Legal Provisions Involved: Section 4 of the Indian Telegraph Act, 1885; Sections 10, 14, 18, 30, 31, 36, 53 and 238 of the Insolvency and Bankruptcy Code, 2016; Article 39(b) of the Constitution of India; TRAI Act, 1997; Spectrum Trading Guidelines, 2015
Judgement by: Supreme Court of India
Judge/Bench: Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar
Facts
Aircel Group entities, holding telecom licences from DoT, defaulted on licence fees and invoked voluntary CIRP under Section 10 of IBC. The Resolution Plan was approved by NCLT and the same was challenged by DoT before NCLAT.
Key legal provisions
Section 4 of the Indian Telegraph Act, 1885; Sections 10, 14, 18, 30, 31, 36, 53 and 238 of the Insolvency and Bankruptcy Code, 2016; Article 39(b) of the Constitution of India; TRAI Act, 1997; Spectrum Trading Guidelines, 2015
Issues raised
- Whether spectrum constitutes an “asset” of TSPs amenable to IBC proceedings?
- Whether IBC overrides telecommunication laws governing spectrum allocation and trading?
- Whether DoT dues can be wiped off through resolution proceedings?
Arguments of the case
Appellant argued that spectrum usage rights constitute intangible assets and IBC overrides inconsistent statutory instruments under Section 238. The Respondent further argued that Spectrum is a natural resource held in public trust and cannot form part of a corporate debtor’s assets under IBC.
Judgement
The Court held that spectrum allocated to TSPs cannot be subjected to IBC proceedings, as it remains a natural resource owned by the nation in public trust.
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