RCom RP files curative petition, challenging February SC spectrum ruling

Resolution professional Anish Nanvaty seeks recall of the Supreme Court verdict excluding spectrum from IBC proceedings, arguing that the ruling causes irreversible harm to lenders

Reliance Communications (RCom) has filed a curative petition in the Supreme Court, challenging the apex court’s February 13 judgment that excluded spectrum as an asset under the Insolvency and Bankruptcy Code (IBC).

 

According to two persons aware of the development, the petition, filed by resolution professional (RP) Anish Nanvaty on Friday, has asked for the Supreme Court recalling its earlier verdict because the ruling was causing “irreversible harm”.

 

In February, Justice P S Narasimha and Justice A S Chandurkar that the spectrum allocated to telecom firms and shown as “assets” on their books could not be subject to proceedings under the IBC in the insolvency proceedings of Aircel and RCom. There the lenders had sought to monetise spectrum to recover their dues.

 

 

The verdict was delivered on a batch of petitions filed by State Bank of India and the two insolvent telecom operators challenging a 2021 order of the National Company Law Appellate Tribunal, which had held that spectrum could be transferred or sold under a resolution plan only when all outstanding government dues were cleared.

 

In this case, the RP has argued in the petition that by excluding spectrum banks have been stripped of the asset against which they had lent, and it has now left them with loans without recourse. Importantly, the petition highlighted the issue that the ruling created a sectoral exception that had no basis in the IBC, cautioning that it could be extended to other instances such as mining leases, oil and gas licences, infrastructure concessions, and hydro water rights.

 

The RP is also learnt to have argued that the judgment did not consider the explanation to the IBC’s Section 14(1), which stated that licences could not be terminated during a moratorium if current dues were paid.

 

The RP added that RCom’s current were paid.

 

It further added that the Department of Telecommunications had filed its claim as an operational creditor and the admission of claims of ₹31,276 crore had given it “de facto super-priority”, which was contrary to the Swiss Ribbons ruling of 2019, which had upheld the constitutional validity of the IBC.