SC reserves judgement of spectrum ownership and insolvency in Aircel and RCom matter

The Aircel and Reliance Communications Limited (RCOM) petitions were pending since four years in Supreme Court were finally heard and judgement reserved on November 13, 2025 by a bench of Justice PS Narasimha and Justice AS Chandurkar.

The Stakes: Financial and Legal Implications

If the Supreme Court Upholds the DoT’s Position:
Spectrum will revert to the Government of India.

The resolution plans approved by the NCLT in both Aircel and RCOM cases will collapse, as they are contingent on spectrum monetization.
The companies will likely proceed to liquidation, with residual assets (largely real estate and equipment) sold on an “as is, where is” basis, yielding negligible recovery.
The expected realization for lenders could fall to negligible or scrap value.
Both companies are likely to face liquidation, eroding the residual value of their assets.
The outcome may necessitate policy clarification or legislative intervention to balance public resource protection with creditor rights under insolvency law.

2. If the Supreme Court Rules in Favor of Lenders led by SBI /CoC

Spectrum usage rights may be treated as a monetizable asset, available for transfer under the IBC subject to regulatory approval.
UVARCL’s resolution plans for both Aircel and RCOM could move towards implementation.
Lenders’ recovery prospects would improve significantly, with potential realizations of RCOM: Rs 7,072 crore
The judgment could set a transformative precedent for future telecom and infrastructure insolvencies, clarifying the treatment of regulated assets under the IBC.
Resolution plans for Aircel and RCOM can proceed, providing modest but meaningful recoveries to lenders.
It will strengthen the IBC’s status as the primary recovery mechanism for distressed assets across sectors.

Key Facts: Reliance Communications

Resolution Plan Approval:

The resolution plan for RCOM was approved by 100% of the Committee of Creditors (CoC).
RCOM Spectrum Value eroded approximately by Rs 4,500 crs in the last 6 years while in adjudication:
Valued at approximately ₹7,500 crore in 2019, as per the approved resolution plan.
The valuation has since eroded to around ₹3,000 crore in 2025, due to the prolonged pendency of proceedings and spectrum deterioration over time.

RCOM Key Asset Portfolio:

DAKC Campus, Navi Mumbai: Spread over 132 acres, comprising extensive office and data infrastructure, along with built-up facilities. MBP, Navi Mumbai: Multiple commercial buildings forming part of the broader DAKC asset cluster.
Reliance Centre, New Delhi: Approximately 3.7 acres of land with built-up office structures in a prime central location.
Chennai Office: A G+7 commercial building on a site measuring approximately 1.3 acres, strategically located with full infrastructure.

The forthcoming Supreme Court judgment will serve as a watershed moment for the insolvency resolution ecosystem, determining whether the right to use spectrum can be considered a transferable economic right under the IBC or remains a non-transferable sovereign property. Either way, the judgment will fundamentally redefine how regulated assets like spectrum, mining rights, and natural resource licenses are treated in insolvency proceedings going forward.

A ruling in favor of the DoT would reaffirm the primacy of sovereign ownership over natural resources, but could also undermine creditor confidence and disincentivize resolution applicants in regulated sectors.

Conversely, a ruling in favor of lenders could reinforce the IBC’s creditor-driven recovery architecture, though it may require coordinated regulatory oversight to prevent the alienation of critical public assets without adequate safeguards.

A deep background related to RCom can be seen from the following attachments:
a. Annexure-A: Sanction Letters
b. Annexure-B: Forensic Audit by BDO
c. Annexure-C: FIR
d. Annexure-D: Stock Exchange Disclosures