department of Telecommunications State Bank of India Telecom Sector